8 ways leaders can improve employee engagement and retention in 2025

An engaged workforce is a connected workforce. They show up to work motivated, loyal, and committed to organizational success.

• Yes, but: Most work environments fall short, and a disengaged workforce becomes an increasingly expensive weakness.

Why it matters: Only 21% of employees worldwide are engaged, costing the world economy $438 billion in lost productivity in 2024. With 62% of global employees not engaged and another 17% actively disengaged, it's no surprise that 50% intend to leave their current jobs. 

The link is clear. The more engaged your employees are, the longer they stay with your company. Our 2025 State of Internal Communication Report shows 63% of engaged employees are more productive, 59% are more motivated, and 54% are more satisfied in their workplace.

8 ways to improve employee engagement and retention

Let's explore some key strategies to improve employee engagement and retention in a modern organization. 

1. Build a strong, inclusive company culture

94% of workers say it's important to feel like they belong at their workplace. That sense of belonging impacts their well-being in the workplace, which then impacts employee output and job satisfaction.

Employees with a strong sense of belonging report a 56% higher level of overall job performance. Additionally, they have an organizational promoter score 167% higher than those with a low sense of belonging. Employee belonging is also associated with a more than 50% reduction in turnover risk.

⚙️ How it works: Build a strong, inclusive workplace culture that respects your employees' diverse backgrounds, identities, abilities, and perspectives. Here's how...

• Use inclusive channels: Make sure communication channels are accessible and cater to employees’ diverse needs and preferences. Encourage two-way dialogue conversations so everyone feels heard.
• Offer DEI training: Provide DEI training for all employees to raise awareness, challenge biases, and promote understanding and empathy. Cover topics like microaggressions, allyship, and cultural competence.
• Diversify hiring practices: Declare your non-discriminatory hiring practices, use diverse interview panels, and implement blind resume screening to mitigate unconscious bias.
• Stand up equitable policies: Review and revise your HR policies around compensation, promotions, performance evaluation, and benefits to identify and eliminate any potential barriers to inclusivity.
• Rep your culture: Employees want to see themselves reflected in their workplace culture. Answer to them with holiday celebrations, inclusive language in your communications, representation in leadership and employer branding.

An inclusive work environment and strong culture doesn't manifest overnight or by accident — it's the result of deliberate strategies, great leadership, and continued accountability.

2. Create a manager development program

70% of team engagement is attributable to managers, according to Gallup. Disengaged managers mean disengaged employees.

• There are bad managers out there, but it could be because most managers aren't equipped with the right mindset and skills to effectively manage their direct reporting teams.

According to Gallup’s 2025 State of the Global Workplace report, less than half of the world’s managers (44%) receive appropriate management training.

Creating a tailored manager development program will help you equip your managers with the knowledge and skills to perform their duties effectively.

•  Clarify what’s expected of them to help them feel more fulfilled in their jobs — this will boost both the managers and their reporting employees’ engagement and retention rates. 

Participants in a manager training course on best management practices experienced up to 22% higher engagement than non-participants, according to a Gallup study. The teams led by those participants saw engagement rise by up to 18%.

3. Invest in employee career growth

84% of employees feel learning adds a sense of purpose to their work, according to the 2025 LinkedIn Workplace Learning Report. This allows them to adapt and thrive in their roles, resulting in loyal and happier employees.

Between the lines: There's a significant gap between employee expectations and organizational support. Providing learning opportunities is the top retention strategy for 88% of organizations, but only 46% of employees feel supported to grow their careers at their current organization.

Close this gap by implementing structured career development initiatives beyond continuous learning opportunities, like:

• Mentorship programs: Pair employees with experienced professionals who can provide guidance, career path advice, and skill development.
• Leadership development tracks: Identify high-potential employees and offer leadership training to prepare them for managerial roles.
• Stretch assignments: Give employees opportunities to work on challenging projects that allow them to develop new skills and gain hands-on experience beyond their usual scope of responsibilities.
• Cross-functional training programs: Encourage employees to gain expertise in multiple areas through job rotation or job shadowing programs that can broaden their career prospects.

Don’t just invest in career growth initiatives to check the box on employee expectations. A Gartner survey found that organizations can have up to a 45% positive impact when they implement intentional career growth initiatives.

• That beats the 8% maximum impact the organizations will see if they only try to meet basic expectations without truly closing the gap. 

4. Build clear internal communication practices 

Clear internal communication helps employees understand what’s happening in the organization and why it matters to them so employees are better connected and committed to their roles.

📊 By the numbers: Our 2025 State of Internal Communication report shows organizations that increased their investment in internal communication saw significant growth in the employee engagement and retention metrics:

• 73% reported higher employee satisfaction and NPS scores.
• 68% experienced increased employee engagement at work.
• 72% noted a stronger organizational culture and employee morale.
• 68% reported better employee retention.

Yet, the report also revealed most organizations face a huge misalignment about the quality of communication: 

• 80% of leaders believe their messages are clear and engaging, but only 50% of employees agree.
• 51% of employees struggle to find critical information, even during routine operations.

The solution: To improve internal communication in your organization, you should:

• Choose the right channel: Consider the most effective channels to deliver different types of information. Some messages may be better suited for in-person meetings, and others emails, memos, or direct messages.
• Tailor communication: Updates should always be relevant to employees' work and responsibilities.
• Stay consistent: Clear communication is also about consistency. Deliver information when employees need it and on a predictable schedule to boost open rates.
• Embrace Smart Brevity: Axios’ Smart Brevity guidelines will help you share clearer, more engaging, and more memorable updates with your employees.

Regularly assess and refine your communication practices based on employee feedback, changing team and organizational needs, and industry trends to ensure they remain effective.

5. Prioritize employee well-being

This is a business decision. Employees who feel their best do their best and are far more likely to stick around. 

According to a Gallup Workplace study, employees with employers who care about their overall well-being are:

• 69% less likely to actively search for a new job.
• 71% less likely to report experiencing high burnout or stress levels.
• 3x more likely to be engaged at work.
• 5x more likely to strongly advocate for their company as a place to work.

Workplace well-being scores remain low, according to an employee survey by the American Psychological Association (APA). 59% of the respondents shared that their work environment is not as mentally healthy as the employer thinks. 

So, what does it truly mean to support well-being at work? 

• Mental health support: Destigmatize conversations around mental health. Provide access to therapy, employee assistance programs, and stress management trainin.
• Flexible work arrangements: Remote or hybrid work, compressed workweeks, and flexible work schedules can reduce stress and help employees establish a healthy work-life balance.
• Encouraging time off: Employees need time to recharge, so offer generous paid time off (PTO) policies and actively discourage overworking.
• Physical wellness programs: Support employee physical health by providing ergonomic workspaces and equipment, health insurance, and gym memberships.

Also, encourage team leads to recognize signs of employee burnout, have supportive conversations, and rebalance workloads when necessary.

6. Create employee recognition programs

Organizations that offer high-quality recognition typically have low turnover rates. 

Employees who get meaningful recognition are 45% less likely to leave the organization, according to research by Gallup and Workhuman.

But there’s a catch. The programs should be built on the five essential pillars of employee recognition...

1. fulfilling employees' recognition expectations
2. authentic
3. personalized
4. equitable
5. embedded in the organizations' culture

Your recognition programs can be structured around monetary and non-monetary rewards:

• Monetary: Think performance-based bonuses, stock options, gift cards, vouchers, and salary increases.
• Non-monetary: Public recognition from leadership, experiential rewards like event tickets or paid vacations, peer-to-peer recognition, and additional PTO or vacation days.

Whether you settle for a non-monetary program, a tangible rewards system, or both, make sure your awards at least fulfill some or all of the five pillars of strategic recognition. 

The result: Employees who receive recognition that fulfills just one pillar are 2.9x more likely to be engaged. Those who receive recognition that fulfills the four pillars have a 9.0x higher impact on employee engagement, which raises their chance of staying with the organization.

7. Align individual roles with the company mission

An organization’s mission and vision are among the crucial aspects employees need to feel aligned with to do their job effectively. Employees feel motivated, fulfilled, and loyal when they understand how their role contributes to the overall company mission and makes a difference.

What's at stake: Failing to communicate this connection clearly and contextually will only lead to internal misalignment. 25% of the leaders we surveyed say internal misalignment led to poor employee morale, and 23% believe it caused higher employee turnover rates.

To keep job roles aligned with your company's mission:

• Communicate the mission clearly: Make sure company values and mission are consistently communicated across all levels of the organization.
• Recognize mission-aligned contributions: Praise individual employee contributions that help achieve company goals.
• Connect roles to purpose: Reinforce the value of each role by regularly communicating the direct impact their work has both in the company and society.

One more alignment thing: Purpose-driven organizations see even better employee engagement and retention. Benevity’s Talent Retention Study reports 52% lower turnover among newer employees when they participate in purpose programs. Consider that when assigning individual employee roles and defining your company's mission.

8. Build employee advisory councils

Increase employees’ sense of purpose by taking the time to truly understand what they value personally. This makes employees 4.1 times more likely to stay with the organization. 

Creating stronger feedback loops is one way to go about it. But, shockingly, only one-third of employees believe their organization will act on their feedback. Another 46% of employees wish their organization did more to address employee feedback. 

• Most employees aren’t even sure where to share feedback. Our research found that only 46% believe their organizations provide an easy way to share regular feedback.

Bridge the gap: Opt for a more personal solution, like employee advisory councils made up of employees from different departments, levels, and backgrounds who contribute to final decisions around topics like:

• Organizational culture and values
• Workplace policies and employee benefits packages
• Employee recognition and well-being
• Career advancement opportunities
• Tools and technology

Communicate the results: Management should always share follow-through actions to the group and the wider organization to make the council most efficient. Clearly reference employee concerns or constructive feedback and the action taken in your communication.

The bottom line

The relationship between employee engagement and retention is clear. Organizations that invest in a positive company culture, leadership, internal communication, wellness programs, and career development are better positioned to keep employees engaged. Higher employee engagement levels lower turnover rates and ultimately fuel long-term success.

Go deeper: Explore why senior leaders are losing time, talent, and customers