Employee retention continues to be a critical challenge for businesses, though the situation has improved since the peak of high turnover rates in previous years. According to the 2023 Attraction and Retention Employer Pulse Survey, 53% of employers report struggling with employee retention, a decrease from over 58% in 2022.
With talent competition still fierce, businesses need to be proactive in keeping their best employees. Last year’s survey highlights the biggest retention challenges employers faced and the strategies they used to attract, retain, and engage top talent.
Top Talent Challenges in 2024
When asked about their biggest hurdles in hiring and retention, employers identified the following key challenges:
- 48% – Meeting worker demands for competitive compensation.
- 43% – Finding employees with the right skill sets.
- 32% – Recruiting candidates with the necessary education or certifications.
- 28% – Offering competitive healthcare benefits amid rising costs.
- 28% – Receiving enough job applicants.
These challenges emphasize the importance of competitive pay, benefits, and targeted recruitment efforts. Employers must ensure they are offering attractive compensation packages while also developing internal training programs to upskill current employees.
The Most Effective Retention Strategies
To combat turnover, employers are exploring a variety of employee retention strategies. The survey found the top five strategies businesses used in 2024 include:
- 53% – Improving compensation.
- 22% – Offering bonuses.
- 17% – Enhancing healthcare benefits.
- 15% – Expanding voluntary benefits.
- 13% – Investing in mental health resources.
In addition to these top strategies, businesses are also focusing on providing more paid time off, college recruitment programs, and employer branding initiatives to remain competitive in the job market.
Key Takeaways for Employers
Retaining employees is less of a challenge than in past years, but businesses must stay ahead by continuing to adapt their workforce strategies. Here are some practical steps companies can take to improve retention in 2025:
- Reevaluate pay strategies to stay competitive in your industry.
- Expand voluntary benefits to offer employees more comprehensive coverage.
- Enhance mental health resources or introduce an employee assistance program.
- Invest in learning and development programs to support career growth.
- Train managers on effective leadership and employee engagement strategies.
- Conduct employee surveys to better understand workplace needs and expectations.
By implementing these strategies, employers can create a workplace culture that supports employee satisfaction, growth, and long-term commitment.
If you’d like to explore these strategies further or review your current employee benefits program, contact McHugh Insurance Group today.