Business Leadership Today

The 5 Main Drivers of Employee Retention


Matt Tenney, Author of Inspire Greatness: How to Motivate Employees with a Simple, Repeatable, Scalable Process

Over 4.5 million US workers voluntarily left their jobs in November of 2021. This surge in attrition has led many organizations, some of which were already struggling with retention, to fear the fight for talent is a losing battle for them.

There are a variety of factors driving this turnover. Unfortunately, many employers seem determined to either stick to the “old normal” pre-pandemic way of doing business or are short-sightedly sticking to unsustainable, reactionary strategies that won’t solve the problem in the long term.

To craft strategies that work will require these organizations to take a hard look at what’s driving their workers away and consider what they are looking for when they seek out other jobs. 

In study after study, workers in the US have cited several common factors that drove them to quit. We need to pay attention to what they are saying in order to forge ahead with new retention strategies that work.

The five main drivers of employee retention are strong leadership, frequent feedback, including recognition, opportunities for advancement, competitive compensation packages, and a good work/life balance. For retention strategies to be successful, they should be crafted with these five drivers in mind.

In this article, we’ll discuss these five main drivers of employee retention and some ways to incorporate them into your retention strategy. 


Toxic work cultures and poor leadership have been cited as one of the main drivers of the turnover we’ve seen with The Great Resignation and now quiet quitting. 

The duration of an employee’s tenure is primarily determined by the relationship they have with their direct manager according to a 25-year study by Gallup, with about 50-70% of an employee’s perception of their work environment linked to the actions and behaviors of management.

Strong leaders guide employees, model core values that reinforce more of the behaviors employers want to see in the organization, and they prevent work environments from turning toxic.

The day-to-day interactions employees have with management strongly impact their employee experience and can determine the likelihood a worker will stay in that position. 

Ensuring that leaders at all levels within the organization are modeling core values and forging trust-based relationships with staff is an important component of any organization’s retention strategy. 

This process can begin at recruitment. 

Hiring for cultural fit is always good for retention, but it is also good for succession planning. When management positions open up in the future, you may already have a good candidate pool within the organization if you’ve hired for cultural alignment. 

Investing in leadership development for your top talent and offering career pathing and other professional guidance are great ways to hold onto employees with the skill set the organization needs, to ensure the organization’s cultural DNA is not lost due to attrition.


A lack of regular feedback and recognition ranks high on the list of reasons employees are leaving their jobs.

Employees need feedback on a regular basis to excel in their jobs and build the kind of engagement needed for retention. It provides not only job clarity, but also helps employees course correct when needed, develop an improvement mindset, and build confidence in their work.

But, to be most effective, it needs to be a two-way street, with leadership being open to feedback from employees. This gives employees a voice and helps them to build trust with leadership, which increases employee loyalty. 

Regular feedback, including frequent, specific recognition of employee contributions, helps maintain retention because it shows employees that leadership is paying attention, and it demonstrates that the work they do is seen, appreciated, and acknowledged. 

In organizations that emphasize feedback as an important part of their culture, employees receive regular, helpful feedback from direct supervisors and are empowered and encouraged to provide meaningful feedback to co-workers and leadership. 

Author and Business Leadership Today contributor Andrew Freedman advises that the best way to give feedback to your employees is to first set clear expectations for them. Feedback should be aligned with those expectations and presented within a framework that inspires growth through improvement.  

Recognition should always be part of the feedback leaders provide because employees thrive on recognition. When their contributions aren’t recognized, this lack of recognition can end up nudging them toward another job.

Recognition is such a powerful tool for building engagement because it meets a core human need for both the employee and the manager. 

Praise can be a powerful motivator. Business leaders may not realize how important praise and recognition can be for employees, but it really does offer an array of benefits for organizations and their teams. 

Psychology tells us that praise is the primary source of positive reinforcement, the process of modifying behavior for a more positive result. Leaders can use praise to recognize and reinforce positive behavior in their employees.


Many who quit their jobs during The Great Resignation cited lack of advancement opportunities in their organization as a significant factor in their decision to leave.

Research compiled by LinkedIn has shown that employees who spend time learning on the job are 47% less likely to be stressed, 39% more likely to feel productive and successful, 23% more able to take on additional responsibilities, and 21% more likely to feel confident and happy.

To retain talented employees, you have to let them know they have a future in the organization and that leadership is invested in their development. 

Employees need to feel that they are growing professionally and developing their skills and intellectual capabilities. Employees who feel they are growing in their jobs are more likely to be engaged in their work and more likely to stay.

Offering learning opportunities, either through in-person or online training, tuition reimbursement, leadership development, and helping employees chart their career paths through mentoring and coaching are just a few ways employers can utilize professional development opportunities to boost retention.

Development opportunities shouldn’t just be for leaders; everyone within the organization should have the opportunity to develop professionally and advance in their field. This is key for retaining employees but also a great strategy for succession planning. 

Helping your employees develop so that they can move into leadership roles within the organization also helps the organization retain vital institutional knowledge and cultural DNA. 


While other factors are certainly contributing to an increase in turnover these days, compensation, including salaries and benefits, is still considered one of the main drivers of turnover. Equitable compensation continues to be an issue for many organizations.

According to Business Leadership Today contributors Mark S. Babbitt and S. Chris Edmonds, it isn’t just the “old-school, patriarchal companies that find themselves on the wrong side of many employees’ lines in the sand.” 

Fewer than 1 in 4 of the US’s largest employers have analyzed their pay gaps based on gender. It is believed that fewer than 1 in 20 companies has performed a pay gap analysis by any other demographic (race, religion, geographic location, etc.).

An organization that does not offer a decent (and equitable) salary and benefits that are attractive to potential employees will struggle to recruit talented employees. After employees are hired, they won’t stay without a salary that keeps pace with the cost of living and will be apt to seek out job opportunities with organizations that offer more money and better benefits.

Organizations may think that fair, equitable compensation isn’t doable for them financially. But when you consider the costs associated with turnover, and that poor compensation is one of its main drivers, it’s clear that it will be difficult to maintain a heavy bottom line if an organization can’t recruit and retain good employees.

Beyond equitable pay, offering benefits that meet employee needs and address the issues that are causing them to leave gives organizations a competitive advantage. 

When employees’ needs are met, they are more likely to stay with an organization. Being well-compensated, through pay, benefits, and other employee perks, for the work they do motivates employees to do their work well and inspires greater loyalty.

Work/Life Balance

Another prominent driver of retention, the lack of which has propelled turnover, is the work/life balance organizations offer their employees. 

The pandemic gave rise to remote and hybrid work environments. It was assumed early on in the pandemic that this would be temporary. As the pandemic seems to be winding down, some employers are starting to call employees back into the office, and they are none too pleased

Many employees who have been able to do their jobs from home for the last two years don’t see why they should have to give that up, along with their improved work-life balance. Employers would do well to hear them out on this. 

Allowing employees to work from home gives them the flexibility to take better care of their families and personal needs—employees are better able to do this when they aren’t having to spend hours every week making those long commutes to an office to do work they can do just as easily from home.

Offering flexibility (when possible) in work schedules is the first step to equipping employees with the tools they need to work with autonomy, another important factor in building engagement and retention. 

This flexibility provides a better work-life balance, although it’s important to avoid letting work time bleed over into personal time, and can help cut down on the stress that comes with long commutes and toxic office environments.

Leaders can help ensure their employees achieve a good work-life balance by dealing with potentially toxic situations in a timely manner, not requiring workers to put in long hours on a regular basis, and limiting communications to work hours only so employees have a chance to fully disconnect from their jobs when they aren’t at work. 

Improving Employee Engagement Improves Retention

In order to improve retention, organizations need to improve employee engagement. They do this by positively shaping employee experience, starting at recruitment. 

According to Gallup, “Employees who are engaged are more likely to stay with their organization, reducing overall turnover and the costs associated with it. They feel a stronger bond to their organization’s mission and purpose, making them more effective brand ambassadors. They build stronger relationships with customers, helping their company increase sales and profitability.”

Engagement is particularly important as employees who care more about an organization’s mission feel a sense of purpose in their roles and will be less likely to leave an organization they feel strongly connected to.  

This helps organizations avoid the high costs associated with turnover, which include the costs of recruiting and onboarding new employees, loss of productivity, and effects of disengagement on performance. 

Engaged employees are enthusiastic about their jobs and committed to the success of the organizations they work for. They demonstrate their dedication through behaviors that help organizations perform well, grow sustainably, and improve profits.

Retention practices that are focused on meeting employee needs and helping employees thrive will improve engagement, and higher levels of engagement will improve the organization’s retention rate.

Fostering An Organizational Culture That Helps Employees Find Meaning Improves Retention

Culture plays a critical role in both attracting and retaining top talent. It’s also crucial to helping employees see deeper meaning in their work.

Workers are paying attention to what organizations stand for these days and are seeking meaningful work with organizations that share their values.

Glassdoor found that 77% of workers consider a company’s culture before applying. Another study showed that 70% of employees say they wouldn’t work for a company that didn’t have a strong purpose.

Even more interesting, 60% would take a cut in pay to work at a purpose-focused company, and 90% of employees who work for companies with a strong sense of purpose say they’re more inspired, motivated, and loyal.

People want to know that they’re working for something more than just a paycheck and want their work to be valuable beyond its monetary value. 

When employees feel a sense of purpose in their jobs, and when they can take a wider view of their work and see how it impacts the world, they will be more loyal to the organization and more likely to stay put. 

A strong organizational culture will provide the meaning employees seek by connecting the dots between the work they do and its impact on the lives of others.

A recent report found that 89% of employees say they are more likely to be loyal to purpose-driven companies, highlighting the important role meaningful work may play in people’s job-seeking behaviors.

A compelling mission and core values that guide employees in helping to achieve a compelling vision can unite your team with a shared sense of purpose, making workers more engaged with their work and more loyal to the organization. 

An organization’s culture should be people-focused, with core values that guide employee behaviors and help them recognize the purpose of their work. These core values should be modeled by leadership.

As Business Leadership Today contributor John Spence says, “Creating an atmosphere of fun, camaraderie, empowerment, pride, purpose, and recognition does not happen by chance. Senior leaders must be a living example of the organization’s values and act according to the sort of culture they want to nurture.” 

Matt Tenney has been working to help organizations develop leaders who improve employee engagement and performance since 2012. He is the author of three leadership books, including the groundbreaking, highly acclaimed book Inspire Greatness: How to Motivate Employees with a Simple, Repeatable, Scalable Process.

Matt’s ideas have been featured in major media outlets and his clients include numerous national associations and Fortune 500 companies.

He is often invited to deliver keynote speeches at conferences and leadership meetings, and is known for delivering valuable, actionable insights in a way that is memorable and deeply inspiring.

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