Key Takeaways:
- Meaningful Work Drives Retention: Employees who find their work meaningful are nearly four times more likely to stay, making purpose the strongest predictor of retention across Great Place to Work® Certified™ organizations.
- Workplace Experience Matters More: While fair pay increases intent to stay by 54%, and special benefits by 74%, these factors do not rank among the top three retention drivers in high-trust workplaces.
- Well-Being and Fair Treatment Are Critical: Psychological and emotional health increases retention intent by 103%, while feeling respected regardless of role raises it by 104%, highlighting the importance of everyday workplace experience.
- Turnover Carries Significant Financial Impact: With a 10.2% average turnover rate and costs of $29,234 per employee, a 1,000-person organization could face nearly $3 million in annual turnover-related costs in Canada.
Insights from more than 1.3 million employee surveys reveal a consistent pattern in what influences people’s decisions to stay with their employer.
What influences employees to stay?
Compensation and benefits remain important. However, they are rarely the factors that distinguish high-performing workplaces from others.
Across Great Place to Work® Certified™ organizations, where employees consistently report positive workplace experiences, the strongest predictor of retention is whether people find their work meaningful.
When employees say their work has a clear purpose or personal significance, they are nearly four times more likely to report an intention to stay with their organization (Great Place To Work® 2021 Global Employee Engagement Study). This relationship is more than twice as strong as the link between retention and either fair pay or access to distinctive benefits.
The workplace experiences that matter most for retention
In high-trust workplaces, pay and benefits do not rank among the top drivers of retention. Employees who believe they are paid fairly are 54% more likely to want to stay, while those who report access to special or unique benefits are 74% more likely to remain.
By comparison, three experience-based factors stand out as the most influential drivers of retention, regardless of role:
- Employees who feel their work is meaningful are 294% more likely to want to stay
- Employees who describe their workplace as psychologically and emotionally healthy are 103% more likely to stay
- Employees who feel respected and treated as full members of the team are 104% more likely to remain
Together, these findings suggest that retention is shaped less by compensation strategies and more by how people experience their work on a day-to-day basis.
Differences in retention drivers across genders
An analysis of more than 1.3 million employee surveys collected in 2024 and 2025 also highlights differences in how retention drivers are experienced by men and women.
Meaningful work is the strongest retention factor for both groups. However, psychological and emotional health plays a particularly significant role for women. Women who report working in psychologically and emotionally healthy environments are 123% more likely to want to stay, compared to 87% more likely among men.
Despite these differences in magnitude, the same core experiences influence retention across genders. This suggests that efforts to strengthen purpose, well-being, and fairness are likely to improve retention outcomes for the entire workforce.
Why retention is shaped by everyday experiences
The decision to stay or leave rarely comes down to a single moment. Instead, it builds over time through everyday experiences at work.
In Canada, the cost of replacing an employee can range from approximately 75% to 200% of their annual salary, depending on the role and industry. Recent estimates place average turnover costs at around $29,000 per employee, with a notable share of Canadian employers reporting annual turnover expenses exceeding $100,000 (Express Employment Professionals Canada).
At the same time, burnout is becoming increasingly common. Nearly 39% of Canadian employees report experiencing burnout, which is associated with reduced productivity, higher absenteeism, and a greater likelihood of turnover. Even without precise estimates for how long it takes new hires to reach full productivity, these trends point to meaningful performance and continuity losses when employees disengage or leave (Mental Health Commission of Canada).
At a national level, the impact is significant. Across Canada, the combined effects of mental health challenges in the workplace—including turnover, absenteeism, and presenteeism—are estimated to exceed $50 billion annually. This reinforces the close connection between employee well-being, engagement, and retention.
Recent Canadian benchmarks help organizations estimate the potential scale of turnover costs. With an average turnover rate of 10.2% and estimated replacement costs of $29,234 per employee, a company with 1,000 employees could face nearly $3 million in annual turnover-related costs, with costs rising even higher for more highly paid or specialized roles.
Conclusion
Employee retention is not primarily a compensation challenge. While pay and benefits play an important role, they do not consistently distinguish organizations where people choose to stay.
The strongest drivers of retention are rooted in experience. Employees are more likely to remain with organizations where their work feels meaningful, where their psychological and emotional well-being is supported, and where they are treated with fairness and respect. These conditions are created through everyday leadership behaviours, workplace norms, and organizational culture—not through one-time incentives.
As organizations across Canada navigate ongoing economic uncertainty and labour market shifts, retention is best understood as an outcome of the employee experience. When people consistently feel valued, supported, and connected to purpose, they are far more likely to stay—and to contribute at their best.
This article is an adaptation of the original Great Place To Work®, written by Ted Kitterman, Content Manager.
Tools & Resources
- Great Place To Work® Certification: Provides a research-backed way to validate employee experience, strengthen workplace culture, and improve retention by demonstrating trust, fairness, and meaningful work to current and prospective employees.
- Trust Index™ Employee Feedback Survey: Captures employee perceptions of purpose, well-being, and fairness—key drivers of retention—while offering benchmark data to identify strengths and gaps in the day-to-day workplace experience.
- Employee Well-being: Offers research and tools to understand how psychological and emotional well-being influences retention, helping organizations address burnout and create healthier, more sustainable work environments.
- Employee Engagement: Helps organizations measure and understand engagement drivers tied to retention, including pride, respect, fairness, and credibility, enabling data-informed decisions to improve employee experience.
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