Employee retention strategies: How to keep your top talent

Experienced employees move on despite no obvious dissatisfaction. Newer hires leave before completing their probationary period. Capable team members who seemed settled start exploring other options after a reorganisation or a missed promotion conversation. In many cases, the reasons behind these departures may have been identifiable - and addressable - well before a resignation letter appeared.

Employee turnover is a persistent challenge for UK businesses. The average turnover rate for UK workers sits at around 34%, with more than one in four employees moving to a different employer each year [1]. Analysis from Culture Amp suggests that one in four UK workers planned to leave their job in 2025 [2]. And each departure carries a cost that many businesses underestimate.

Research by Oxford Economics and Unum found that replacing an employee earning £25,000 or more costs an average of £30,614 - with the majority of that figure (£25,181) attributed not to recruitment fees, but to lost productivity while a new hire gets up to speed [3]. That ramp-up period averages 28 weeks. For a small business replacing three people in a year, that's close to £92,000 in turnover costs alone.

The financial case for improving retention is straightforward. Yet many employers only address retention after an employee resigns, rather than proactively investing in their team to prevent them from leaving in the first place.

Summary

• UK employee turnover averages 34%, costing businesses an estimated £30,614 per departing employee [1][3].
• 41% of new hires leave within the first 12 weeks, making onboarding quality a frontline retention issue [4].
• Leadership has a significant impact on retention: with strong leaders and managers, employee commitment to stay reaches 94%; with poor leadership, it drops to 19% [2].
• Competitive pay matters, but flexibility, development, recognition, and management quality often determine whether employees are more likely to stay in their current roles.
• Effective onboarding alone can improve retention by up to 82% [5].
• Retention strategies don't require large budgets - they require deliberate systems, honest conversations, and consistent follow-through.

Why employees leave

Pay is the most commonly cited factor: in a 2024 survey, 59% of workers named low pay as their primary reason for seeking a new employer [6]. But compensation alone rarely tells the full story. Employees who feel fairly paid still leave when they see no progression, receive inconsistent feedback, or work under managers who don't communicate well.

Culture Amp's analysis of over 10 million UK employees found that leadership quality, not just direct line management, is one of the strongest predictors of whether someone stays [2]. When both leadership and management are strong, commitment to stay reaches 94%. A good manager paired with poor leadership sees that figure fall to 35%. Poor leadership combined with poor management reduces it to just 19%.

This challenges the common assumption that "people leave managers, not companies." The data suggests they may leave both - and that leadership sets the broader context within which even capable line managers operate.

Other consistently reported drivers of turnover include limited career development, poor work-life balance, lack of recognition, and feeling undervalued. The weighting varies by generation: research suggests millennials tend to prioritise work-life balance, while Gen Z employees place greater emphasis on career growth and job security [7].

Start with onboarding

The first 12 weeks of employment represent a disproportionately high-risk period. According to the CIPD's 2024 Resourcing and Talent Planning Report, 41% of organisations that hired in the past year experienced new recruits quitting within the first 12 weeks [4]. A further 27% reported candidates failing to show up on their first day.

In many cases, these early departures point less to recruitment problems and more to what happens once someone starts. The gap between what a candidate expected and what they experience in those early weeks determines whether they commit or reconsider.

Effective onboarding doesn't require elaborate programmes. It requires structure: a clear first week, a named point of contact, early objectives that build confidence, and regular check-ins that taper as the employee settles. Research suggests that well-executed onboarding can improve retention by 82% and productivity by over 70% [5] - making it one of the highest-return investments an employer can make.

Pay fairly - and be transparent about it

Competitive pay remains a baseline requirement. An employee who believes they're underpaid is more likely to test the market over time, regardless of how much they enjoy the work or the team. With the average UK salary at £37,400 in 2024, even modest misalignment can push someone to explore alternatives, particularly when job sites make comparison effortless.

Fair pay means benchmarking roles regularly against market data, adjusting when responsibilities increase, and being open about where salaries sit relative to the sector. A lack of transparency around pay can erode trust, even when the numbers themselves are reasonable.

Beyond base salary, consider total reward. Pension contributions, health benefits, flexible working arrangements, and learning budgets all carry value. HR DataHub's 2024 Pay Planning Survey found that more than 70% of UK companies have provided health benefits for over two years, with gym memberships increasingly common [6]. These benefits don't replace fair pay, but they contribute to a broader sense of being valued.

Invest in development

A 2023 report by Deloitte found that 93% of companies are concerned about retention and identified learning opportunities as the primary mechanism for keeping people [8]. After two years, 75% of employees who had made an internal move remained with the company, compared with just 56% of those who hadn't.

The connection is intuitive. Employees whose skills are developing tend to feel more engaged and invested in their roles. Those who see limited opportunity for growth are more likely to explore what's available elsewhere. The UK Learning and Work Institute reports that 70% of employees believe their employers should offer better learning and development opportunities [9]. That expectation isn't limited to junior staff; it applies at every career stage.

Employee development doesn't require a dedicated training department or a large budget. It includes mentoring, stretch assignments, cross-functional project work, conference attendance, and access to online learning platforms. What matters is that the organisation signals investment in the individual's future - not just their current output. When companies adopt skills-based approaches to development, research from Deloitte suggests they're 98% more likely to retain high performers [8].

Build flexibility into working patterns

The demand for flexible and hybrid working is no longer a post-pandemic novelty - it's a structural expectation. According to the CIPD's 2024 report, most organisations that offer hybrid or remote options report improvements in productivity, engagement, and retention [4]. Seven in ten employers say flexible working has helped them retain talent they would otherwise have lost [10].

For roles where location flexibility is possible, offering it signals trust. Removing it without a clear operational rationale may prompt experienced staff to consider employers who take a different approach.

Where remote or hybrid work isn't feasible - in retail, manufacturing, healthcare, or hospitality - flexibility still matters. Shift-swapping systems, compressed hours, predictable scheduling, and genuine autonomy over break times all contribute to the same outcome: employees who feel their circumstances are respected.

Recognise contribution consistently

Recognition is one of the most cost-effective retention tools available, yet it remains underused. Research indicates that 78% of employees would be more productive if recognised more frequently, and 83.6% say recognition directly affects their motivation [11]. Despite this, just over half of employees surveyed reported having any formal recognition programme at their workplace.

Recognition doesn't need to be elaborate or expensive. A specific, timely acknowledgement of good work, whether delivered publicly or privately, often carries more weight than an annual award ceremony. What matters is consistency and sincerity. When effort goes unrecognised over time, employees are likely to draw their own conclusions about how their contribution is valued.

Managers play a central role here. Where feedback only surfaces when something goes wrong, employees may come to associate check-ins with criticism rather than support. Building recognition into regular one-to-ones, team meetings, and project reviews takes minimal effort but can materially affect how people experience their work.

Listen before people leave

Retention problems rarely appear without warning. Employees who feel undervalued, overlooked, or stuck tend to show signs well before they start job searching. The challenge, especially for smaller businesses, is creating opportunities to surface those concerns early, when something can still be done.

Anonymous surveys can help. A short, periodic questionnaire - quarterly or twice a year - gives employees a way to share feedback they might not raise in person. The questions don't need to be elaborate.

• Do you feel supported in your role?
• Is there anything that would make your day-to-day easier?
• Do you see a future for yourself here?

Even in small teams where anonymity is harder to guarantee, framing the survey as genuinely confidential can encourage more honest responses. Including questions about wellbeing and workload can also flag early signs of burnout or stress before they lead to absence or resignation.

Regular check-ins offer another way to stay connected. A short conversation every few months, separate from performance reviews, gives employees space to share what's working and what isn't. Stay interviews take this further: structured conversations with employees the business most wants to retain, focused on what keeps them engaged and what might eventually prompt them to leave.

What matters most is acting on what you hear: visible follow-through builds trust. Even when the answer is "we can't do that right now," explaining why demonstrates that the conversation was taken seriously.

What effective retention actually looks like

Employee retention isn't a perk or a programme - it's the cumulative result of how an organisation treats people day to day. Fair pay, meaningful development, competent management, flexible working, and consistent recognition aren't individual initiatives. They're the operating conditions that make people want to stay.

The businesses that retain talent most effectively tend to share a common trait: they ask employees what they need before those employees start looking elsewhere for it. When that conversation is honest, regular, and followed by action, it requires very little investment but can prevent losses that run into tens of thousands per person.

For most organisations, improving retention doesn’t require expensive or complicated changes, but it does require consistency.

This article is intended for informational purposes only and does not constitute legal advice. The information is accurate at the time of writing but may be subject to change. For advice specific to your situation, please consult a qualified professional.

[1] CIPD, Benchmarking Employee Turnover, 2024.
[2] Culture Amp, UK Attrition Rates, as reported in Personnel Today, December 2024.
[3] Oxford Economics and Unum, The Cost of Brain Drain, 2014.
[4] CIPD and Omni RMS, Resourcing and Talent Planning Report, September 2024.
[5] People Insight, Employee Onboarding Checklist, 2025.
[6] HR DataHub, 2024 Pay Planning Survey and Employee Retention Strategies.
[7] Human Resource Journal, Strategies for Employee Retention in High Turnover Sectors, 2024.
[8] People Management, Why L&D is critical to driving employee retention in 2024, January 2024.
[9] UK Learning and Work Institute, The workforce learning slowdown?, 2025.
[10] CIPD, written evidence to Parliament on hybrid and remote working, 2024. [11] DPG, 7 Tips for Managing Employee Retention in 2024, citing recognition research.