Employee retention strategies that help keep your best workers

Most business owners know that losing a good employee is costly—but the full picture is easy to underestimate. Recruiting, interviewing, and getting someone new up to speed takes time, and the team absorbs the pressure while the gap exists. For businesses with lean teams, a single departure can affect multiple functions simultaneously.

The April 2026 Intuit QuickBooks Small Business report found that 47% of respondents plan to expand their workforce over the next 3 months. That kind of growth momentum makes retention even more important.

Adding headcount while losing experienced employees creates an expensive, hard-to-sustain cycle. Building an environment where people want to stay is what makes growth stick.

This article covers what employee retention is, why it matters, 12 strategies for improving it, how to measure it, and how to build a plan around it.

What is employee retention?

Employee retention is a company's ability to keep employees and reduce unwanted turnover. It reflects how well an organization supports its workforce through compensation, culture, management, development opportunities, and day-to-day work environment.

Why keeping great employees is good for business

Turnover carries real costs. Gallup research estimates that replacing a frontline employee costs around 40% of their salary, while replacing a manager or leader can run as high as 200%.

For small and midsize businesses with lean teams, those replacement costs add up quickly. With fewer people to absorb the workload, the effects of a single departure — lost institutional knowledge, disrupted client relationships, pressure on the remaining team — are felt more immediately.

Retaining seasoned employees directly impacts on business performance. The benefits include:

• Lower recruiting and onboarding costs
• Stronger institutional knowledge and team continuity
• Higher employee morale and engagement
• More consistent customer and client relationships
• Less management time spent on hiring and training

12 ways to improve employee retention rates

The following strategies address the factors that most commonly drive turnover and the practical steps businesses can take to mitigate them.

1. Hire for role fit from the start

Retention often starts with setting the right expectations during the hiring process. Accurate job descriptions and honest conversations about the role can help reduce mismatched expectations that can contribute to early turnover.

Look beyond technical qualifications alone. Consider the following factors that can influence job satisfaction and long-term success:

• Communication style
• Problem-solving abilities
• Adaptability

Pro tip: After an offer is accepted but before the first day, send a brief welcome note that outlines what to expect in the first week. Small gestures during that window help reinforce that the hiring decision was a good one and reduce the anxiety that can come with starting somewhere new.

2. Build a consistent onboarding experience

A structured onboarding process helps new employees get up to speed and feel connected to the organization. Consistency is especially important for remote and hybrid teams where informal learning opportunities may be limited.

Strong onboarding programs typically include:

• Defined 30-, 60-, and 90-day goals
• Access to required tools and systems
• Regular manager check-ins
• Role expectations and performance priorities
• Early opportunities for feedback and questions

Many organizations pair new hires with a mentor or onboarding buddy who can help answer questions and provide guidance during the first few months. Sometimes a new employee simply needs someone they can message with a quick question instead of wondering who to ask.

Pro tip: Introduce new employees to key team members early and schedule regular touchpoints during their first few months.

3. Train managers to support retention

Managers influence many aspects of employee satisfaction. Communication, recognition, workload management, development opportunities, and workplace relationships often fall under their responsibility.

Employees are more likely to stay when managers:

• Provide regular feedback and coaching
• Set priorities and expectations
• Recognize contributions
• Address concerns promptly
• Support professional growth
• Help manage workloads effectively

Pro tip: Equip managers with practical training on coaching conversations, conflict resolution, feedback delivery, and employee development.

4. Offer competitive compensation

Compensation remains a major factor in retention. Employees want to know their pay reflects their responsibilities, skills, and market conditions.

Review compensation regularly and compare pay ranges against current market benchmarks.

Consider factors such as:

• Inflation
• Labor market conditions
• In-demand skills
• Internal pay equity

Employees often appreciate transparency around:

• Pay ranges
• Compensation reviews
• Promotion-related increases
• Performance-based raises

Pro tip: Establish consistent compensation review cycles and communicate how pay decisions are made.

5. Strengthen your total rewards package

Employees often consider the entire compensation package when evaluating an employer. A total rewards package can support retention by addressing health, financial well-being, flexibility, and professional growth. According to Intuit QuickBooks Small Business Insights data from April 2026, approximately two-thirds of small business owners (66%) say healthcare benefits are the most effective way to retain skilled workers, making it a practical starting point for any total rewards review.

Areas to consider include:

• Health insurance
• Retirement savings plans
• Paid time off
• Mental health resources
• Flexible work arrangements
• Wellness programs
• Financial wellness support
• Career development opportunities

Pro tip: Periodically gather employee feedback to identify which benefits employees value most.

6. Create clear career paths

Employees are more likely to stay when they understand their growth opportunities and what is required to reach the next step.

Career path planning may include:

• Defined promotion criteria
• Skills-based progression frameworks
• Internal mobility opportunities
• Career planning discussions
• Individual development plans

Pro tip: Include career development conversations as part of regular performance discussions rather than limiting them to annual reviews.

7. Invest in learning and development

Training and development programs help employees build skills while preparing for future responsibilities. They also help organizations develop internal talent pipelines.

Learning opportunities can include:

• Professional certifications
• Leadership development programs
• Technical training
• Cross-functional projects
• Industry conferences
• Online courses

Pro tip: Connect learning programs to potential career paths so employees can see how skill development supports growth opportunities.

8. Prioritize flexibility and work-life balance

Workplace flexibility remains a key benefit for many employees. Flexibility can help employees manage personal responsibilities while maintaining productivity.

Depending on business needs, flexibility may include:

• Remote work options
• Hybrid schedules
• Flexible start and end times
• Compressed workweeks
• No-meeting focus periods
• PTO policies that support employee well-being

Employees should understand when flexibility is available, how requests are handled, and what expectations apply.

Pro tip: Ask managers to discuss workload, availability, and flexibility preferences during regular one-on-ones. Small adjustments can help address challenges before they affect morale.

9. Recognize and appreciate employees often

Recognition helps employees feel valued and connected to their work. Timely, specific recognition is often more effective than generic praise. A quick "great job handling that client issue" often carries more weight than a generic thank-you months later.

Recognition programs may include:

• Manager praise
• Peer-to-peer recognition
• Team shoutouts
• Service anniversary celebrations
• Project milestone recognition
• Spot bonuses

Pro tip: Call out the action, result, or impact when recognizing an employee to make it feel more genuine and memorable.

10. Gather employee feedback and act on it

Collecting feedback is important, but employees also want to see action taken when concerns or opportunities are identified.

Useful feedback channels include:

• Pulse surveys
• Employee engagement surveys
• One-on-one meetings
• Stay interviews
• Exit interviews
• Anonymous feedback tools

After collecting feedback:

• Review recurring themes
• Prioritize issues affecting employees most
• Communicate planned actions
• Share progress updates

Pro tip: Follow up on survey results and employee suggestions so employees understand how their feedback influences decisions.

11. Reduce burnout by improving workload and role clarity

Heavy workloads, unclear priorities, and role confusion can contribute to employee dissatisfaction and turnover. Many workload issues aren't caused by a lack of effort. They're often tied to competing demands and limited time.

Organizations can help reduce burnout by:

• Reviewing workload distribution
• Assessing staffing levels
• Clarifying responsibilities
• Limiting unnecessary meetings
• Setting realistic deadlines
• Aligning priorities with available resources

Pro tip: Conduct periodic workload reviews to identify pressure points before they affect employee morale and retention.

12. Build an inclusive workplace culture

Employees are more likely to stay when they feel respected, included, and treated fairly.

Organizations can support inclusion by focusing on:

• Fair and consistent policies
• Equitable opportunities for advancement
• Psychological safety
• Inclusive leadership practices
• Respectful communication
• Accountability at every level

Pro tip: Include inclusion and belonging questions in employee surveys to better understand how employees experience the workplace.

How to calculate employee retention rate

Tracking retention gives you a baseline to work from. Without a number, it's difficult to know whether the strategies you're implementing are making a difference or where to focus next.

The formula is straightforward:

Employee retention rate = (Number of employees at the end of a period ÷ Number of employees at the start of a period) x 100

For example, if you started the quarter with 60 employees and ended with 57, your retention rate would be 95%. Most businesses calculate this annually, but if turnover has been a recent concern, running the numbers quarterly gives you a faster feedback loop.

While the overall employee retention rate is useful, it is more beneficial to examine segmented data. A 90% retention rate looks different if the turnover is concentrated entirely in one department or among employees in their first year. Useful metrics to track alongside the overall rate include:

• Retention by department
• Retention by manager
• New hire retention
• Voluntary turnover
• Involuntary turnover
• Employee satisfaction scores
• Exit interview themes

Looking at these metrics together can help you identify what's contributing to turnover.

How to build an employee retention program

A retention program turns strategy into a structured, measurable plan. Having a proactive framework for identifying risks and addressing them is more effective than responding to turnover after the fact. Here is how to build one.

1. Measure your current retention and turnover

Start by calculating your retention rate using the formula above. If you have not tracked this before, now is a good time to establish a baseline. Pull data for multiple time periods and segments where possible, for example:

• Overall retention rate for the past 12 months
• Retention broken down by department or team
• New hire retention within the first 90 days
• Year-over-year comparisons if the data is available

2. Identify why employees are leaving

Employees leave for a reason. Understanding those reasons requires gathering and assessing feedback.

Useful sources of feedback include:

• Exit interviews: Help explain why employees chose to leave.
• Stay interviews: Help identify what's working well and where employees may need additional support.
• Engagement surveys: Provide insight into the broader employee experience.
• Manager feedback: Can highlight team-specific concerns and recurring challenges.
• Pulse surveys: Offer a quick way to monitor employee sentiment throughout the year.
• Anonymous feedback tools: Give employees another channel to share concerns and suggestions.

Collect feedback regularly so you can identify concerns early and adjust your retention efforts as needed.

3. Segment retention risks

An overall retention rate provides a useful snapshot, but it doesn't always reveal what's happening within specific teams or employee groups.

Reviewing retention data by segment can give you insights into where turnover is occurring. Consider looking at:

• Role and department
• Tenure (new hires versus longer-tenured employees)
• Manager
• Location or work arrangement

4. Prioritize the highest-impact issues

Focus first on issues that affect the most employees or the most critical roles. Starting with the highest-concentration issues gives early efforts the best chance of producing measurable results.

A few questions that can help guide prioritization:

• Where is turnover highest — and is that area difficult or expensive to hire for?
• Are the issues identified concentrated in one area or spread broadly?
• Which problems, if addressed, would affect the largest number of employees?

5. Create a retention action plan

Once priorities are identified, define the next steps, assign responsibilities, and establish timelines. Action plans are easier to execute when responsibilities and timelines are clearly outlined.

For each initiative, define:

• The owner responsible for execution
• A realistic timeline
• The budget required, if any
• How success will be measured — reduced turnover rate, improved engagement scores, faster time-to-productivity for new hires, or another relevant metric

6. Review progress regularly

Revisit retention data quarterly or semiannually to identify emerging trends and changing employee needs. The factors influencing turnover can evolve, so it's helpful to review metrics regularly and adjust your retention efforts accordingly.

At each review:

• Recalculate retention rate and compare to the prior period
• Check whether initiatives from the action plan are on track
• Review any new feedback from surveys or stay interviews
• Adjust priorities based on what the data shows

How QuickBooks can help support employee retention

The day-to-day employee experience is influenced by many factors, from payroll accuracy to benefits management. These operational details can affect employee satisfaction and help shape how employees view their workplace.

QuickBooks Workforce supports your team management and retention efforts. It brings payroll, HR, benefits administration, onboarding, and time tracking together in one platform. This can help small and midsize businesses spend less time managing disconnected systems and more time focused on their employees.

Accurate payroll helps build trust

Employees expect to be paid correctly and on time. Payroll mistakes can create frustration and increase administrative work for both employees and employers.

QuickBooks Payroll can automate payroll tax calculations, direct deposit, and payroll tax filings, helping businesses streamline payroll processes and reduce manual work.

Benefits can support attraction and retention efforts

Benefits often play an important role in an employee's decision to join or remain with an organization. Health coverage, retirement savings options, and other benefits can contribute to overall job satisfaction.

QuickBooks Workforce provides access to benefits solutions, including health insurance options and 401(k) plans, through integrated partners. Employers can manage benefits-related processes alongside payroll and workforce management activities within the same platform.

Time tracking helps support accuracy and transparency

Accurate time records help employees and managers stay aligned on hours worked, paid time off, and payroll information.

QuickBooks Time and QuickBooks Workforce provide time-tracking tools that help businesses manage employee hours and connect time data with payroll processes.

Workforce management tools can simplify administrative tasks

Managing onboarding, employee records, HR workflows, benefits administration, and payroll through separate systems often creates additional work.

QuickBooks Workforce helps businesses manage these tasks from a central location, reducing administrative work and helping teams stay organized.

Making retention easier to execute

The strategies in this article address the human side of retention — hiring, development, recognition, culture, and feedback. QuickBooks supports the operational side.

It helps businesses run payroll accurately, offer competitive benefits, track time fairly, and manage HR tasks without the administrative drag of disconnected tools. Together, these tools and strategies can help businesses create a better experience for employees and support long-term retention.