Your Guide to Retaining Employees and Reducing Turnover in 2025

How do you retain employees in 2025? Remember, employee retention efforts include all of an organization’s policies and practices designed to encourage employees to remain with the company. The problem is that keeping employees happy is a moving target that’s hard to define from one day to the next—and can change significantly over a year.

Many organizations have defaulted to a deep catalog of niche offerings, designed to provide employees with resources for spouses, children, pets, homes, paid time off, mental wellness, financial challenges, social health, retirement, education expenses, etc. However research from the 2025 Global Culture Report by the O.C. Tanner Institute finds this strategy for Total Rewards and benefit offerings misses the mark, overwhelming employees rather than communicating true care. Instead, to attract and retain employees, companies should focus on meeting employees’ basic needs and helping them survive and thrive at work.

In this article, we’ll discuss some of the key things employees really want from their organizations to survive and thrive. By directly meeting these needs and improving the employee experience across an organization, leaders can fine-tune their efforts to create workplace cultures where employees want to stay, and reduce employee turnover.

What is the impact of high turnover on companies?

Although a certain amount of turnover is a reality for all organizations, an unnecessarily high turnover rate can cost organizations in several ways.

The most immediate impact of turnover is that human resources teams must spend additional time and money on the hiring process to replace those employees walking out the door. Even more critical, high numbers of employees leaving can negatively impact employee morale and productivity—as well as damaging the organization’s reputation with both customers and potential employees.

Ultimately, high turnover hurts business performance. In a discussion with McKinsey & Company, Zynep Ton discusses ideas from her book, The Case for Good Jobs: How Great Companies Bring Dignity, Pay, and Meaning to Everyone’s Work. She notes how companies that choose to operate with higher turnover rates can experience operational problems, customer service issues, lower productivity, and reduced sales. In short, they may pay less to acquire their employees, but they sacrifice the greater performance and long-term value that comes with investing in more experienced workers.

The alternative, Ton points out, is to see people as drivers of value, profit, and customer service—not just a cost to be minimized. Companies who choose this approach may spend more for talent, but in turn will generate more valuable work—which ultimately more than pays for the added investment.

What factors impact employee retention?

You’ll find many well-documented reasons employees choose to leave. Some of the root causes include poor management, lack of job advancement, and a deteriorating work-life balance. Conversely, the factors that influence employees to stay include feelings of belonging, greater connection, and autonomy. These traits can help build a positive workforce culture and reduce turnover.

More than pay and benefits, employee retention strategies should include modern leadership, development opportunities, mental health support, and giving employees a say on how and where they work. Even physical factors, like the work environment and technologies a company chooses can affect whether employees will want to stay long term.

Curious how Total Rewards offerings impact retention? See what the latest research says in our 2025 Global Culture Report.

7 people strategies for improving company culture and reducing turnover

In the face of a complicated HR landscape, companies are looking to create workplaces where all employees can thrive. This requires taking the pulse of employee experiences and fine tuning culture initiatives as needed.

For a deeper dive into this data, watch our on-demand webinar, 5 Culture Trends for 2025.

Following are specific findings from our research and the people strategies organizations can focus on to help create and sustain cultures where people want to work.

1. Help employees meet their survive and thrive needs

Employees evaluate their relationship with their employer by asking 2 questions: Am I surviving? Am I thriving?

The research finds 1/3 of employees are merely surviving at work. Those who are merely surviving feel anxious, financially uncertain, doubtful of growth opportunities, and pessimistic about the future. But employees who are thriving feel their organization cares about their mental health, they work in organizations with strong cultures and purpose, and they have opportunities for growth and advancement. They have hope.

Companies can help employees who are surviving by offering competitive compensation and health benefits to help provide financial stability and meet survival needs. Then, once employees’ basic needs are met, career development, skill building, and recognition help them thrive.

When employees feel they are thriving at work, the odds of important business outcomes like retention soar:

• Retention (6x)
• Promoting the organization to others (7x)
• Great work (8x)
• Overall satisfaction with employee experience (14x)

2. Show practical empathy

The 2024 Global Culture Report uncovered a handful of ways to make empathy more potent, less painful, and in a single word, practical. We found that not only does Practical Empathy increase employees’ sense of belonging and connection, it improves business outcomes like attracting and retaining talent.

Empathy goes a long way in motivating employees to stay loyal. In fact, employees picture themselves staying 2.5 years longer at their organization when their leader is empathetic. 

But practical empathy includes more than understanding, it also involves setting boundaries and defining responsibilities for both the leader and the employee. One-to-one meetings are ideal to facilitate conversations about expressing empathy, and establishing responsibilities.

When employees feel both their leader and the overall organization are empathetic, they:

• Feel more seen and valued (+64%)
• Feel more fulfilled at work (+40%)
• Are more satisfied with workplace culture (+40%)
• Want to stay longer (+3 years)

3. Help all of your employees feel seen

A large majority of the world’s workers, what we call the 80%, feel overlooked and underappreciated. These employees are the offline, frontline, and other workers who find themselves in work environments detached from mainstream corporate culture. About half of these people feel their organization treats them as expendable. They also lack connection and a sense of community, which can lead to feeling unfulfilled in their work.

It’s no surprise that companies find it increasingly difficult to retain employees in this group. Many employees leave for jobs where they feel more valued. Forbes reports turnover rates up to 500% per year. But just as harmful, the employees who do stay due to financial constraints or lack of training or opportunity feel more demoralized, resigned, and unfulfilled in their work.

Get more strategies for supporting your offline, deskless, and frontline workers in this on-demand webinar featuring O.C. Tanner Institute researchers. 

4. Create an environment that’s flexible, but fair

Although the employee experience has never been more flexible, the next step is making it fair. Companies that offer more flexibility get loyalty and better work outcomes in return. But to create a long-term work culture where people want to stay and thrive, that flexibility must remain equitable. 

Research on Equitable Flexibility revealed workplace flexibility that appears unfair can be damaging to key cultural outcomes, leading to burnout and reduced job satisfaction. The bottom line? Giving employees flexibility in when, where, and how they work will help them feel engaged and want to stay with their organization.

When they experience equitable flexibility, employees are:

• 385% more likely to be satisfied with their job
• 466% more likely to be satisfied with the employee experience
• 679% more likely to want to stay one more year

5. Promote skill building and development

As we saw in recommendation #1, development is crucial in helping employees thrive at work and reduce employee turnover. Odds of retention increase 5x when companies offer skill building opportunities at work, and 6x when there are tangible career development plans in place. Studies on Cooperative Skill Building show organizations that don’t provide any type of skill building have 72% lower odds of employees saying they still want to work there in a year.

Opportunities to develop more skills lead to greater employee fulfillment—which is a good predictor of employee retention. When leaders support employee skill building, the odds of fulfillment are 4x better, and employees are 4x more likely to want to work at their organization for another year.

6. Support employees through job changes and transitions

When employees are changing jobs or starting a new role, especially in the same company, it’s important to support them through the job transition so they are more likely to stay.

This means building 4 important elements into every job change or transition: connection, community, development, and flexibility.

When employees have an above-average job transition experience, there are 251% increased odds the employee will stay with the organization 2 or more years (compared to 44% lower odds of staying when the job transition experience is below average). And if an employee’s job transition experience was so positive it was “life changing”, odds of staying with the organization improve 8x.

This is particularly important for newly promoted leaders. Being promoted doesn’t always mean new leaders have the soft skills or leadership qualities to succeed, and ADP finds 29% of new leaders leave within a month of receiving their promotions due to lack of support and training from the company. But when leaders have a positive job transition experience that includes connection and integrated recognition, odds they want to stay with the organization increase 5x.

7. Leverage your employee recognition program

Not surprisingly, a common element of cultures that feel supportive and genuine is an effective employee recognition program. And the fact that regular recognition can help retain employees longer is not lost on HR leaders.

Consider this striking statistic: When leaders do not effectively communicate accomplishments, employees are 74% less likely to stay at their organization.

Read our Employee Recognition Guide to learn more about what it takes to build and launch a successful program.

What are successful companies doing to retain top talent?

Organizations can invest in various strategies to build workplace cultures where employees thrive and want to stay. In the article 12 companies workers don't want to leave, companies with high retention rates ranked high in five specific categories: company resilience, career growth, positive environment, business stability, and strong leadership.

DuPont, earning the top spot for the best employee retention, ranked highest in company resilience. Other organizations with low turnover rates stood out for having the best positive working environments—including Intel and American Express.

The article also noted that the companies who invest in talented people have done very well at keeping employees longer. For example, giants like Amazon and Cisco have succeeded in both attracting new hires as well as nurturing and developing existing talent over the years.

As noted earlier, companies that recognize their employees are better at retaining them.For example, ICF, a global advisory and technology services provider, found:

• Receiving recognition accurately predicted whether an employee voluntarily stayed with or left the company 91% of the time
• Receiving recognition from leaders increased the likelihood an employee would stay at the company by 3-8x (depending on the level of leader)
• Being recognized for “Living in line with ICF values” almost doubled the likelihood an employee would stay with the company

Receiving recognition accurately predicted whether an employee stayed with or left the company 91% of the time
—O.C. Tanner Institute

Create a culture where employees want to stay

As you develop strategies to reduce employee turnover, remember that the most powerful magnet for keeping your employees fulfilled and happy is a culture where employees feel they belong and can do their best work. Focus on efforts to refine your workplace culture and employee retention will follow.

To learn more about the workplace culture topics discussed in this article, read our in-depth findings in the 2025 Global Culture Report.

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Read more about how the Culture Cloud recognition platform can help your people thrive and want to stay with your organization longer. Or request a demo today.