Carla Sutherland
Employee attrition is a measure of how many employees voluntarily depart an organization in a defined period. Likewise, employee retention is a measure of how many employees stay. Retention is important for obvious reasons, not least of which are that hiring processes can be expensive and attrition is bad for morale.
As we forge ahead into the close of 2025, understanding the challenges and opportunities facing employee retention is more vital than ever.
Why is employee retention important?
Retaining talent translates into a multitude of benefits for any organization, ranging from significant cost savings to improved productivity levels and stronger, more resilient morale. When employees stay, they accumulate knowledge and skills that boost efficiency and smooth out workflows. Additionally, deep institutional knowledge is reassuring for newer colleagues and presents valuable training and mentorship opportunities.
High retention rates often correlate with better job satisfaction among remaining employees, fostering a more positive organizational atmosphere. According to Gallup’s State of the Global Workplace report, organizations with higher employee engagement can achieve 21% higher profitability and a staggering 59% lower turnover rates. Clearly, solid retention strategies not only mitigate the risks associated with turnover, but also contribute to creating an environment where employees thrive.
10 barriers to employee retention in 2025
As we delve deeper into the challenges surrounding employee retention, it’s essential to recognize the barriers that many organizations are facing in 2025, such as:
1. Remote and hybrid burnout
The rise of remote and hybrid work arrangements has provided great flexibility, but the continual blending of work and home life can blur boundaries and create stress. These boundary breakdowns have led to widespread burnout that can take anywhere from days to months to overcome.
2. Lack of career growth and development
Employees today seek more opportunities than ever for professional growth. A lack of clear pathways for advancement within an organization can push them toward job openings that promise more significant career growth elsewhere.
3. Inadequate compensation and benefits
In a competitive job market, simply providing adequate salaries and benefits is no longer enough. Employees are increasingly evaluating their compensation packages against industry standards and peer organizations. Consider the addition of employee benefits that tangibly improve their compensation totals, such as discounts programs or wellbeing stipends.
4. Toxic company culture
A positive company culture can make or break employee experience. Unfortunately, negative workplace environments characterized by poor communication, lack of trust, and exclusionary practices can lead to higher attrition rates. Bad bosses ruin lives.
5. AI and automation anxiety
With the rapid advancement of artificial intelligence and automation, many employees worry about job security. This anxiety can erode trust in their employer and prompt them to seek stability elsewhere.
6. Generational shifts
The workforce is becoming increasingly multigenerational, with Baby Boomers retiring and Millennials and Gen Z taking their place. Each group brings different values and expectations about work, making it essential for organizations to adapt.
7. Workplace globalization
As businesses expand globally, cultural differences and time zone challenges can create friction within teams, hindering collaboration and compromising employee satisfaction.
8. Poor employee recognition
Recognition plays a critical role in employee engagement. When contributions go unacknowledged, it can lead to feelings of undervaluation and a higher likelihood of looking for new opportunities.
9. Micromanagement
Micromanagement can stifle creativity and breed resentment among employees. A lack of autonomy can lead many to seek environments where they feel trusted and empowered.
10. Unhealthy work-life balance
In the pursuit of results, many organizations overlook the importance of work-life balance. Employees who struggle to balance their professional and personal lives are at a higher risk of burnout and thus more likely to leave.
Strategies to address key challenges in employee retention
1. Strengthen onboarding and ongoing training
An effective onboarding process sets the tone for employee engagement. Ongoing training not only develops skills but also fosters a culture of continuous learning.
2. Support career growth and development
Providing clear pathways for progression – through mentoring, training, and opportunities for lateral and upward mobility – can engage employees and reduce turnover.
3. Implement a meaningful employee recognition strategy
Creating a system that acknowledges individual and team achievements can foster a culture of appreciation, motivating employees to stay.
4. Prioritize competitive compensation and benefits
Regularly reviewing compensation and benefits against industry benchmarks ensures that employees feel valued and appreciated for their skills.
5. Promote employee wellbeing and work-life balance
Encouraging a healthy work-life balance through flexible scheduling, wellness programs, and mental health resources can significantly improve retention.
6. Leverage exit and stay interviews
Conducting exit interviews helps organizations understand why employees leave, while stay interviews provide insights on what keeps employees engaged and satisfied.
7. Build a strong workplace culture
Fostering an inclusive and positive workplace culture can increase employee pride and satisfaction, driving retention.
8. Train and support managers
Investing in management training enables leaders to build rapport with their teams and create a supportive environment conducive to retention.
Engage your workforce and reduce turnover with Reward Gateway | Edenred
As organizations navigate the evolving challenges of employee retention in 2025, using tools like our employee experience platform can facilitate engagement and help create a positive workplace culture. By implementing thoughtful strategies informed by the challenges above, organizations can strengthen retention efforts and remain competitive in a complex labor market.
Retaining top talent isn’t just about managing risks – it’s about fostering an environment where your employees can truly thrive.
Learn more about how Reward Gateway | Edenred can help you make your corner of the world a better place to work!
