Key Takeaways:
- Transparent communication strengthens retention: Leadership openness influences stability, with 86% of employees at Canada’s Best Workplaces™ saying management keeps them informed during important changes.
- Psychological safety supports long-term commitment: High-trust workplaces exceed the 80% threshold for employees reporting a psychologically and emotionally healthy environment, contributing to stronger retention than typical Canadian workplaces.
- Culture directly impacts organizational performance: Organizations with top-quartile cultures outperform median cultures by 60%, reinforcing the link between positive culture and stronger business outcomes (Harvard Business Review, 2023)
- Inclusive workplaces experience greater stability: Workplaces prioritizing diversity and inclusion report higher productivity and healthier retention patterns, supported by national insights from the BDC 2024 report.
Employee retention in Canada is entering a new stage. After years of shifting expectations and uncertainty about the future of work, 2025 is showing a clearer picture of what keeps people committed to their workplaces. Turnover rates are no longer surging, yet the reasons employees choose to stay are changing. Today, long-term commitment depends far more on daily cultural experience than on external factors. Employees want fairness, psychological safety, clear communication, and a sense that their organization genuinely values their well-being. Compensation still matters, but it is no longer enough to secure loyalty. Across industries, a thoughtful and supportive workplace culture has become the strongest predictor of retention.
1. Retention Pressures Are Stabilazing But Expectations Have Shifted
Although turnover across Canada is not rising at the levels seen earlier in the decade, employees are reassessing what makes a workplace worth staying in. Many are choosing stability, but only when that stability includes clarity, purpose, and trust. Employees want to see how their role contributes to the organization’s long-term goals, and they are less likely to remain in roles that feel disconnected or stagnant.
Communication plays a pivotal role in this shift. Clear, honest messaging from leadership has become one of the most important retention signals. At Canada’s Best Workplaces™, 86% of employees say management keeps them informed about important issues and changes. In many typical workplaces, employees often describe communication as inconsistent or limited, which increases uncertainty. When information is shared openly, people feel more anchored during change and more confident in the decisions being made around them. This level of transparency builds the stability employees now expect as part of their everyday work experience.
2. Fairness and Inclusion Are Now Core Retention Drivers
Fairness and inclusion are no longer viewed as standalone programs but as everyday expectations that shape whether employees feel their workplace is worth staying in. People are paying close attention to how decisions are made, who is included in meaningful conversations, and whether opportunities appear equitably distributed. When employees see that decisions are fair and leadership follows through on commitments, trust grows naturally. In contrast, workplaces where decisions feel unclear or inconsistent often see lower commitment and reduced confidence in leadership.
Inclusion also extends beyond representation to the lived experience of employees. It is reflected in daily interactions — being listened to, feeling respected, and seeing leadership support people from different backgrounds. When employees see evidence that their organization cares about creating an equitable experience, they are more likely to envision a long-term future there. This sense of belonging contributes significantly to whether people choose to stay during periods of change or pressure.
3. The Demand for Growth and Development Is Increasing
Career development is one of the most influential factors in retention, and employees in 2025 are clearer than ever about wanting meaningful opportunities to grow. Staying with an employer is far more likely when people understand how they can progress, what skills they should be developing, and how their contributions matter.
Many employees prefer development opportunities that integrate into their workday rather than large, infrequent training programs. They value practical learning: coaching from managers, exposure to projects that stretch their skills, or guidance on future career paths. The role of managers remains central here; when managers communicate openly, set reasonable expectations, and support their employees’ growth, people are more inclined to stay through changes and challenges.
4. Psychological Safety and Trust Are Essential to Long-Term Retention
Retention in 2025 is closely tied to whether employees feel psychologically safe at work. Employees need to be able to ask questions, raise concerns, and share ideas without fear of consequences. This sense of safety influences day-to-day confidence and long-term decisions about whether to remain.
One of the defining characteristics of Canada’s Best Workplaces™ is the strength of this foundation. These organizations meet a benchmark where a significant majority of employees say their workplace is psychologically and emotionally healthy - surpassing the 80% agreement threshold. In many typical workplaces, employees experience stress, burnout, or uncertainty about how to navigate challenges, which weakens loyalty. When employees feel supported emotionally and professionally, trust grows and retention follows.
Psychological safety also depends on consistency. Employees look closely at whether leadership actions match their words. When managers act reliably and respectfully, employees feel that they can bring concerns forward. Respect becomes a stronger retention driver than any perk or benefit because it shapes everyday experience and influences whether people feel valued.
5. Culture Has Become the Most Reliable Retention Signal
Across Canadian workplaces, culture is emerging as the clearest indicator of whether employees stay long term. Daily interactions shape retention more than any standalone policy or initiative. When employees feel respected, supported, and confident that decisions are fair, they are far more likely to commit to their organization.
Research continues to reinforce this connection. A Harvard Business Review analysis found that organizations with top-quartile cultures outperform median cultures by 60% and bottom-quartile cultures by 200% (Harvard Business Review, 2023). While these results highlight performance outcomes, the underlying message is clear: high-quality workplace cultures create conditions where people want to stay.
Canadian data aligns with this finding. A national report from the Business Development Bank of Canada shows that workplaces prioritizing diversity and inclusion tend to be more productive and profitable, reflecting environments where employees experience fairness and long-term opportunity (BDC,Optimizing Workplace Culture for Peak Performance Survey Report, 2024). These are the conditions that reduce turnover and strengthen long-term commitment.
Great Place To Work Canada’s own research supports the link between culture and retention. The High-Trust Culture Drives Business Success Report shows that organizations with high-trust cultures see lower voluntary turnover, greater resilience during disruption, and stronger overall performance.
What This Means for 2025 and Beyond
Retention in 2025 reflects a deeper shift in how employees think about work. People are looking for more than job security; they are looking for workplaces that treat them with respect, communicate openly, and support their well-being. Culture has become the clearest signal of whether an organization can keep its people.
For Canadian employers, strengthening culture is one of the most practical ways to support retention. When employees feel informed, emotionally supported, and confident in leadership, they stay longer, contribute more effectively, and form a stronger connection to their workplace. As organizations navigate the year ahead, building trust and psychological safety will continue to be essential to helping people feel that their workplace is somewhere they can grow and somewhere they want to stay.
Tools & Resources
- Trust Index™ Employee Feedback Survey: A research-backed survey that helps organizations understand employee perceptions, identify cultural strengths, and uncover the drivers behind retention challenges.
- Great Place To Work® Certification: Certification offers a clear picture of culture health, provides benchmark comparisons, and supports retention by highlighting authentic employee experience insights.
- Employee Well-being: Guidance and measurement tools that help organizations understand emotional, social, and mental well-being, which directly influence long-term retention and workplace stability.
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Frequently Asked Questions:
How can organizations understand what factors are driving turnover in their workplace?
Leaders can identify turnover drivers by gathering direct employee feedback through structured listening tools like the Trust Index™ Employee Survey, which helps assess culture strengths and gaps across teams.
What’s the first step to improving workplace culture and retention?
The most effective first step is measuring the employee experience to understand current perceptions. Organizations often begin with the Trust Index™ Employee Survey to pinpoint improvement priorities.
How can leaders build stronger psychological safety within their teams?
Psychological safety grows through consistent communication, respectful behaviour, and clear expectations. Leaders who listen, respond, and create dependable routines help employees feel safe and supported.
How can organizations track whether cultural improvements are working?
Regular measurement, follow-up surveys, and ongoing conversations help leaders see whether changes are improving trust, communication, and fairness. Certification provides annual benchmarking against top workplaces.
