Employee retention

Employee retention is the ability of an organization to retain its employees and ensure sustainability. Employee retention can be represented by a simple statistic (for example, a retention rate of 80% usually indicates that an organization kept 80% of its employees in a given period). Employee retention is also the strategies employers use to try to retain the employees in their workforce.^[1]

A distinction should be drawn between low-performing employees and top performers, and efforts to retain employees should be targeted at valuable, contributing employees. Employee turnover is a sign of deeper issues that have not been resolved, which may include low employee morale, absence of a clear career path, lack of recognition, poor employee-manager relationships or many other issues. A lack of job satisfaction and commitment to the organization can also cause an employee to withdraw and begin looking for other opportunities. Pay sometimes plays a smaller role in inducing turnover as is typically believed.^[2]

In a business setting, the goal of employers is usually to decrease employee turnover,^[3] thereby decreasing training costs, recruitment costs and loss of talent and of organisational knowledge. By implementing lessons learned from key organizational behavior concepts, employers can improve retention rates and decrease the associated costs of high turnover. Some employers seek "positive turnover" whereby they aim to maintain only those employees whom they consider to be high performers.

In today's environmental conscious behavior society, companies that are more responsible towards environment and sustainability practices can attract and retain employees. Employees like to be associated with companies that are environmentally friendly.^[4]

Employee turnover is a challenge for both private and public sector organisations. Scholars have observed that employee-friendly policies may play an important role in retaining staff in the public sector, as this sector is not always the employer of choice for individuals motivated primarily by extrinsic factors such as renumeration and benefits.^[5]

Research indicates that the private sector generally offers stronger extrinsic incentives than the public or non-profit sectors. Studies most commonly discuss salary differentials, with non-profit salaries typically lower than public and private sector salaries, and public sector salaries lower than private sector salaries.^[5]

Employee perceptions of organisations are a significant factor in determining employment choices. Research has shown that many employees choose career paths that align with their values and intrinsic motivations non-monetary opportunities, such as meaningful work, are frequently cited as drawing individuals to public sector organisations, regardless of occupation.^[5]

The adoption of employee friendly policies is crucial for public sector organisations to address issues such as employee turnover. Such policies are considered by researchers to be a means of increasing the retention and selection of talented workers or increasing the productivity of employees.^[6] Research has linked employee-friendly policies to outcomes such as increased gender diverse workforce^[7], decreased absenteeism, improved staff morale, increased motivation, and higher job satisfaction.^[6]

These policies help public sector organisations respond to changing family demographics and support the growing desire for employees to have a work–life balance. Since the 1960s societal changes include the increase in single-parent households, females in the workforce and two-earner families.^[7][6] There is also the emergence of the "sandwich generation"—middle-aged adults who care for both their ageing parents and their own children.

Research shows that if combining work and family is problematic, people function less effectively at work and face increased risk of health problems, which consequently threaten the quality of organisations.^[6][8]

Examples of employee-friendly policies are flexible work arrangements, such as part-time work and working from home; leave arrangements such as parental, paternity, and emergency leave; care arrangements for dependent children and adults, including financial support, referral services, and domestic services; and supportive policies, such as training and counselling programs.^[6]

Employees combining work and personal life generally need a combination of support activity, depending on their life stage. For employees with young children, childcare support is as important as the possibility to take up parental leave and having flexible working hours. For those with care responsibilities such as caring for seriously ill or elderly relatives, care leave or temporary reduction of working hours may be more important.^[6]

Cost of turnover

Studies have shown that cost related to directly replacing an employee can be as high as 50–60% of the employee's annual salary, but the total cost of turnover can reach as high as 90–200% of the employee's annual salary.^[9] These costs include candidate views, new hire training, the internal recruiter's salary, the costs to retain a 3rd party recruiter, separation processing, job errors, lost sales, reduced morale and a number of other costs to the organization. Turnover also affects organizational performance. High-turnover industries such as retailing, food services, call centres, elder-care nurses, and salespeople make up almost a quarter of the United States population. Replacing workers in these industries is less expensive than in other, more stable, employment fields but costs can still reach over $500 per employee.^[10] As of November 2022, Gallup found that 49% of U.S. employees were watching for or actively seeking a new job.^[11]

Theory

An alternative motivation theory to Maslow's hierarchy of needs is the motivator-hygiene (Herzberg's) theory. While Maslow's hierarchy implies the addition or removal of the same need stimuli will enhance or detract from the employee's satisfaction, Herzberg's findings indicate that factors garnering job satisfaction are separate from factors leading to poor job satisfaction and employee turnover. Herzberg's system of needs is segmented into motivators and hygiene factors. Hygiene factors include expected conditions that if missing will create dissatisfaction. Examples of hygiene factors include bathrooms, lighting, and the appropriate tools for a given job. Employers must utilize positive reinforcement methods while maintaining expected hygiene factors to maximize employee satisfaction and retention.^[12]

Retention programs

It is important to first pinpoint the root cause of the retention issue before implementing a program to address it. Once identified, a program can be tailored to meet the unique needs of the organization. A variety of programs exist to help increase employee retention.^[13]

Orientation and onboarding – An employee's perception of an organization takes shape during the first several days on the job and continues throughout their first six months, with 90% of employees still deciding whether or not to stay in the organization during this time.^[14] It is in the best interest of both the employee and the organization to impart knowledge about the company quickly and effectively to integrate the new employee into the workforce. In addition, providing continual reinforced learning through extended onboarding over the first year can increase new hire retention by 25%.^[15] By implementing an effective onboarding process, new hire turnover rates will decrease and productivity will increase.^[16]

Women's retention programs – Programs such as mentoring, leadership development and networking that are geared specifically toward women can help retain top talent and decrease turnover costs. There are many Diversity, Equity, and Inclusion^[17] efforts that can contribute significantly to retaining women employees. By implementing programs to improve work/life balance, employees can be more engaged and productive while at work.^[18]

Employee recognition programs - Some of the biggest reasons for employee turnover are results of toxic company culture and not feeling engaged or recognized for their work. Companies have now started investing billions of dollars each year into bonus and employee perks programs. Forbes found in 2019 that companies that scored in the top 20% for building a 'recognition-rich culture' had 31% lower voluntary turnover rates.^[19]

Mental health support programs - Mental health support programs form the cornerstone of employee well-being strategies. These programs typically offer access to mental health professionals, counseling services, and other resources aimed at maintaining and improving employees' mental health. For instance, companies like Google and Microsoft have implemented comprehensive Employee Assistance Programs (EAPs) that provide free access to therapists and proactive outreach initiatives encouraging employees to seek help when needed. According to the World Health Organization (WHO),^[20] for every dollar invested in mental health programs, there is a return of four dollars in improved health and productivity. These programs are particularly effective in high-stress industries such as finance, healthcare, and IT, where the risk of burnout and absenteeism is elevated.

Flexible work arrangements - According to research from the Harvard Business Review,^[21] flexible working conditions can reduce turnover by as much as 50% in some industries. By providing such arrangements, organizations signal their commitment to supporting the holistic well-being of their workforce, fostering loyalty and decreasing the likelihood of voluntary turnover.

Stress management and mindfulness programs - Stress is a common factor in employee dissatisfaction, absenteeism, and high turnover. Mindfulness programs, which often include meditation, yoga, and cognitive-behavioral strategies, help employees develop resilience to workplace stressors. IBM^[22] has incorporated mindfulness training into its well-being program, offering weekly sessions that have improved both mental clarity and employee engagement. This integration has led to a measurable reduction in stress-related absenteeism and a higher retention rate among participants. Similarly, Deloitte's^[23] focus on mindfulness and mental health initiatives has resulted in a 30% increase in employee retention, according to internal reviews. These programs promote a culture of openness and destigmatize conversations about mental health, encouraging employees to seek help and engage in practices that reduce stress, thereby enhancing their overall work experience and loyalty to the organization.

Flexible work arrangements

Flexible work arrangements (FWAs) can improve employee turnover within organizations. Both public and private sectors in countries around the world have widely adopted FWAs. These arrangements involve adapting an organization's work system to become more flexible, which may include adjusting how tasks are distributed among employees or allowing staff to set their own working hours and location.

In fact, the concept of FWAs existed before the COVID-19 pandemic. However, the trend of using FWAs in both public and private sectors globally surged during the pandemic. According to a 2023 OECD report, almost all public sector organizations in OECD countries implemented flexible working arrangements, at least in the form of part-time work and flextime. Additionally, it is expected that more countries will increasingly adopt FWAs in the future.^[24]

Types of FWAs

Flexible work arrangements can be categorized into two main types;^[25]

1. Flextime (or flexitime) – Increasing flexibility in working hours, such as: Fully-flextime working, Part-time working, Compressed working week and Trust-based working hours.
2. Flexplace – Increasing flexibility in work location, such as:
   • Telecommuting: Employees work from home or another location outside of the traditional office, using technology to communicate and collaborate.
   • Remote work: Similar to telecommuting, but it often refers to a fully remote arrangement where employees never need to come to the office and work entirely from an off-site location.^[26]

Flexible work arrangements also include other models such as;^[27]

• Hybrid work: A work model where some employees work from the office while others work remotely, blending both in-office and remote work to create flexibility.
• Job sharing: A practice where two or more employees share the responsibilities of one full-time job, distributing tasks among them based on their availability.

Impact of FWAs on employee retention

FWAs were found to have a positive impact on employee retention and also organizational productivity in a study.^[28] The implementation of FWAs, regardless of the type, benefits employees in two key aspects:

1. Autonomy: FWAs increase flexibility in when, where, and sometimes how employees work. For example, employees may work during nighttime instead of core hours, or choose to work from home rather than the office. This increased autonomy gives employees greater independence in managing, controlling, and making decisions about their tasks, with less oversight from supervisors. As a result, employees with higher autonomy tend to value their jobs more, experience greater happiness and job satisfaction, and are more likely to stay with their employer.^[29]
2. Work-life balance: Employees who work under FWAs are able to achieve greater work-life balance satisfaction due to the benefits gained from FWAs and increased autonomy. For example, FWAs such as working from home can reduce job-related expenses, like transportation costs, making employment more financially sustainable. FWAs like flextime also allow employees to allocate more time to their families or engage in relaxing activities. As a result, employees are less likely to experience stress and burnout—key factors that contribute to turnover. The increased autonomy and improved work-life balance help employees feel more valued and supported by their employers, ultimately reducing turnover.^[30]

Factors and limitations affecting the effectiveness of FWAs in employee retention

FWAs are not a one-size-fits-all solution. The success of implementing FWAs to retain employees can be influenced by various factors and limitations, particularly in the public sector. This includes job characteristics, organizational capacity and resources, and supportive national policies.^[31] For instance, the public sector may be unable to legally implement FWAs due to a lack of statutory support from the government. Certain roles, such as service officers or technicians, may not be suitable for FWAs, and some organizations or employees may struggle with remote work due to a lack of appropriate tools like computers or reliable internet access.

Moreover, FWAs can sometimes negatively impact employee retention.^[32] Issues such as stress and work-life conflict from unclear working hours, isolation due to a lack of physical interaction in remote work, health problems caused by compressed workweeks, or reduced engagement and productivity due to inadequate work tools can all arise. Therefore, organizations must carefully assess their circumstances, goals, the need of employees, and workforce structure to determine which types of FWAs are best suited to achieving both performance improvements and employee retention.

Impact of remote and hybrid work on employee retention

The widespread adoption of remote and hybrid work models since the COVID-19 pandemic has reshaped how organizations attract and retain employees.^[33]While flexible work arrangements (FWAs) have long included practices such as flextime or part-time schedules, remote and hybrid work differ by allowing employees to perform their duties primarily or partly outside the traditional office.^[34] Recent research shows that these specific models can significantly influence employee turnover, providing both benefits and challenges for public and private sector employers.

A growing body of evidence links remote and hybrid work to improved retention rates. A large-scale field experiment by Bloom, Han, and Liang (2024) found that employees offered a hybrid schedule—three days in the office and two days at home—were 35 percent less likely to quit over a two-year period than those required to work on-site full-time.^[35] These findings indicate that providing autonomy in work location can be a strong predictor of retention across industries.

Remote and hybrid arrangements enhance retention primarily through two mechanisms: autonomy and work–life balance. Autonomy allows employees greater control over when and where they work, fostering job satisfaction and reducing turnover intentions.^[36] Employees often use the flexibility to tailor their schedules around family commitments, educational pursuits, or personal health needs. Improved work–life balance also lowers stress and burnout, both key factors in voluntary departures. Surveys conducted in New Zealand and the United States during 2023–2024 show that employees who spend at least part of the week working from home report higher overall life satisfaction and are more likely to remain with their current employer for the next twelve months.^[37][38]

Public sector organizations have also recognized these benefits. According to an Organisation for Economic Co-operation and Development (OECD) survey, nearly all member-state governments implemented some form of remote or hybrid work during the pandemic and have retained elements of these policies to aid recruitment and retention.^[39] Hybrid arrangements can be especially valuable in regions where competition for skilled professionals is high, but relocation incentives are limited.

Policy guidance and oversight in public sector use

New Zealand provides a recent example of how governments are shaping remote-work practices to balance flexibility with organizational goals. In September 2024 the New Zealand Government issued updated guidance for public service agencies stating that working from home "is not an entitlement" and must be mutually agreed between employer and employee.^[40]The guidance requires that remote arrangements "must not compromise employee performance or the objectives of the agency," and directs agencies to monitor and report the number and type of agreements to the Public Service Commission, which will publish the data for transparency.^[40] It also highlights the importance of face-to-face interaction for mentoring, skills transfer, and collegial relationships, noting that excessive remote work may weaken retention if employees feel disconnected from colleagues.^[40]

Despite these advantages, the impact of remote and hybrid work on retention is not uniformly positive. Several studies caution that extended remote work can contribute to social isolation, reduced informal learning, and "proximity bias," where managers favor in-office staff for promotions and high-visibility projects.^[41] These dynamics may undermine long-term engagement if employees perceive fewer career-development opportunities. Additionally, organizations must invest in digital infrastructure, cybersecurity, and new management practices to maintain performance and cohesion among dispersed teams.

Equity considerations further complicate retention outcomes. Hybrid policies can inadvertently favor employees with suitable home office environments and high-speed internet, while disadvantaging those in small or shared living spaces. Research also shows gendered effects: hybrid work can help retain women with caregiving responsibilities, yet some women report slower advancement when working remotely more frequently than male colleagues.^[42]

To maximize the retention advantages of remote and hybrid models, experts recommend clear performance metrics, regular virtual check-ins, and intentional efforts to maintain organizational culture. McKinsey research emphasizes that firms with explicit hybrid norms—such as defined collaboration days and transparent promotion criteria—report lower turnover than those with ad hoc or ambiguous policies.^[43] Training managers to lead distributed teams and ensuring equal access to professional development opportunities are also key retention strategies.

Overall, remote and hybrid work arrangements have become an enduring feature of modern employment and a significant factor in employee retention. Evidence from multiple countries and sectors demonstrates that, when well designed and equitably implemented, these models can reduce voluntary turnover while supporting employee satisfaction and productivity. Yet their success depends on proactive organizational policies that balance flexibility with connection, fairness, and opportunities for growth.

Retention tools and resources

• Employee surveys – By surveying employees, organizations can gain insight into the motivation, engagement and satisfaction of their employees. It is important for organizations to understand the perspective of the employee in order to create programs targeting any particular issues that may impact employee retention.
• Exit interviews – By including exit interviews in the process of employee separation, organizations can gain valuable insight into the workplace experience. Exit interviews allow the organization to understand the triggers of the employee's desire to leave as well as the aspects of their work that they enjoyed. The organization can then use this information to make necessary changes to their company to retain top talent. Exit interviews must, however, ask the right questions and elicit honest responses from separating employees to be effective.
• Employee retention consultants – An employee retention consultant can assist organizations in the process of retaining top employees. Consultants can provide expertise on how to best identify the issues within an organization that are related to turnover. Once identified, a consultant can suggest programs or organizational changes to address these issues and may also assist in the implementation of these programs or changes.^[44]

Join, stay, leave model

Retention in the public sector

Employee retention in the public sector reflects a distinct set of motivations and challenges compared to private organizations. While many employees are drawn by public service values and job security, others face constraints such as limited advancement and political pressures. Using the Join–Stay–Leave model, this section explores why individuals choose to enter, remain in, or exit public sector roles across different global contexts.

Why employees join – The attractiveness of the position is usually what entices employees to join an organization. However, recruiting candidates is only half the problem while retaining employees is another. Understanding what one's employees are looking for in the job while simultaneously making sure one's expectations are correct are both important factors to address in the hiring process.^[45] High performing employees are more likely to be retained when they are given realistic job previews. Organizations that attempt to oversell the position or company are only contributing to their own detriment when employees experience a discord between the position and what they were initially told. To assess and maintain retention, employers should mitigate any immediate conflicts of misunderstanding in order to prolong the employee's longevity with the organization. New-hire surveys can help to identify the breakdowns in trust that occur early on when employees decide that the job was not necessarily what they envisioned.^[46]

Why employees join the public sector

Many individuals are drawn to public sector employment due to Public Service Motivation (PSM)—a desire to contribute to society, uphold civic values, and pursue meaningful work.^[47] Unlike private sector roles often centred around profit, public roles are associated with social impact, equity, and long-term service. Job security, stable benefits, and structured career pathways are also major attractions, particularly in uncertain economic environments.^[48] Recent studies show that younger professionals also seek meaningful work that aligns with their values, particularly in nonprofit and governmental settings.^[49] Entry pathways such as internships, graduate programs, and competitive civil service exams further institutionalize recruitment across many countries.^[48] Overall, the decision to join the public sector reflects a blend of idealism and practical incentives.

Why employees stay – Understanding why employees stay with an organization is equally as important to understanding why employees choose to leave. Recent studies have suggested that as employees participate in their professional and community life, they develop a web of connections and relationships. These relationships prompt employees to become more embedded in their jobs and by leaving a job; this would sever or rearrange these social networks. The more embedded employees are in an organization, the more they are likely to stay.^[50] Additionally, the extent to which employees experience fit between themselves at their job, the lesser chance they will search elsewhere. Organizations can ascertain why employees stay by conducting stay interviews with top performers. A stay survey can help to take the pulse of an organization's current work environment and its impact on their high performing employees. Employers that are concerned with over-using stay interviews can achieve the same result by favoring an ongoing dialogue with employees and asking them critical questions pertaining to why they stay and what their goals are.^[2]

Why employees stay in the public sector

Retention in the public sector is often explained through job embeddedness theory, which emphasizes employees' connections to their coworkers, community, and organizational mission. These ties make leaving more costly, both socially and professionally, and encourage long-term commitment.^[51] Public servants who feel embedded within their workplace culture and community networks are more likely to remain even when alternative job opportunities exist.^[52] Another important factor is perceived fairness and ethical leadership. When leaders demonstrate integrity, fairness, and transparency, employees report stronger affective commitment to their organization, which significantly reduces turnover intentions.^[53] This effect is particularly pronounced in public healthcare systems, where supportive leadership and ethical workplace culture are crucial for staff retention.^[52] Internal development opportunities also play a key role. Governments that invest in employee upskilling, career mobility, and recognition programs tend to experience higher retention rates. These initiatives not only enhance professional competence but also strengthen employees' sense of purpose and belonging. Finally, managerial support and voice mechanisms provide psychological safety that encourages employees to remain. Public employees who feel heard in decision-making and who receive constructive feedback are less likely to disengage or seek alternatives.^[53] Collectively, these factors demonstrate that retention is shaped more by organizational culture and relational support than by financial incentives alone.

Why employees leave – By understanding the reasons behind why employees leave, organizations can better cater to their existing workforce and influence these decisions in the future. Oftentimes, it is low satisfaction and commitment that initiates the withdrawal process, which includes thoughts of quitting in search of more attractive alternatives. If administered correctly, exit interviews can provide a great resource to why employees leave. Typically, employees are stock in their responses because they fear being reprimanded or jeopardizing any potential future reference.^[46] The most common reasons for why employees leave are better pay, better hours and better opportunity. These typical answers for leaving, often signal a much deeper issue that employers should investigate further into. By asking relevant questions and perhaps utilizing a neutral third party provider to conduct the interview, employers can obtain more accurate and quantifiable data. Contrary to what most organizations believe, employees often leave due to poor relationships with management and treatment of employees, and not because of compensation, as this is often a response that employees are uncomfortable expressing to their organization directly.^[46] Retention Diagnostic is a rapid benchmarking process that identifies the costs and can help uncover what affects employee loyalty, performance and engagement.^[54]

Why public employees leave the public sector

Voluntary turnover in the public sector is frequently linked to limited career growth and recognition. In hierarchical bureaucracies, promotion opportunities are often slow or opaque, leading employees to seek advancement elsewhere.^[55] This lack of mobility undermines long-term commitment even among highly motivated staff. Burnout and stress also play a central role, particularly in the aftermath of COVID-19. Frontline workers in health, education, and emergency services reported increased workloads, resource shortages, and emotional exhaustion, contributing to higher resignation rates. The Work Institute's 2022 retention data shows that public sector exits rose significantly during this period, with stress and work–life imbalance cited more frequently than pay concerns.^[56]Another factor is the politicization of work environments, where favouritism, political interference, or lack of merit-based systems weaken employee morale. In Zambia, research found that politicized HR decisions and perceptions of unfairness were among the top reasons civil servants voluntarily left their roles.^[55] In addition, poor leadership and negative organizational cultures are consistently identified as stronger drivers of exit than compensation. Employees who feel unsupported, excluded from decision-making, or subjected to disrespect are more likely to disengage and leave.^[57] Taken together, these findings indicate that turnover in the public sector is shaped less by salary gaps and more by structural, cultural, and political barriers.

Global and policy perspectives

Retention patterns in the public sector vary significantly across national contexts, reflecting differences in institutional design and labor markets. In OECD countries, governments are introducing reforms such as competency-based career frameworks, greater transparency in promotions, and flexible work arrangements to address attrition.^[48] In the Netherlands, healthcare retention strategies emphasize supportive leadership and workplace culture, while in Zambia, turnover remains closely tied to politicized HR practices.^[53][55]These comparisons highlight that sustainable retention requires policies tailored to local conditions as well as global best practices.

Best practices

Recruitment – Presenting applicants with realistic job previews during the recruitment process have a positive effect on retaining new hires. Employers that are transparent about the positive and negative aspects of the job, as well as the challenges and expectations are positioning themselves to recruit and retain stronger candidates.^[2]

Selection – Life experiences associated with employees may include tenure on previous jobs, education experiences, and involvement and leadership in related work experiences.^[2]

Socialization – Socialization practices delivered via a strategic onboarding and assimilation program can help new employees become embedded in the company and thus more likely to stay. Research has shown that socialization practices can help new hires become embedded in the company and thus more likely to stay. These practices include shared and individualized learning experiences, activities that allow people to get to know one another. Such practices may include providing employees with a role model, mentor or trainer or providing timely and adequate feedback.^[2]

Training and development – Providing ample training and development opportunities can discourage turnover by keeping employees satisfied and well-positioned for future growth opportunities. In fact, dissatisfaction with potential career development is one of the top three reasons employees (35%) often feel inclined to look elsewhere. if employees are not given opportunities to continually update their skills, they are more likely to leave. Those who receive more training are less likely to quit than those who receive little or no training. Employers that fear providing training will make their employees more marketable and thus increase turnover can offer job specific training, which is less transferable to other contexts. Additionally, employers can increase retention through development opportunities such as allowing employees to further their education and reimbursing tuition for employees who remain with the company for a specified amount of time.^[2]

Effective leaders – An employee's relationship with his/her immediately ranking supervisor or manager is equally important to keeping to making an employee feel embedded and valued within the organization. Supervisors need to know how to motivate their employees and reduce cost while building loyalty in their key people. Managers need to reinforce employee productivity and open communication, to coach employees and provide meaningful feedback and inspire employees to work as an effective team.^[58] In order to achieve this, organizations need to prepare managers and supervisors to lead and develop effective relationships with their subordinates. Executive Coaching can help increase an individual's effectiveness as a leader as well as boast a climate of learning, trust and teamwork in an organization. to encourage supervisors to focus on retention among their teams, organizations can incorporate a retention metric into their organization's evaluation.

Employee engagement – Employees who are satisfied with their jobs, enjoy their work and the organization, believe their job to be more important, take pride in the company and feel their contributions are impactful are five times less likely to quit than employees who were not engaged.^[59] Engaged employees give their companies crucial competitive advantages, including higher productivity and lower employee turnover.

Employee benefits - Benefits are a critical piece of the equation in retaining employees. Employees are looking for benefits that span more than the core basics. With a robust rewards and benefits package and an effective benefits communication plan, employee engagement and retention can improve. Nurturing employees' understanding of the total value of their benefits package and how to strategically use it will enhance their experience and total well-being.^[60]

Public sector perspectives on best practices

While recruitment, selection, socialisation, training, leadership, engagement and benefits are widely recognised retention strategies, their application in the public sector has distinctive features. Public organisations often face structural constraints, including limited pay flexibility, strict accountability requirements and political oversight, which influence the design and effectiveness of retention practices. Research has shown that public employees are frequently motivated by factors beyond financial incentives, a concept known as public service motivation (PSM). PSM refers to the intrinsic desire to contribute to society, deliver public value and serve citizens, and it is consistently linked to higher organisational commitment and lower turnover intentions in government contexts.^[61]

Best practices for employee retention in the public sector do reflect many of the same principles found in the private sector such as transparent recruitment, effective onboarding, development opportunities, strong leadership and comprehensive benefits; however, they are also shaped by the distinctive motivations and constraints of government work. Incorporating PSM into recruitment and engagement strategies, addressing presenteeism and absenteeism, and prioritising employee wellbeing are increasingly recognised as essential for sustaining a committed and effective public workforce.

However, the effectiveness of these principles often depends on an employee's motivation for public service or for the work in which they are engaged. While many individuals are attracted to government roles because of a commitment to serving the public, others may be drawn by perceived job security or limited alternatives. In such cases, employees may respond more strongly to practices common in the private sector than to those emphasising public service values. For this reason, public sector employers are encouraged to balance the opportunities created by PSM with safeguards that prevent over-reliance on employees' intrinsic commitment, ensuring that retention strategies respect both professional aspirations as well as personal wellbeing.

Recruitment in the public sector – Recruitment in the public sector not only requires transparent communication about job responsibilities, but also the explicit highlighting of the social impact of public roles. Evidence suggests that emphasising mission-driven work in realistic job previews can strengthen alignment between applicant values and organisational goals, thereby improving long-term retention.^[62] This differs from private sector recruitment, where emphasis is often placed on career progression or financial rewards.

Selection processes in the public sector – Government agencies frequently prioritise merit-based assessment and formal qualifications. However, researchers argue that incorporating indicators of PSM and civic values into assessment tools may improve retention outcomes by ensuring stronger alignment between employee motivations and organisational missions.^[63] This approach complements traditional competency-based selection methods while recognising the unique motivational drivers of public servants.

Socialisation in the public sector – Socialisation and onboarding in public agencies also require adaptation. Strategic induction programmes that foster a sense of public purpose and reinforce ethical standards have been found to embed employees more effectively. Mentorship programmes are particularly important in the public sector, where hierarchical structures and complex rules can otherwise leave new employees disengaged. These practices mirror private sector onboarding approaches but place greater emphasis on reinforcing public values and accountability standards.^[64]

Training and development in the public sector – Training and development opportunities are vital retention mechanisms across all sectors, but their significance is magnified in government organisations, where career mobility can be constrained by rigid pay structures. Public servants who perceive strong opportunities for professional development report higher engagement and are less likely to exit.^[65] In addition, providing education in areas such as policy analysis, ethics and public engagement supports both individual growth and organisational capacity. However, concerns remain regarding the transferability of publicly funded training to other organisations. Agencies often address this by linking development benefits to retention agreements, such as tuition reimbursement tied to a minimum service period.

Effective leaders in the public sector – Effective leadership remains central to employee retention in government. Studies show that employees' relationships with supervisors strongly influence retention, particularly in contexts of high workload and political pressure.^[66] Leadership development in the public sector increasingly focuses on coaching approaches, inclusive management and fostering trust, which are considered best practice for reducing voluntary turnover. Furthermore, governments have experimented with incorporating retention-related metrics into management evaluations to encourage leaders to focus explicitly on workforce stability.

Employee engagement in the public sector – Employee engagement strategies in the public sector differ from the private sector in important ways. For example, while private organisations may focus on performance incentives, public employers can enhance engagement by emphasising the societal importance of the employees' work. Employees who view their role as socially meaningful are more likely to remain in their positions, even in the absence of high financial rewards.^[67] In this sense, engagement strategies rooted in public service values can act as powerful retention tools.

Presenteeism and absenteeism in the public sector – A significant challenge for public employers is managing presenteeism and absenteeism. High levels of PSM can, paradoxically, lead to presenteeism, where employees attend work despite illness due to a sense of duty.^[68] While this may initially appear to enhance organisational commitment, presenteeism has been linked to lower productivity, health deterioration and eventual burnout, all of which undermine retention in the long term. Conversely, workplace stress, bullying or lack of engagement can drive absenteeism, another factor correlated with turnover.^[62] Best practice in this area involves balancing encouragement of public service commitment with safeguards for employee wellbeing, including flexible work arrangements, proactive health management and policies that discourage unhealthy work patterns.

Employee benefits in the public sector – Employee benefits in the public sector often extend beyond financial rewards to include job security, pension schemes and work–life balance provisions. These benefits are particularly valued by public servants and contribute strongly to retention.^[69] However, recent studies suggest that benefits alone are insufficient if employees feel overburdened or unsupported. Accordingly, public agencies are adopting a more holistic approach to wellbeing, integrating mental health resources, bullying prevention strategies and family-friendly policies into their retention frameworks.^[70]

Outsourcing employee retention program

Turnover costs can have significant negative impact on a company's performance. Turnover cost can represent more than 12 percent of pre-tax income for the average company and nearly 40 percent for companies at the 75th percentile for turnover rate.^[71]

Technological advancements in retention strategies

Recent technological advancements have significantly transformed employee retention strategies, enabling organizations to adopt more sophisticated and data-driven approaches.

One of the most impactful technologies in this area is Artificial Intelligence (AI), which has revolutionized how companies understand and address employee turnover. AI tools analyze extensive datasets, such as employee performance metrics, feedback, and engagement levels, to identify patterns that may indicate potential turnover.^[72] By applying machine learning algorithms, these systems can predict which employees are at risk of leaving and suggest interventions to enhance their job satisfaction and engagement.^[73] This predictive capability allows HR professionals to proactively address issues, such as career development needs and workplace culture improvements, thereby reducing turnover rates and retaining top talent.

Human resource analytics, which includes the methodical collecting and analysis of employee data and human resource metrics to enhance retention-related decision-making processes, complements AI's impact on retention strategies. Organizations can identify the root causes of employee attrition by using HR analytics, which offers a holistic perspective of workforce dynamics. By addressing issues identified through data analysis, such as inadequate career advancement opportunities or non-competitive compensation packages, organizations can enhance employee satisfaction and commitment.^[74] Furthermore, HR analytics supports the personalization of employee experiences, allowing companies to tailor development programs, benefits, and recognition systems to individual preferences, thereby fostering a more engaging and supportive work environment.^[75]

Digital platforms and mobile applications have also become integral to modern retention strategies, facilitating real-time communication and feedback between employees and management. These platforms often incorporate gamification elements to enhance motivation and participation. Gamification is the process of turning ordinary tasks into interesting challenges by including elements from games, like leaderboards, badges, and points. This increases employee happiness and involvement.^[76] This approach contributes to a positive organizational culture by making employees feel valued and heard. Moreover, digital platforms provide a channel for employees to voice their concerns and suggestions, fostering an environment of trust and transparency.^[77]

New technologies like augmented reality (AR) and virtual reality (VR) are being investigated to improve staff development programs, which are essential parts of retention tactics. With the use of these immersive technologies, training sessions may be effectively and engagingly delivered, enhancing both skill acquisition and job satisfaction. With the use of VR and AR, workers may practice and learn new skills in a risk-free environment by simulating real-world circumstances.^[78]

Diversity and inclusion

Diversity, equity, and inclusion (DEI) initiatives are designed to promote equity, combat discrimination, and provide support for diverse employee needs. Research conducted by Ashikali and Groeneveld in 2015 established that the positive effect of diversity management on employee commitment is often mediated by the inclusiveness of the organizational culture and the role of transformational leadership.^[79] Supervisors who promote inclusion are crucial in the effective implementation of these initiatives, enhancing employee attachment and reducing turnover. Trochmann, Stewart, and Ragusa (2023) found that positive perceptions of diversity and inclusion were significantly associated with higher levels of job satisfaction and overall workplace happiness in racially diverse agencies. This demonstrates that public organizations can improve retention by cultivating environments where diversity is positively affirmed and acknowledged.^[80] Brimhall, Lizano, and Barak (2014) emphasized that a positive diversity climate reduces employees' intention to leave by fostering a sense of inclusion and job satisfaction.^[81] This effect is particularly notable in child welfare services, where diverse employees felt more valued when inclusive practices were present, which, in turn, reduced turnover rates.^{[citation needed]}

Challenges of diversity initiatives

Diversity initiatives could unintentionally alienate traditionally advantaged groups, who may perceive these programs as unfair or believe that they disadvantage them in hiring and promotion.^[82] These perceptions can lead to internal conflicts and negatively affect the overall inclusiveness of the workplace, ultimately reducing the effectiveness of retention efforts. Another challenge lies in the implementation of childcare programs as part of diversity initiatives. Chordiya (2018) found that, although these programs aimed to support diverse employees, they were not equally effective across genders. For instance, female employees benefited more from inclusive organizational practices combined with childcare support than from childcare support alone.^[83]

Ritz and Alfes (2018) showed that in multilingual public administrations, employees' attachment to their jobs increased when their supervisors actively supported diversity and fostered an inclusive environment.^[84] Choi and Rainey (2014) highlighted the importance of leadership in promoting perceived organizational fairness, which positively correlates with job satisfaction and retention rates.^[85]

Executive Musical Chairs (turnover): The True Cost of Sales Leadership Turnover

The reality of turnover is impacted severely by 'leaders’ rapid transitions between companies, typically every 18–24 months, leaving behind restructured territories, discarded strategies, and most critically, a wake of alienated prospects wondering why their strategic initiatives have stalled yet again. While LinkedIn profiles showcase impressive figures and marquee accounts, industry veterans know the deeper story.^[86]

These rapid transitions, often marketed as “exciting new opportunities” or “strategic career moves," frequently mask a more uncomfortable truth: pipeline issues and missed quotas that become apparent just as the sales leader begins plotting their next move.^[86]

Consider a typical enterprise sales cycle for a joint MSP/VMS initiative: A prospect with $60M in annual spend translates to a $180M three-year contract, generating approximately $5.4M in fee revenue at 3%. For deals of this magnitude, the timeline typically spans:^[86]

• 12–18 months: Business Development — initial contact to contract signature
• 3–6 months: Implementation to Go-Live
• 1 month: First billing cycle
• 1 month: First invoice payment = Average 24 months or more before fee revenue begins

The 24-Month Cycle

The pattern of sales executive turnover follows a remarkably consistent timeline. Wholesale changes to compensation plans and territory alignments characterize the first six months (the honeymoon period). New sales leaders embark on carefully orchestrated customer visits, present bold new go-to-market strategies, and implement high-profile but often superficial changes to CRM systems and sales processes. This period typically sees the arrival of trusted sales managers from previous companies and the quiet exodus of successful incumbent salespeople.^[86]

Reality begins as the calendar turns to months seven through twelve. This period marks the transition from promises to quota attainment, and a predictable set of behaviours follows. Sales executives discover “market challenges” (political elections) and “inherited pipeline issues” (the prior regime), revise initial forecasts, and shift metrics to focus on “leading indicators” over actual bookings. The narrative inevitably shifts to emphasise how “sales transformation takes time” and highlights competitive pressures over specific execution challenges.^[86]

Warning signs and exit patterns

Between months thirteen and eighteen, the warning signs become impossible to ignore. External networking increases, internal sales meetings decrease, and performance reporting becomes increasingly selective. The executive’s presence in the field diminishes, replaced by mysterious absences and careful documentation of “strategic accounts in progress.” By months nineteen through twenty-four, the exit strategy is in full swing, with quiet negotiations with potential employers and careful curation of the transition narrative. The cycle repeats itself — Executive Musical Chairs.^[86]

The human element: beyond numbers

Leadership character traits

The most overlooked aspect of sales leadership success lies not in strategies or systems but in the fundamental character of the leader and the cultural tone they set. While the sales profession often attracts and celebrates bold personalities, sustainable success requires a more nuanced approach that balances confidence with humility. The most effective sales leaders understand that arrogance, even when backed by impressive results, ultimately erodes team dynamics, customer relationships, and can severely damage the market perception of their brand.^[86]

Building authentic relationships

Success in sales leadership demands emotional intelligence that extends far beyond closing deals. Authentic relationship building, both internally and externally, requires genuine curiosity and empathy rather than transactional engagement. The best leaders recognise that authentic relationships are a buffer during inevitable challenges — whether those are missed quarters, product issues, or the all-too-familiar implementation hurdles. Building on transparency and mutual respect rather than charm or authority, these relationships become crucial when things go wrong (as they invariably do in complex sales environments).^[86]

Breaking the stereotype

While sometimes grounded in reality, the stereotype of the narcissistic sales leader obscures a more complex truth about effective sales leadership. While strong personalities often rise to sales leadership positions, sustainable success requires the ability to sublimate ego in service of larger goals. The most effective leaders demonstrate the following:

• Humility to own and learn from failures
• Share credit for successes
• Emotional intelligence to build connections across diverse stakeholder groups
• Self-awareness to recognise and manage their behavioural impacts
• Authenticity to acknowledge mistakes and model continuous improvement
• Patience to develop long-term relationships rather than pursuing quick wins

With an increasing awareness of neurodiversity, sales organisations are beginning to recognise that different cognitive styles and personality types can bring unique strengths to sales leadership. Some leaders excel at systematic process development, others at intuitive relationship building, and others at innovative strategy formation. The key lies not in fitting a predetermined mold of the “sales personality,” but in self-awareness and leveraging one’s authentic strengths while building teams that complement areas of challenge.^[86]

Creating psychological safety

The most successful sales organisations actively work to break down the dated stereotype of the aggressive, extroverted sales leader. They recognise that sustainable success comes from leaders who:

• Build psychological safety that encourages honest forecasting and open discussion of challenges.
• Create inclusive environments that welcome diverse thinking styles and approaches.
• Focus on developing their teams rather than showcasing their capabilities.
• Maintain humility regardless of their level of success or experience.
• Demonstrate genuine care for both customer and team member success.

This shift requires careful consideration during the hiring and promotion process. Beyond examining track records and revenue achievements, organisations must evaluate a leader’s capacity for genuine relationship building, approach to failure and learning, and ability to create inclusive and psychologically safe environments. The best leaders understand that their legacy lies in the deals they close, the lasting relationships they build, and the teams they develop.^[86]

While these leadership qualities are essential, organisations must create the structural conditions that enable them to flourish. This requires fundamental changes in how companies approach sales leadership selection, development, and retention.^[86]

Breaking the cycle

The true cost of turnover

The financial impact of senior sales executive turnover is staggering, typically costing organisations 2–3 times the leader’s annual compensation package. For a VP/SVP level executive earning $400–600K, direct replacement costs alone — including search fees, onboarding, and lost productivity — range from $800K to $1.2M. The hidden costs are even more severe, often exceeding $1–2M through lost pipeline deals, team turnover fallout, damaged customer relationships, and stalled strategic initiatives. In complex enterprise sales environments, the total cost per turnover can exceed $3M, with the impact multiplying based on deal cycle length, territory size, and customer relationship depth.^[86]

Beyond these quantifiable costs, sales organisations suffer from team burnout, growing cynicism, and lost productivity at all levels. This pattern manifests subtly: “knowing looks” exchanged at sales kickoff events, careful phrasing in reference checks, and the increasing preference for promoting successful sales managers from within.^[86]

Data-driven leadership selection

The sports industry has long understood that team success depends on more than individual talent — it requires careful attention to team chemistry, cultural fit, and environmental alignment. Forward-thinking organisations now apply these same principles to sales leadership selection, leveraging decades of data-driven insights from high-performance team building. This approach moves beyond traditional metrics to examine how leaders perform within specific organisational contexts and team dynamics.^[86]

By analysing the unique aspects of their work environment and culture, companies can make more informed decisions about leadership fit. This scientific approach to talent matching considers skills, experience, and how individuals interact with their surroundings and team members. When sales leaders are aligned with their environment and feel a genuine sense of belonging, their performance often exceeds expectations, and their work takes on greater meaning and purpose.^[86]

The power of environmental alignment

Organisations that excel at retaining sales leadership talent understand that success requires more than matching skills to job descriptions and demands a deeper understanding of how leaders interact with their environment. By leveraging advanced analytics and behavioural science, companies can create more precise matches between sales leaders and their organisational culture. This approach has shown that when leaders operate in environments that align with their working style and values, they’re more likely to:

• Build lasting customer relationships
• Develop high-performing teams — “hunting in packs”
• Create sustainable sales processes
• Maintain longer tenures
• Drive consistent results

The result is a more stable sales organization where leadership tenure extends well beyond the typical 24-month cycle, creating the foundation for long-term success and predictable revenue growth.^[86]

Implementing structural change

Breaking this cycle requires fundamental changes in how organisations approach sales leadership. Companies must implement longer performance evaluation cycles, extending initial assessment periods to 30 months or more. Compensation structures must be redesigned to reward sustained customer relationships, with vesting schedules and performance triggers that encourage stability and the organisation’s long-term sustainability. Organisations should invest heavily in internal sales talent development, creating robust succession planning and leadership development programs that build long-term capability and commitment.^[86]

Board and C-suite evolution

The path forward requires a delicate balance of accountability and realism across all organisational levels. Boards and C-suites must evolve beyond the simplistic demand for forecast precision to embrace a more sophisticated understanding of sales dynamics. This means recognising that while forecasts are crucial planning tools, they represent probability-weighted snapshots rather than contractual commitments. The most effective boards will partner with sales leadership to understand pipeline velocity, deal composition, and market dynamics rather than fixating on single-point forecast numbers.^[86]

Similarly, executives must shed the protective armour of short-term thinking to embrace authentic long-term value creation. This means moving beyond the quarterly chess game of forecast negotiations to build sustainable, repeatable sales processes. Organisations that excel in this transition focus on leading indicators like pipeline health, customer engagement metrics, and sales team stability rather than lagging indicators alone. Organisations that do not will find themselves in an ongoing war of quarterly battles with their sales team, the numbers vs. a focus on strategically winning deals, and how executive leadership can help.^[86]

While the data tells a compelling story of financial impact and organisational disruption, we must confront an even more uncomfortable truth about our industry.^[86]

Building sustainable success

Companies that successfully break free from the forecast-and-flee cycle discover an unexpected competitive advantage: they become talent magnets for seasoned sales leaders who seek environments where they can build lasting success rather than manage short-term optics. These organisations typically share common traits: they maintain balanced scorecards that consider quantitative and qualitative metrics, invest in sales leadership development as a strategic priority, and view customer relationships as long-term assets rather than quarterly transactions.^[86]

The sales executive musical chairs phenomenon has persisted because it serves short-term interests while hiding long-term costs. However, in an era where customer retention and predictable revenue growth are paramount, this pattern has become an expensive luxury that organisations can no longer afford. The choice is clear: continue the comfortable charade or embrace the challenging work of real organisational change. Those who choose the latter will lead the next evolution of sales leadership; one built on stability, authenticity, and sustainable success rather than appearances and short-term theatrics.^[86]

The time has come for honest dialogue about this phenomenon. While individual organisations may feel powerless to change industry-wide patterns, collective acknowledgement and action can help reshape the culture of sales executives. The benefits of stable sales leadership include enhanced customer relationships, improved talent development, stronger institutional knowledge, and better stakeholder outcomes far outweigh the temporary discomfort of confronting this systemic issue. Organisations that tackle this challenge head-on will discover that leadership stability creates a decisive competitive advantage in an increasingly complex sales environment.^[86]