Why Do Employees Stay? 10 Confirmed Ways To Improve Worker Retention

In a work climate where employees are constantly job hopping, many employers are asking: how can we convince people to stay? 

Nectar's recent study reveals the truth behind what makes an employer sticky. We explain why employees choose to remain with their current organization while offering data and expert-backed tips to create a work environment your employees won't want to leave.

Top 10 Reasons Employees Stay With Their Employer 

We asked 1,000 full-time US employees to select the top five things that matter most when deciding whether to remain with an employer. Here are ten trending themes in order of popularity:

1. Employee benefits were a top factor for 81.6% of employees.
2. Work-life balance was essential to 80.1%.
3. Fair pay was a top choice for 78.2%.
4. Employee recognition was a priority for 53%.
5. Professional development opportunities were important for 45.60%.
6. Meaningful work was significant for 41.20%.
7. Company culture was valued by 37.90%.
8. Company leadership was a game-changer for 31.90%.
9. Company transparency mattered to 27.10%.
10. Role clarity was a key factor for 23.40%.

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1. Employee Benefits

Our survey revealed that employee benefits are incredibly persuasive for 80.19% of male and 83.19% of female workers. Interestingly, 45 to 54-year-olds are even more keen to work for an employer that offers generous benefits, with 85.88% of employees in this age bracket choosing benefits as a top choice, compared to 77.34% of those over 54. 

Your total compensation package could encompass everything from core benefits like health and retirement plans to various lifestyle perks such as pet care and wellness treatments. We spoke to Basil Vetas, co-founder of the ICHRA administration platform Leeway, to learn more about why certain types of employee benefits are integral to both hiring and retention strategies:

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“Offering a robust employee benefits package is an important way for employers to stand out and differentiate themselves in today’s competitive job market. The foundational employee benefits are health insurance and retirement plans—given that employees today often change jobs every two to three years, if these two foundational benefits don’t meet the unique needs of each employee, it can be the difference between a key hire sticking around long term versus jumping ship.”

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One of the most challenging aspects of creating an employee benefits package is ensuring it appeals to different demographics, which is difficult when some workforces include five generations. Focusing on health coverage specifically, Basil Vetas explains the importance of choosing flexible benefits that can be personalized according to your employees’ individual requirements rather than being stuck with a group plan. 

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“Employees can have particularly unique needs when it comes to their health insurance—where an employee lives, their age, and whether or not they have dependents can significantly impact the kind of health coverage they require. Traditional group health insurance has historically worked well for workforces co-located in a single state with more homogeneous demographics; however, as the nature of work changes and teams become more remote and distributed, traditional group health insurance often falls short. 

That hasn’t stopped employers from continuing to innovate around their employee benefits offerings, and in recent years, various alternative models for employer-sponsored health benefits have gained in popularity, such as association plans, individual coverage HRAs, and level-funded plans. These innovative models often do a better job of containing costs while offering more flexible, personalized benefits options that meet the needs of a diverse workforce.” 

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Nectar Tip: Survey your employees to understand their needs, then design your employee benefits strategy accordingly. You don't need to pad your total compensation package with all the different benefits and perks available. Instead, you could follow the advice of Gaby Israel Grinberg, Chief Experience Officer at Proofpoint Marketing, by focusing on your core benefits. She advises, "Let's do fewer things, but do the big things really, really well."

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2. Work-Life Balance

Work-life balance is about ensuring that the different areas of your life are in harmony. But what does this look like in reality? 

Finding an employer that offers work-life balance as part of its culture is a top priority for 84.26% of female and 76.42% of male employees. Our survey also found that this retention factor mattered even more to older employees—85.16% of workers over 54 years chose work-life balance as a top priority compared to 76.38% of 36 to 45-year-olds and 79.31% of 18 to 24-year-olds. 

We spoke to Linda Lutz, a highly experienced career coach and counselor for JobTest.org, who described how work-life balance has become a non-negotiable for many of her coaching clients. 

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“Since the pandemic, I've seen a rise in clients re-evaluating everything from life to career. People began looking closely at what really mattered in life and have been making adjustments to their new priorities. Life balance and meaningful work are at the top of the list.”

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Of course, work-life balance can mean different things to employees at various life stages: 

• Working parents may want to spend extra quality hours with their children rather than having their daily schedules jammed with commuting and daycare drop-offs. 
• Older employees may crave flexibility to travel while still being able to work part-time or remotely. 
• Younger workers may want flexible schedules that allow them to pursue personal interests and side hustles outside of their jobs. 

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Nectar Tip: Consider offering flexible work arrangements to your employees to improve their work-life balance. In a separate study on employee retention and turnover, 88% of workers reported that schedule flexibility is an important work arrangement.

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3. Fair Pay

Unsurprisingly, employee loyalty often boils down to money, with 78.2% of workers citing fair pay as a top reason to remain. Our research revealed some interesting differences between how various demographics relate to this topic:

• Fair pay was a top priority for 80% of women compared to 76.6% of men. 
• Fair pay matters more as you get older. 75.86% of 18-24s chose it as a top retention factor compared to 90.63% of over 54s. 
• Fair pay matters less to higher-educated employees. 60% of postgraduates chose this as a loyalty decision, compared to 82.61% of workers who graduated high school. 
• The more you earn, the less likely you are to be impacted by fair pay. Only 63.16% of people earning over $150k selected this as a reason to remain with an employer, compared to 84.57% of those earning below $25k. 

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To determine what fair pay means to your organization, consider two questions: 

• Are employees receiving pay consistent with what they’d earn in similar roles outside your organization? 
• Are your employees paid a wage equal to others in similar internal roles? 

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Nectar Tip: Benchmark your current salary and benefits packages against industry standards to ensure your employees are compensated fairly. You might also introduce pay transparency into your organization, providing job leveling and salary ranges to employees so they can see how their compensation compares to other roles in the organization and what they must do to earn more.

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4. Employee Recognition

If you actively appreciate your employees' contributions, they are more likely to remain with your organization and excel in their roles. Our research revealed a fairly even split: 53.96% of male employees put recognition in the top five reasons they stay, compared to 51.91% of female workers. 

In a dedicated employee recognition study, we reported a direct correlation between recognition and turnover: 71% of employees would be less likely to leave their organization if recognized more frequently. The good news doesn't stop there. Employers who take the time to acknowledge their workers can also enjoy the following benefits: 

• 83.6% of employees report that recognition affects their motivation to succeed at work 
• 77.9% would be more productive if they were recognized more frequently 
• 81.9% agree that recognition for their contributions improves their engagement 
• 87% believe meaningful recognition impacts their job satisfaction

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To understand more about the link between recognition and employees' stay decisions, we spoke to Nectar's SVP of People and Culture, Cassidy Gonzalez, who shared: 

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“Recognition is incredibly important for employees considering whether to stay or leave a company. When employees are recognized, they feel valued. They stay motivated and engaged, and leaving is rarely even on their mind. Or when an opportunity does arise, making a decision is much harder because of the knowledge of their impact.

On the other hand, when an employee's contribution is disregarded, they can easily tell the story that they are no longer needed by the company. The decision to stay becomes simple to make, and it won't be favorable.”

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Cassidy also points to the work of business guru Patrick Lencioni, whose HR book “The Three Signs of a Miserable Job: A Fable for Managers (And Their Employees)” unpacks the core reasons that employees feel dissatisfied at work, all of which link back to recognition (or a lack of it!)

• Anonymity: People cannot be fulfilled in their work if they are not known—at least by their own managers.
• Irrelevance: Everyone needs to know that their job matters to someone. Without seeing a connection between your work and the satisfaction of another person or group of people, you will not find lasting fulfillment.
• Immeasurability: Employees need to be able to gauge their progress and level of contribution for themselves, not simply based on the whims and opinions of their manager or other influential people.

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Nectar Tip: It's easy to incorporate recognition as a daily part of your work culture by using employee recognition software and setting up a reward and recognition policy so everyone understands how to participate in your program.

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5. Professional Development Opportunities

Almost half of the employees we surveyed choose to stay with a company due to the professional growth opportunities. However, there is a pronounced gap between the 49.06% of men who value this and the 41.7% of women. As you might expect, younger workers are more attracted to development than older generations, with 49.43% of 18 to 24-year-olds choosing this as a top priority compared to just 32.03% of over 54s. 

LinkedIn’s latest Workplace Learning Report digs deep into the latest development trends, noting three main areas:

• Four in five people want to learn more about using AI in their profession. Companies can capitalize on this by offering relevant AI skills courses to energize their talent.
• Today's learners are motivated by career progress. Learners who set specific career goals are four times more likely to engage with their development than those who don't set goals. 
• 90% of organizations are concerned about employee retention. Providing learning opportunities is the number one retention strategy. 

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Career coach Linda Lutz further explains that professional development must align with career advancement opportunities if you want to make it easier for employees to stay. 

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“Professional development is a highly desired benefit for candidates considering new opportunities. However, professional development alone isn't enough. Employees need the ability to leverage their newly developed skills and knowledge, along with room to advance within the organization. Without the opportunity to utilize their new skills, employees are likely to leave for a role where they can.”

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Nectar Tip: Create a range of development opportunities, such as mentoring, job shadowing, professional training courses, and access to industry conferences. You might also introduce custom employee challenges where you reward people for completing their development courses.

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6. Meaningful Work

Work is no longer just an exchange of time and labor for wages. Instead, meaningful work is rooted in purpose and direction. Employees want to know that the work they spend their time on is important—to them, the company, and even the broader community.

That's why 45.32% of female employees chose the ability to perform meaningful work as a top reason to remain with an employer. This was higher than 37.55% of men, who also value this. Interestingly, there's an enormous gap between the 31.03% of people aged 18-24 who care about their work's purpose and 64.84% of those over 54.

Research proves a clear link between workers who perceive their jobs as meaningful and a whole host of other benefits, including:

• Higher job satisfaction
• Increased engagement 
• Lower absenteeism 
• Better health 

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Understandably, workers who experience these benefits will feel more willing and able to commit to their employer for the long term.

Nectar Tip: Help employees understand the impact of their work by sharing stories about how your company is making a positive difference in people's lives, society, or even the environment. You might also reward employees who volunteer their time or skills for a cause they care about during working hours. They'll feel more connected to your company while contributing at work—it's a win-win.

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7. Company Culture

Company culture is hard to define, but it may refer to your organization's general vibe: its unique blend of initiatives, personalities, and values. It's the sum of all behaviors and interactions that shape how things get done.

39.25% of male and 36.38% of female employees rate this as a top priority. The stats are pretty consistent across all age categories but vary somewhat regarding employees with different educational backgrounds. Only 32.74% of high school graduates' retention decisions are influenced by company culture, compared to 46.67% of post-grads. 

Nectar Tip: Cassidy Gonzalez describes how employers can shape their company culture with better retention in mind: 

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“There are things all companies can do generally to improve retention, such as career growth, internal training and development, fair compensation, or comprehensive benefit packages. But I think the key to creating a culture that employees won't want to leave is to intentionally build a targeted retention plan. Take the time to understand your current employee base and discover what keeps them in their role. This could be through stay interviews, manager check-ins, or an engagement survey. Find out the things that are unique to your company and increase loyalty in the way that makes sense for your business.”

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8. Company Leadership

A company's leadership is a primary reason that 34.15% of men and 29.36% of women choose to stay. However, there's a sharp decline in the relationship between age and leadership-focused retention decisions. 41.38% of 18-24 year olds are swayed by their leaders compared to 25% of those over 54. This is likely because those in higher age brackets may be leaders themselves.

You only have to scroll through your LinkedIn feed to understand the impact of bad leadership on individual employees and the overall company. Those in positions of power significantly affect whether people respect their employer and want to remain working there long-term. A separate Nectar study demonstrates the importance of investing in your managerial and leadership bench:

• 40% of employees rank managers as the group that has the most impact on them recognition-wise 
• 33% of employees say CEO or executive-level feedback is the best
• Unfortunately, 28% of employees never receive recognition from the company CEO and the executive team

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Nectar Tip: Succession planning sets your company up for the future by earmarking potential leaders and equipping them with the skills they need to support others. Manager training is also crucial for developing the employees under their wing.

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9. Company Transparency

26.98% of male and 27.23% of female employees rate company transparency as a vital factor in their decision to remain with an employer. In a workplace context, transparency refers to trust, open communication, and honesty about key issues like company performance, job expectations, and compensation.

Transparency builds a sense of mutual respect and accountability between employers and employees. It's also linked to higher levels of employee engagement and motivation. Employees who feel trusted with important information will feel more connected to the company's vision and mission.

Cassidy Gonzalez unravels how transparency can influence employees' stay decisions:

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“No news is not good news when it comes to hearing from your leadership team. Any lack of communication can result in employee frustration, rumor mills, and worst-case-scenario thinking. When these things happen, employees have an increased likelihood of finding new employment. Transparency will always be in your favor, even if you're sharing news that may be hard to hear, such as missing targets or having to remove a benefit to save costs. Transparency breeds better problem-solving as a team. Transparency shows empathy. Transparency shows trust.”

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Nectar Tip: Make transparency a core value within your organization by developing a consistent internal communications strategy, including regular company-wide updates, town halls, and employee feedback sessions.

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10. Role Clarity

Role clarity may be last on our list of trending reasons employees choose to stay with an organization, but it matters significantly to 25.85% of male and 20.64% of female employees. This signals that role clarity is still essential for about a quarter of your organization.

Career coach Linda Lutz highlights what can happen when role descriptions appear blurry: 

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“Role clarity is important for both retaining and attracting top talent. When employees have a well-defined understanding of what success looks like, they can direct their efforts more effectively and experience a sense of accomplishment. This clarity becomes even more critical for roles that are dynamic and demand adaptability.

I recently worked with a client with a role that wasn't clearly defined and a manager who seemed unaware of what and how much she was accomplishing every day. She came to me to find a new role. Through our work she was able to secure a promotion to a different role at the same company. At first, she was still thinking about leaving, but as she began working the role, she found it was a better fit with clear role expectations.”

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Nectar Tip: Achieving role clarity for every position in your org chart will require some legwork, but it's worth the effort. Start by developing detailed job descriptions and related role competencies based on input from managers, employees in the role, and HR. Use this information to create performance criteria and objectives for each role and encourage regular check-ins between managers and employees to ensure expectations are continually being met.

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Create A Culture Employees Never Want To Leave With Nectar

Nectar offers a suite of tools to boost morale and create a working environment your employees will want to remain in for the long term. Here’s a rundown of how our top features work:

• Recognition: Peers, managers, and leaders appreciate each others’ contributions by sharing praise and Nectar points in our internal social feed. 
• Rewards: Employees redeem their points for an enticing selection of rewards, including gift cards, Amazon products, company swag, charity donations, and custom rewards. 
• Challenges: Employers can ignite friendly competition by setting up motivating challenges where participants receive points on completion. 
• Milestones: Every employee receives Nectar points and a celebratory message on their birthday or work anniversary. This inclusive feature is fully automated, so special days are never missed.

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Ready to extend your employee lifecycle with a platform rated 4.7 out of 5 with the G2 community? Book a free Nectar demo today.