Your 2026 Guide to Employee Retention

Key takeaways

High employee retention rates can help your company be more competitive, boost employee and customer loyalty, improve employee morale, and more.

• According to data from the Work Institute, about 35 billion workers quit their jobs in 2025, and 75 percent of departures were preventable [1]. 

• To calculate your employee retention rate, subtract the number of employees who left during the year from the number of employees you started the year with, and divide that number by the employees you started the year with. 

• You can improve employee retention by offering comprehensive benefits, a competitive salary, paid leave, and employee appreciation. 

Explore the importance of employee retention, the reasons employees leave their jobs, the benefits of retaining your employees, and strategies to keep them. Then, consider empowering your employees by giving them access to content from 350+ top companies and universities with Coursera for Business.

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What is employee retention?

Employee retention is a company’s ability to keep its employees. Sometimes employees leave for reasons beyond your control, such as relocating, but you can typically influence other factors, such as work-life balance. Usually, companies strive to maintain a high employee retention rate, especially among their top talent, as it offers many benefits.

How to calculate employee retention rate

You can calculate your company's retention rate, or the percentage of your employees who stay with your company, throughout the year, by using this formula:

# of employees at the beginning of the year - # of employees who left during the year = number of remaining employees / # of employees at the beginning of the year = your employee retention rate for the year

Reasons employees leave their jobs

In 2025, approximately 35 billion workers in the United States quit their jobs, according to the Work Institute [1]. Its analysis of 120,000 exit interviews also revealed that 75 percent of departures could have been prevented [1]. Employees opt to move on from their current roles for many reasons, including common ones like: 

• Job offers too little pay or benefits

• Lack of opportunity for advancement or career development in the job

• Lack of flexibility in the workplace

• Poor leadership

• Employee desires a better workplace culture

• Employee wants a better work-life balance

• Employee is relocating

• Employee is retiring

• Personal or family issues

• Internal or external advancement to a higher position

Read more: Top Strategies to Build Employee Engagement

Why is employee retention important? 

Minimizing turnover and keeping your existing employees can help your company in many ways. Benefits you might gain from engaging in employee retention strategies include:

• Reduced costs: It takes time and money to hire and train employees. Experts indicate that the total costs may be closer to three to four times the employee’s annual salary, including lost productivity and the time leadership spends supporting the hiring and training process. Retaining employees can help cut these costs and save your company valuable time.

• More skilled and experienced employees: The longer you retain employees, the more skilled and experienced they become. Good skills and experience usually translate to higher productivity for your company, allowing you to promote employees from within rather than looking elsewhere.

• Better company culture: When employees have an opportunity to get to know each other, they often have better work relationships and greater collaboration. These benefits result in a more positive workplace and happier employees.

• Greater loyalty from employees: When you engage in strategies to retain employees, it often creates a greater sense of loyalty. In addition, when employees feel loyal to employers, they're less likely to leave, increase their productivity, and stand by the company.

• Happier clients or customers: Sometimes, customers or clients develop relationships with certain employees and depend on doing business with them. These relationships can help ensure continued sales or repeat business.

• Improved reputation: Companies that retain employees long-term tend to have a better reputation within the industry and with customers, clients, and prospective employees. A good reputation can also help build brand awareness and increase profits.

• A competitive edge: When you can attract and keep top talent, it gives you an edge over competitors and boosts your company's bottom line.

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How to improve employee retention: 7 strategies  

Incorporating some employee retention strategies may help you retain your current employees while also attracting new employees when needed. Consider some of these strategies:

1. Provide a competitive wage or salary.

When you want to minimize turnover and maximize employee retention, pay matters. Providing a competitive wage can help your employees feel valued.

2. Model and encourage a healthy work-life balance.

Employees appreciate employers who model and encourage a healthy work-life balance. Employee support programs, such as mental health services, childcare, and gym memberships, might help promote better work-life balance for employees and boost their sense of value at work.

3. Offer employees paid sick and vacation leave.

Employees need time off when they're sick to prevent financial worries, and also appreciate paid vacation time. So, paid leave might help reduce stress and promote a better work-life balance.

4. Give employees opportunities to learn, grow, and advance at your company.

If you create opportunities for your employees to learn, grow, and advance within your company, you may be more likely to retain them.

5. Give employees regular feedback and ask them to provide regular feedback.

Employees feel more valued and tend to stay at companies that provide regular feedback on their work performance. On the other hand, employees also tend to stay at companies that allow them to give feedback to leadership.

6. Offer flexible work options.

Employees who have flexible work options may stay with you longer. If possible, allow employees to work from home part of the time or have shared work schedules or a four-day workweek. Employees with pets may also appreciate pet-friendly workplaces.

7. Thank, recognize, and reward employees.

Sometimes, you can boost employee retention by merely thanking employees when they go above and beyond their job description. Recognition and rewards also go a long way to keeping people in your employ. Good ways to recognize and reward employees include:

• Offering public praise to an employee at a staff meeting

• Setting up an after-work mocktail hour or wine-tasting for your team

• Expressing your appreciation to an employee through a handwritten note or email 

• Giving your employee a framed award

• Recognizing your employee with a gift of concert or theater tickets

• Awarding your team with a unique adventure, breakfast, or an afternoon off

Upskill your team as part of your employee retention strategy

With Coursera for Business, your employees will gain access to content from 350+ leading universities and industry partners, where they can build real-world experience with innovative skills, tools, and technologies while earning globally recognized credentials. Our customizable, scalable learning solutions balance workplace and technical skills training in diverse formats, from video clips to Guided Projects and Professional Certificates.

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