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8 Factors Affecting Employee Retention (And How To Address Them)

Posted on January 9, 2025
minute read

In a constantly evolving market, businesses are challenged with understanding and meeting their people’s changing priorities which move with it. And these crucial factors affecting employee retention are also behind wider workforce performance metrics, including team satisfaction and productivity. Not to mention how happy and healthy the people behind a brand are, as employee wellbeing and organisational culture continue to climb the agenda in 2025.

Employee retention is defined as a business’ ability to hold onto, or retain, its people. With lower retention rates, come high costs to employers, including decreased performance, dissatisfied customers and damaged employer brand. Of course, there are factors outside of an employers’ direct control that contribute to a natural workforce turnover rate, such as employee lifestyle changes, retirement and ill-health, but there are other crucial factors behind employee turnover that are within a business’ control – and in today’s modern, competitive working world, it’s time for employers to better understand and address these to avoid losing their best talent. 

The Top Factors Affecting Employee Retention

Almost every business globally has felt the consequential workplace shifts since the COVID-19 pandemic. Our workplace has changed significantly – and continues to evolve as employees have changed where, how and why they join and remain in a business. So, let’s take a look at the key factors affecting retention in the modern landscape, and how employers can meaningfully address these to not only retain their people – but support and empower them to be their best. 

1. Onboarding

An engaging and human-led onboarding experience is key to attracting and retaining new talent, especially in 2025’s fast-changing workplace. This stage of the employee journey has become increasingly critical – if not done well, 1 in 5 new starters will leave the business within their first 45 days. But, 69% of employees are more likely to stay with a company for at least 3 years if they experience great onboarding.

What to do:

A supportive, human-centric process in those first few weeks makes all the difference. This is about more than just sharing policies and processes – it’s crucial to creating meaningful connections, ensuring employees truly feel part of the team, and aligned with the company’s purpose and values. When employees understand their role in delivering on the business mission and feel valued, seen and heard in their contribution to this, they’re far more likely to stick around. Great onboarding isn’t a box-tick, it’s where effective retention begins.

2. Flexibility

Demand for better flexibility continues to grow as a must-have for many employees who prioritise a working culture that fits around their diverse needs and lifestyles. And this isn’t  just about remote working options, it’s also about trust.. Employees want to feel empowered to do their best work – whether that’s in the office, at home, or somewhere in between. Forward-thinking businesses that embrace flexible setups and cultures are already ahead of the curve when it comes to retaining their people – 78% of employees report they’d be more loyal to companies that offer better flexibility. 

What to do:

Flexibility will look different in each organisation, based on the different demographics that make up the workforce. This is where feedback is key – to truly address the needs of employees, businesses need to first understand them. Then, by fostering a culture of trust alongside the right support and engagement platforms, companies can keep their people connected, informed and feeling valued – wherever they are. Flexibility should no longer be seen as a perk but as a core factor behind employee retention.

3. Reward and Compensation

Reward and compensation are under the spotlight as UK businesses face rising costs from April 2025, making regular or blanket pay rises unfeasible for many. However, as they continue to navigate the cost of living, employees are increasingly looking for more meaningful and modern approaches to being rewarded – latest research highlights just 40% of employees feel their current employer is supporting them with this. 

What to do:

Employers now need to think outside of the box. From personalised perks and wellbeing support to opportunities for growth and recognition, businesses need to take a more progressive approach with their reward strategy. Lifestyle discounts and savings will go the extra mile in affecting employee retention by offering tangible support with everyday expenses, supermarket shops, car repairs and more. 

4. Wellbeing

Wellbeing continues to grow as a top priority, with increasing demand for employers to truly champion this for their people both in- and outside of work. What was previously viewed as a ‘nice to have’ by many businesses is now a crucial factor influencing employee retention with 61% saying that wellbeing benefits are a major factor in their decision to stay with their current employer.

What to do:

Wellbeing strategies now need to encompass everything from protecting work-life balance and offering financial wellbeing tools to supporting wider ESG initiatives in order for employers to remain competitive in attracting and retaining their people. Employees want to feel part of businesses that care about the bigger picture while also providing practical support in their everyday lives such as through gym memberships, dental care, health cash plans, or retail discounts.

5. Benefits

Traditional approaches to employee benefits are also a fundamental factor in affecting poor retention rates. In 2025, they need a modern overhaul. Gone are the days of tick-box perks hiding in a dusty folder or buried on SharePoint. Today’s workforce wants benefits that are visible, accessible and genuinely supportive in adding real value to their lives – 70% of employees say they’d be more likely to remain in their business if offered a well-structured benefits package.

What to do:

Understanding what employees really want from their benefits is crucial to building a competitive package. Gathering feedback and insights directly from teams ensures the offer reflects their diverse and evolving needs, rather than guessing or relying on outdated approaches. Equally, enabling mobile accessibility to a digital benefits space that employees can take advantage of around the clock and from their pockets is a game-changer – not only for maximising return on employer investment, but especially for deskless employees who may not work traditional hours or have access to corporate devices.

6. Career Development 

Employees crave clarity on their career development – and those who are presented with internal progression opportunities are 34% more likely to remain in the business than those who don’t. With clear pathways for growth, transparency on the objectives needed to progress and the skills they need to develop, employees are more likely to stay. 

What to do:

This visibility, alongside recognition for achieving key milestones along the way, is crucial for influencing employee retention. Tools like mentorship, regular feedback and outward recognition not only helps employees feel valued but also ensures they see a long-term future within the business—boosting retention and loyalty.

7. Communication 

Just 29% of employees are satisfied with the quality of their business’ internal communications. Yet, this is particularly vital for keeping workforces engaged and connected – magnified even more so for dispersed or deskless teams. In-the-moment updates and regular notifications are key to influencing retention in today’s working world. And this shouldn’t be exclusive to formal and corporate updates – building a social community and a human touch to workplace communication. 

What to do:

A strong communications strategy built on mobile accessibility ensures all employees stay connected, wherever they are. It should amplify diverse voices and include role models from across the business, creating an inclusive, people-first community. When communication fosters engagement and belonging, a workplace is created where employees feel they truly matter.

8. Recognition

7 in 10 employees say recognition keeps them loyal to their organisation. Recognition is the cornerstone behind a workforce that feels valued, heard, and seen in each of their contributions – the power of a simple ‘thank you’ goes a long way. When people feel appreciated and treated as individuals, rather than just numbers, their connection to the business strengthens – and so does their likelihood of retention.

What to do:

Implementing a multi-level culture of recognition empowers both managers and peers to celebrate colleagues in meaningful ways. From the big achievements to the everyday wins, recognition goes a long way. This should also celebrate service anniversaries and key milestones, through to more sophisticated approaches like internal award schemes.  By celebrating every person at every level, businesses create a positive, empowered workplace where all talent can thrive – and want to stay. 

The Bottom Line on Improving Employee Retention

Productivity-driven approaches to workforce engagement and retention are no longer cutting it in a world where employees seek authentic connection and support from their workplace, and importantly, feel seen, heard and valued for what they bring. As we’ve explored here, there are a multitude of factors affecting employee retention in today’s market – and perfecting the best formula will be unique to every organisation. However, by prioritising a human-centric approach, employers can identify what their people need to truly thrive in the business, and ultimately remain in role.

Recognised users on Rippl are 52% less likely to leave their business.

Rippl is where everyone matters. We tailor multi-dimensional recognition, reward and benefits programmes that are as unique as your workforce. We deliver meaningful connections your employees, and ensure measurable impact for your business. Book a demo today to find out more.

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FAQs on the Factors Affecting Employee Retention

Each and every business is brilliantly unique – and so are the most influential factors on its retention rates. Fundamentally, this relies on understanding the demographics of the workforce and how well the diverse breadth of its needs are being addressed – any key blindspots will likely have the biggest impact on retention. 

Retention rates are influenced by several key factors. A human-centric onboarding process sets the tone, with 69% of employees more likely to stay 3+ years when it’s done well. Flexibility is another must for empowering employees to balance a diverse breadth of work and life needs. Recognition and reward strategies require a modern and meaningful approach, alongside wellbeing benefits across mental, physical, and financial support are now non-negotiable. Visibility and accessibility to a digital benefits package are game-changers, as are clear career development pathways and recognition at every level. Add strong, inclusive communication, and businesses create a culture where employees feel valued, connected, and committed.

Recognition, Reward, and Respect are essential for building engagement and minimising workforce attrition. Employees need to feel valued for their contributions through praise, recognition or awards. Reward can encompass everything from competitive pay, meaningful benefits or career growth opportunities to show employees they’re worth investing in. And a workplace culture built upon fairness, transparency and listening to employees, creates a culture of respect and trust. Together, these principles create a workplace where employees thrive – and stay.

A retention strategy is a proactive plan to keep the people behind the brand engaged, motivated, and loyal to the business. A comprehensive approach will focus on key areas like onboarding, flexibility, wellbeing, rewards, career growth, and recognition. However, each strategy will look different across each unique business – and by understanding employees’ needs first and foremost, employers can formulate the best strategy for them.

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