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Employee retention strategies help keep staff engaged and show they are valued. Examples include fair pay, good benefits, flexible work, career growth, and regular recognition.
The idea of working for one company for life is rare today. Still, investing in employees long-term pays off. It helps staff feel secure, boosts morale, and saves the business money on hiring and training.
This guide covers key retention strategies, why they matter, and how to use them in your organisation.
Table of contents
A strong company culture makes people feel part of something bigger. Culture is more than perks. It’s about values, fairness, and a sense of progress.
Here are five ways to build a culture that supports retention:
Every company, big or small, should define its purpose.
Clear values guide decisions and give staff a reason to stay.
Go beyond accessibility. Make sure every employee feels safe, respected, and valued for their ideas. A culture of belonging keeps diverse talent engaged.
Keep staff updated on decisions, performance, and goals. Honest communication builds trust and reduces uncertainty.
Use surveys, one-on-ones, or exit interviews to hear staff views. Then follow up with action plans. Employees are more loyal when they see their feedback makes a difference.
Recognise birthdays, work anniversaries, or major project completions. Public recognition shows appreciation and boosts team morale. Leaders should track business performance and give credit to employees who are making significant contributions.
Employees don’t work only for the reward of a job well done.
They expect fair, on-time pay, plus benefits that support their well-being.
Whether you’re a small business paying by cheque or a large enterprise with automated payroll, employees want the same thing: reliable and fair compensation.
While pay isn't the only factor, low or unfair pay is one of the main reasons UK employees look elsewhere. Benchmark salaries against the market and use bonuses to reward performance.
Competitive pay attracts talent, while bonuses show staff their work is valued; both reduce turnover and protect your investment in people.
Pay is only one part of compensation. Employees also want healthcare that covers more than the basics. This may include dental, eye care, and extra support like counselling, massage, or acupuncture.
Offering wider benefits shows staff that you care about their health inside and outside the workplace.
Beyond healthcare, support mental health through simple policies. Examples: flexible breaks, mental health days, or time off for therapy.
Showing staff that their well-being is a priority builds trust and loyalty.
The UK has minimum pension requirements of usually 8% total for any qualifying employee, with 3% coming from the company and 5% from the employee.1
Go further by offering pension matching. For example, if an employee contributes 5%, your company could match that amount. This makes a long-term difference to employees and encourages them to stay.
Help employees build financial confidence. Run short workshops on budgeting, saving, or pensions. You can also provide digital tools for tracking expenses or planning retirement.
This support improves financial security and shows your organisation cares about employees’ futures, not just today’s work.
Flexibility is no longer just a perk; it's an expectation. It shows that your company prioritises a healthy work-life balance.
When employees can balance personal and professional needs, they’re less likely to burn out and more likely to stay.
Not every role can be flexible; healthcare and hospitality often need set hours. But most companies can still give employees more choice, such as:
Most standard, full-time employees in the UK can take 5.6 weeks of paid time off per year, which is equal to 28 days.2 Some employers go further, offering up to 36 days, excluding bank holidays. More leave signals that rest and recovery are valued.
Work-life balance should work for employees at every stage of life. That means support for responsibilities outside of work, as needed, such as caregiving or parental responsibilities.
Follow UK parental leave rules, but consider offering extended leave or top-ups to show genuine support for families.
Reduce meeting overload by setting one “no-meeting day” a week. Exceptions can be made for client calls or urgent issues.
Some companies also introduce “recharge weeks,” encouraging everyone to take time off at the same time. This helps prevent burnout and keeps productivity high.
Workload balance is key to retention. Use organisation tools like online calendars or collaboration boards to make tasks clear and help employees manage their time.
Businesses should also simplify their financial workflows. PayPal can help by offering invoicing, recurring billing, and real-time accounting integrations, such as QuickBooks. Less admin means staff spend more time on meaningful work.
Employees stay longer when they see opportunities to grow. Offering clear career paths, training, and mentorship boosts loyalty and builds a more capable team.
Strategy | Accessibility | Scalability | Retention Impact |
|---|---|---|---|
Clear career paths | ⭐⭐⭐⭐ | ⭐⭐⭐ | ⭐⭐⭐⭐ |
Upskilling and training programs | ⭐⭐⭐⭐ | ⭐⭐⭐⭐ | ⭐⭐⭐⭐ |
Sponsored conferences | ⭐⭐ | ⭐⭐ | ⭐⭐⭐ |
Internal mobility opportunities | ⭐⭐⭐ | ⭐⭐⭐ | ⭐⭐⭐⭐ |
Mentorship/coaching programs | ⭐⭐⭐ | ⭐⭐ | ⭐⭐⭐⭐ |
Show employees a roadmap for their growth. Transparent paths reduce uncertainty and signal that development matters.
Employees are more likely to stay when they see a future in the company rather than looking elsewhere.
Training improves skills and shows commitment to employee growth.
This approach fills talent gaps internally and reduces turnover.
Paying for employees to attend events or conferences helps them learn, network, and stay current in their field. It also shows that you value their expertise and career development.
Allow employees to move into new roles or departments. Make internal job postings transparent and provide clear transfer processes.
Internal mobility keeps talent in-house and reduces hiring costs while boosting morale.
Pair employees with experienced mentors or external coaches.
Mentorship guides employees through challenges, supports career growth, and builds a sense of belonging.
Giving employees meaningful work and the freedom to make decisions increases motivation and ownership. When staff feel empowered, they feel more invested in the company's success.
Let employees recognise each other’s contributions. Peer-to-peer recognition creates a culture of daily appreciation, rather than relying only on top-down praise.
This keeps morale high and reinforces company values.
Give team members ownership of projects. For example, allow a tech-savvy employee to lead a project for transitioning to an online payment system.
This builds leadership skills and gives a sense of purpose while improving business processes.
Celebrate achievements in emails, team chats, or all-hands meetings.
Public recognition motivates employees and encourages others to excel. It also strengthens connection and loyalty within the team.
Offer bonuses or incentives for employees who refer qualified candidates.
Referrals usually bring in higher-quality candidates and increase engagement for the referrer, creating a positive cycle of trust and retention.
Allow employees time to work on projects they are passionate about. Examples: writing for the company blog or exploring a new product idea.
Supporting curiosity and creativity boosts morale, engagement, and can lead to new business opportunities.
The first 90 days are crucial for new hires. A well-structured onboarding process shows that employees are valued and sets them up for long-term success.
Good onboarding provides tools, clear expectations, and a sense of belonging from day one.
Onboarding is more than paperwork. Provide a structured plan that covers:
A thoughtful process helps new hires feel confident and invested in the company.
Pair new employees with a mentor or “buddy.” This helps them settle in, understand the company culture, and feel supported.
Regular check-ins during the first weeks show that you care about their success, increasing the chances they will stay long-term.
When thinking about retention, employees leave due to “push factors”— problems that push them away—while “pull factors” are reasons they stay, like good pay and recognition.
Common reasons employees leave include:
Focusing on effective retention strategies helps reduce these push factors and keeps employees engaged.
Keeping employees long-term benefits both the staff and the business. It strengthens company culture and improves your bottom line.
Here’s why employee retention matters:
Investing in retention keeps your team skilled, motivated, and loyal.
Employee retention rate shows how many staff stay over a period of time. Employee retention rate shows how many staff stay over a period of time. A good retention rate is usually around 90%, but this varies by industry. Seasonal, contract, or part-time roles often have higher turnover.
To calculate it:
Employee retention rate = [ (Number of employees at end of period – Number of new employees during period) _________________ x 100 Number of employees at start of period ] |
A tech company had 97 employees at the start of 3 months. They hired 6 new employees, and 89 remained at the end.
An 85.6% retention rate shows room for improvement. Consider factors like interns leaving, temporary contracts ending, or project closures that may have influenced the rate.
Employee retention rate = [ (89 – 6) _________________ x 100 97 ] Employee retention rate = (83 / 97) x 100 Employee retention rate = 85.6% |
Strong employee retention strategies come from investing in people, not just processes. Focusing on culture, flexibility, and growth helps build a loyal team committed to your company’s success.
A loyal workforce improves productivity, reduces turnover costs, and strengthens your brand.
Modern businesses can support retention with integrated financial tools. For example, PayPal Open helps manage payments and expenses efficiently, allowing managers to focus on team development rather than administrative tasks.