Institutional knowledge preservation, boosted productivity, improved customer satisfaction, greater workplace stability, and reduced recruitment expenses are among the benefits of employee retention for small- to mid-sized businesses in the US. Unfortunately, too few of these businesses prioritize retention until their best talent has ditched them for their competitors or for larger companies offering better compensation and regular recognition. It’s only then that they turn to trusted thought leaders to learn how they do things differently and to encourage their workers to stay.
To find out what 118,616 618,068 opinions of small to mid-sized business leaders in the US were about employee retention, we utilized AI-driven audience profiling to synthesize insights from online discussions over 12 months, ending on May 18th, 2026, to a high statistical confidence level. The results paint a somewhat stark picture. While some businesses take retention seriously and appear to be using every tool at their disposal to improve it, others seem at a loss about what to do about their high churn rate.
JOEY HAVENS PERSPECTIVE: “There is no such thing as artificial wisdom” (Daniel Burrus). Wisdom is knowing when data is misleading, when inferences are misguided, and when data is technically correct yet fails to adequately address the complex nature of workplace culture. This data, while very valuable, has its limitations when measuring the complexity of the human workplace experiences and interactions. Human judgment is critical and remains irreplaceable as we increasingly rely on data-driven interpretations of the workplace. I will do my best in the following sections to provide additional insights and wisdom to the data-driven conclusions.
How do small to mid-sized business leaders rate employee retention as a business priority?
44% of small to mid-sized business leaders rate employee retention as a moderate priority, addressing it when issues arise, 39% prioritize it and actively work on it, and 6% say it’s critical, but 11% rate it as a low priority and not a major concern
Retention as a priority isn’t always high:
Table data for chart
| Item | Percentage |
|---|---|
| Moderate — we address it when issues arise | 44.4 |
| Important — we actively work on it | 38.5 |
| Low — it hasn’t been a major concern | 11.2 |
| Critical — it keeps me up at night | 5.9 |
Some small to mid-sized business leaders are more concerned about employee retention than others. 44% of our audience rate employee retention as a moderate business priority in their organization, explaining that they address it when issues arise. This is because their organizations have a low churn rate. A slightly smaller percentage (39%) rates it as an important priority and actively works to improve it. This indicates that their organizations have seen a large number of staff leave in recent months.
Employee retention is a low business priority for 11%, as it simply hasn’t been a major concern in their organizations. However, it’s critical for 6%, as it keeps them up at night. This tells us their organizations struggle to retain employees. Interestingly, this figure is lower than the findings published in HR.com’s State of Employee Retention report, which revealed that 24% of top leadership and 21% of line managers in retention leaders see employee retention as the top priority.
Joey Havens perspective: Overall, this data confirms what my experience has always proven to be true: Team member retention is not the primary focus for most business leaders. It is well documented that the current workplace culture is facing an epidemic of loneliness, lack of meaning and purpose, burnout, and overall record-low engagement (Gallup https://www.gallup.com/file/workplace/707798/state-of-the-global-workplace-2026-download.pdf).
When leaders are surveyed (i.e. State of Employee Retention Report) they naturally respond that it is a critical business concern and initiative, just like many people who are overweight will say, it is critical for my health to lose weight, yet their exercise and eating habits never change in a significant way. Overall, the data says, 45% of leaders are treating this as a real priority. The question remains, is it a priority behind client service, behind growth or behind profitability or is it people first as the top priority? The data and the workplace low engagement also confirms that many leaders are completely missing the mark even when they focus on retention. The group of leaders who take the position that we will address it when needed are simply fooling themselves, and being reactionary is not a promising strategy.
To what degree does company culture contribute to employee retention?
While 29% of small to mid-sized business leaders are unsure of the impact company culture has on retention, 21% agree it’s their biggest retention asset, while 28% know that their culture needs significant improvement, and 22% think it helps but isn’t the main driver
Culture is a clear retention asset:
Table data for chart
| Item | Major factor | Minor role | Some influence |
|---|---|---|---|
| Minimally — culture needs significant improvement | 26.7 | 0.5 | 1.2 |
| Somewhat — culture helps but isn’t the main driver | 10.9 | 0.3 | 9.9 |
| Strongly — culture is our biggest retention asset | 10.3 | 1.5 | 9.3 |
| Unsure — we haven’t assessed our culture’s impact | 0.0 | 0.6 | 28.6 |
Company culture is the foundational driver of employee retention. According to a SHRM report, workers in positive cultures are almost four times more likely to stay. A strong environment encourages trust and loyalty by giving employees a sense of purpose, psychological safety to voice opinions, and recognition for their contributions. Of course, the opposite is also true.
The question of company culture in retention
29% of small- to mid-sized business leaders recognize that their company culture influences employee retention, though they’re not certain by how much, as they haven’t yet assessed its impact. Less than 1% think it plays a minor role, but they also haven’t assessed its impact.
While 27% think company culture is a major factor in general, they feel theirs needs significant improvement, even if they believe it contributes minimally to employee retention, as they’re aware of other factors with greater influence. 1% feel company culture has some influence, although minimally so, and less than 1% say it plays a minor role. Again, these small to mid-sized business leaders are aware of other factors making a greater contribution to employee retention.
For 11%, company culture is a major factor influencing retention, but in their organizations, it only contributes somewhat to it. They reckon that culture helps, but it isn’t the main driver. 10% opine that the culture in their companies has some influence, contributing somewhat to employee retention. Less than 1% say culture plays a minor role, elaborating that it helps but isn’t the main driver.
In another 10% of organizations, company culture is a major factor contributing strongly, so much so that they think it’s their biggest retention asset. 9% have similar feelings, saying that it’s their biggest retention asset and that it has some influence on retention. Even though 2% recognize their company culture as their biggest retention asset, they think it plays a minor role in whether employees choose to stay or leave their organizations.
Joey Havens Perspective: This data really connects the dots, as 4 out of 5 leaders do not see culture as having a significant impact on retention, and a large percentage 29% did not have a clue how their culture might be impacting team members. Surveys on workplace culture continue to confirm that this is a blind spot for leaders who rate culture on their intentions rather than on the team members’ actual experiences. This is another reason our workplace culture continues to suffer from an epidemic of loneliness, lack of meaning, burnout, and low engagement. Leaders should measure workplace culture, establish confidential feedback loops, and focus on improving workplaces where team members can thrive.
What are small to mid-sized businesses’ annual employee turnover rates?
19% of small to mid-sized business leaders have a current annual employee turnover rate of 21-35%, 18% lose 10-20% of their workforce annually, 2% more than 35%, and 6% less than 10%, while 27% don’t really track this metric
Turnover rates fluctuate annually:
Table data for chart
| Item | Definitely the case | Not really true | Not the case at all | Somewhat true |
|---|---|---|---|---|
| 10–20% | 0.0 | 5.9 | 2.6 | 18.4 |
| 21–35% | 0.3 | 6.1 | 2.5 | 19.5 |
| I don’t track this metric | 0.0 | 20.7 | 6.4 | 0.4 |
| Less than 10% | 0.9 | 1.7 | 0.4 | 5.6 |
| More than 35% | 0.0 | 5.6 | 1.1 | 2.0 |
While less than 1% of small- to mid-sized business leaders’ current employee turnover rates are definitely between 21 and 35%, this is only somewhat true for 19%, isn’t really true for 6%, and is not the case at all for 6%. This means these latter segments’ organizations have higher or lower rates.
Less than 1% don’t formally track their employee turnover rate, although 21% do some tracking of it, and 6% do track it. 18% estimate their turnover rate is somewhere between 10 and 20%, while this isn’t really true for 6%, and is definitely not the case for 3%.
The turnover rate may be more than 35% in 2% of organizations, although this isn’t really true for 6% and isn’t the case at all for 1%. The employee turnover rate is definitely less than 10% for less than 1% of organizations, although 6% reckon this is only somewhat true for them, while 2% feel it’s not really true. Less than 1% say that a turnover rate of less than 10% is not the case at all in their organizations.
Joey Havens Perspective: What stands out to me here isn’t any single percentage — it’s the 27% who admit they don’t really track this metric. You can’t improve what you don’t measure, and in my experience, the leaders who don’t track turnover are usually the same ones who’d be most surprised by the number if they did. Untracked turnover isn’t low turnover; it’s invisible turnover, and invisible problems don’t get solved; they get inherited by whoever leads next. My experience in working with leaders for over 40 years, a large percentage of those who do measure turnover do not have the details to understand why or have the data to identify specific trends in turnover.
How long does the average employee stay with small to mid-sized businesses?
45% of small to mid-sized business leaders’ employees stay with their company an average of 3-5 years, 33% 1-3 years, and 22% of employees stay less than one year
Higher retention rates are noted:
Table data for chart
| Item | Percentage |
|---|---|
| 3–5 years | 44.6 |
| 1–3 years | 33.3 |
| Less than 1 year | 22.2 |
Almost half (45%) of the organizations represented by our audience see the average employee stay with them for three to five years. This amount of time gives employees the opportunity to learn the ropes, gain valuable experience, and potentially be promoted. 33% find that the average employee remains with them for between one and three years. These employees may aim for promotion within this period and will move to other organizations if this doesn’t happen. They may also leave due to other factors.
For 22%, the average employee stays with them for less than one year. This is an alarming finding, as it indicates there may be a serious problem in urgent need of attention, whether it be a toxic company culture, uncompetitive remuneration, or overreliance on manual processes, which add to the workload.
It’s worth noting that, according to O.C. Tanner, consistent recognition can add three and a half years to an employee’s tenure. It also can enhance employee engagement, boost productivity, strengthen company culture, and positively impact bottom lines.
Joey Havens Perspective: The 22% with average tenure under one year deserves more attention than a single line in a list. In my experience, the first 90 days set the tone for the entire relationship — if someone’s average employee doesn’t make it past year one, the problem almost never started in year one. It started in week one, in onboarding, in those first impressions of whether this is a place where people care about them or just need a body in a seat. Before chasing retention bonuses or counteroffers, I’d want to know what’s happening in those first 90 days. Overall, all of these responses tell a sad but confirming statement on the current condition of the workplace. We had no reporting of team member tenure beyond an average of five years. This is also eye-opening to me as people are starving for more meaning in their work. This lack of meaning in the US workforce is well documented in the book, TomorrowMind ( Kellerman and Seligman, January 2023).
What is the biggest reason employees leave small to mid-sized business leaders’ companies?
A lack of career growth or advancement is the reason behind 30% of small to mid-sized business leaders’ employees leaving, company culture or values misalignment leads to 27% exiting, 14% leave due to work-life balance issues, and poor management pushes out 2%
Reasons for leaving are myriad:
Table data for chart
| Item | A minor reason | A significant reason | Not a reason | The main reason |
|---|---|---|---|---|
| Company culture or values misalignment | 11.0 | 12.2 | 0.6 | 3.6 |
| Compensation and benefits | 0.5 | 0.4 | 0.0 | 0.1 |
| Lack of career growth or advancement | 12.9 | 8.5 | 20.7 | 8.9 |
| Lack of recognition or appreciation | 0.3 | 0.0 | 1.5 | 0.0 |
| Poor management or leadership | 0.5 | 2.2 | 0.4 | 0.7 |
| Work-life balance issues | 4.3 | 5.8 | 0.5 | 4.3 |
Thus far, we’ve explored illuminating insights into small to mid-sized business leaders’ opinions about company culture’s contribution to employee retention and the average employee tenure. We’ve also seen how some findings point to other factors playing a role in their organizations’ churn rates. So, what is the biggest reason people leave, according to our audience? For 9%, the main reason is a lack of career growth or advancement, while this is a significant reason for 8%, a minor reason for 13%, and not a reason for 21%.
4% believe company culture or values misalignment is the main reason, which fits in with what we saw above. However, for 12%, this is a significant reason but not the main one. 11% say culture/values misalignment is a minor reason, and less than 1% think it’s not a reason at all. The importance of company culture as a factor influencing retention cannot be downplayed. A survey by MIT Sloan Management Review found that a toxic corporate culture was the strongest predictor of attrition and 10 times more important than compensation in predicting turnover.
Leadership and compensation rank lower than work-life balance concerns
Over the past few years, many employees have become more conscious of the importance of work-life balance and expect employers to support this in healthy ways. If this doesn’t happen, some employees will look for another job. According to 4%, work-life balance issues are the main reason why employees leave their company. 6% have a similar opinion, saying this is a significant reason for employee turnover, although for 4% this is a minor reason, while it’s not a reason at all for less than 1%. Poor management or leadership is the main reason for less than 1%, although it’s a significant reason for 2%, a minor reason for less than 1%, and not a reason for less than 1%.
Given what we saw about consistent recognition above, it’s reassuring to see that a lack of recognition or appreciation is a minor reason for employee turnover for less than 1%, and isn’t a reason for 1%. While our audience also mentions compensation and benefits, this is the main reason for less than 1%, a significant reason for less than 1%, and a minor reason for less than 1%.
Joey Havens Perspective: I want to draw your attention to something the raw numbers hide: career growth (30%) and culture/values misalignment (27%) together account for 57% of departures — more than half — and neither shows up on a typical exit checklist next to “compensation.” Yet elsewhere in this same data, 89% of leaders say they communicate career paths very effectively. That gap between what leaders believe they’re communicating and what team members actually experience is one of the most common blind spots I’ve seen in four decades of leadership. People don’t leave because growth doesn’t exist — they leave because they can’t see it, feel it, or believe it applies to them. The other blind spot on culture rears its head here also, as a significant % of team members leave because of culture or lack of meaning. I would also note that, as we will explore later in this data, appreciation, recognition, and respect are all part of cultural alignment. This is also an area where the data doesn’t always show the entire picture. For example, Career growth, development, and culture are generally big TRIGGERS for the team member to even take a call from a recruiter or update their resume. Ultimately, when they find a new opportunity, the reasons have moved to career growth or compensation. When they leave due to a lack of flexibility, they will even take lower-paying positions to have the flexibility they need to manage their personal lives and careers. Flexibility is a baseline expectation for the workforce today, with some ability to influence when, where, and how they work.
What is the biggest barrier to improving employee retention for small to mid-sized business leaders?
Not knowing which strategies actually work is the biggest barrier to improving employee retention for 64% of small to mid-sized business leaders; 22% are hindered by leadership not prioritizing retention, 12% lack the time or resources to focus on it, and 1% find it difficult to compete with larger companies’ benefits
Barriers to improving retention pose a challenge:
Table data for chart
| Item | A minor barrier | A significant barrier | Not a barrier | The main barrier |
|---|---|---|---|---|
| Difficulty competing with larger companies’ benefits | 0.0 | 1.4 | 0.0 | 0.0 |
| Lack of time or resources to focus on it | 2.1 | 9.6 | 0.0 | 0.0 |
| Leadership not prioritizing it | 16.3 | 5.8 | 0.0 | 0.0 |
| Not knowing what strategies actually work | 7.9 | 56.2 | 0.6 | 0.2 |
Even the small to mid-sized business leaders who feel passionately about improving their organization’s employee retention rate are bound to encounter barriers to doing so. For less than 1% of our audience, not knowing what strategies actually work is the main barrier. This is also a significant barrier for more than half (56%), which suggests that, while these leaders may have looked into retention strategies, they haven’t actually implemented any. That said, 8% feel this is a minor barrier, and less than 1% think it’s not a barrier.
6% say that leadership not prioritizing the improvement of employee retention is a significant barrier, while 16% reckon this is a minor barrier. For 10%, a significant barrier is the lack of time or resources to focus on improving employee retention, although this is only a minor barrier for 2%. According to 1%, difficulty competing with larger companies’ benefits is a significant barrier, which ties in with what we saw above about compensation and benefits being the main reason or a significant reason for small segments of our audience.
Joey Havens Perspective: “We don’t know what strategies work” is the most honest answer in this entire survey, and I respect it — but I’d gently push back on it as an excuse. The strategies that work aren’t secret: stay interviews, real recognition, transparent career paths, sponsorship and advocacy, flexibility, trust-first leadership, confidential feedback loops, timely feedback, and leaders who actually connect and listen. None of these requires a consultant or a budget line. What’s actually missing isn’t knowledge — it’s the discipline to act consistently on what we already know. As Peter Drucker said, what gets measured gets improved — and I’d add, what gets prioritized gets done. Leaders are simply not focused on or prioritizing a people-first workplace culture.
How well do small to mid-sized business compensation packages compare to industry competitors?
30% of small to mid-sized business leaders’ organizations; compensation packages pay above the market rate, 30% are at the market rate, 30% pay below, and 11% don’t know how they compare
Compensation packages vary across the board:
Table data for chart
| Item | Percentage |
|---|---|
| We pay above market rate | 29.9 |
| We are at market rate | 29.9 |
| We pay below market rate | 29.6 |
| I’m not sure how we compare | 10.7 |
Sticking with the theme of compensation, almost a third (30%) of small to mid-sized business leaders’ organizations compare well to competitors in their industry, as they pay above market rate. Another 30% are at market rate, which means they also compare relatively well to competitors. Still another 30% pay below market rate, so they don’t compare particularly well.
However, the remaining 11% aren’t sure how their compensation packages compare to those of their competitors. This implies that they haven’t done much research into how they can differentiate themselves from their competitors in terms of what they offer their employees.
Joey Havens Perspective: I find the even three-way split here — above, at, and below market — less interesting than the 11% who don’t know. Pay is one of the easiest things to benchmark, and not knowing where you stand suggests a broader pattern of not knowing where you stand on the things that actually keep people — culture, sense of belonging, opportunity, development, recognition. If compensation feels like a mystery, it’s worth asking what else does too. For almost a third of the businesses to state they know they pay below market compensation, this represents a large wave of turnover that is churning now or is building steam under the hood as team members are disengaged and simply going through the motions. Pay transparency is something the internet has brought to all positions.
Which benefits do small to mid-sized businesses offer employees?
30% of small to mid-sized business leaders offer paid time off and sick leave, 29% 401(k) or retirement plans, 10% performance bonus or profit sharing, 6% health, dental, and vision insurance, 5% employee wellness programs, 4% parental leave, and 3% flexible work options
A wide range of benefits is on offer:
Table data for chart
| Item | Essential benefit | Not a priority | Not offered | Valuable to offer |
|---|---|---|---|---|
| 401(k) or retirement plan with employer match | 19.8 | 2.9 | 0.0 | 8.9 |
| Employee wellness programs | 5.2 | 0.0 | 0.3 | 0.2 |
| Flexible or remote work options | 1.5 | 1.0 | 0.0 | 1.9 |
| Health, dental, and vision insurance | 3.2 | 0.0 | 0.0 | 2.8 |
| Paid parental leave | 2.7 | 4.3 | 0.0 | 1.3 |
| Paid time off and sick leave | 28.3 | 1.0 | 1.5 | 2.0 |
| Performance bonuses or profit sharing | 4.6 | 1.0 | 0.7 | 4.5 |
| Professional development or tuition reimbursement | 0.3 | 0.0 | 0.0 | 0.0 |
Even in small to mid-sized businesses, compensation goes beyond weekly wages or a monthly salary. Employee packages, which can and do influence retention, often include various benefits. 28% currently offer employees paid time off and sick leave, regarding these as essential benefits. 2% also offer these, as they’re a valuable offering, while 1% think these benefits aren’t a priority even though they offer them, and still another 1% don’t offer these.
A 401(k) or retirement plan with employer match is offered by 20%, who think they’re essential benefits. These benefits are also offered by 9% who think they’re valuable, and by 3%, even though these business leaders don’t prioritize them. Performance bonuses or profit sharing are an essential benefit offered by 20%. Clearly, they believe in supplementing employees’ income based on individual or company performance.
Additional benefits offered by lower numbers
5% also offer these as valuable benefits, while less than 1% offer them without prioritizing them, and 1% don’t offer them. 3% offer paid parental leave as an essential benefit. This benefit is also offered by 1%, who see value in doing so, and by 4%, although this segment doesn’t prioritize it.
3% offer health, dental, and vision insurance as an essential benefit, while another 3% offer this as a valuable benefit. They’re not wrong, given the average cost of healthcare in the United States. 5% offer employee wellness programs, describing this benefit as essential. Less than 1% think it’s valuable to offer this benefit, while another less than 1% don’t offer it.
Flexible or remote work options are an essential benefit offered by 1%, while 2% think this is a valuable offering. Less than 1% offer this benefit without prioritizing it. An essential benefit offered by less than 1% is professional development or tuition reimbursement, which helps support employees’ career paths.
Flexible benefits are becoming essential for small businesses
Many of these benefits are in keeping with the US Chamber of Commerce’s suggestions for inexpensive benefits that small businesses can offer. According to the Chamber, these include flexible hours, more paid time off, remote work options, professional development courses, wellness programs, and mental health days.
The Chamber also provides helpful tips on how small businesses can afford employee benefits, such as setting a budget, splitting the cost of benefits with employees, outsourcing HR efforts to a professional employer organization to reduce benefit costs, choosing higher-deductible plans, and offering non-financial perks such as flexi hours.
Joey Havens Perspective: This is a data set that I really question the validity of the data or the inferences that are being made in collecting of the data. There are some glaring gaps where knowledge of the workplace would immediately cause you to question the overall findings. For example, most businesses are offering health insurance. The 6% response is too low for what is going on in the workplace. For roughly the same percentage of businesses to be offering PTO as 401K with a match also makes no sense, as significantly more small businesses provide PTO without a 401K benefit. These responses tend to reveal that people responded to these questions with different qualifiers. I would be cautious on making any significant conclusions with this data set. Notice what’s nearly absent from this list: professional development and flexible work options barely register, while PTO and retirement plans dominate. Benefits like these are table stakes — they keep you in the game, but they rarely make someone stay when a better offer comes along. The benefits that build loyalty are the ones that say “we’re invested in your future,” not just “we’re covering our legal obligations.” That’s a different conversation, and a more important one.
How do small to mid-sized businesses communicate advancement opportunities to employees?
89% of small to mid-sized business leaders’ organizations are very effective in communicating growth and advancement opportunities to employees, yet 8% do this poorly, 2% don’t have formal advancement opportunities, and 1% only communicate these paths somewhat effectively
There’s room for improved career path communication:
Table data for chart
| Item | Percentage |
|---|---|
| Very effectively — employees have clear career paths | 88.6 |
| Poorly — career paths are unclear or informal | 8.2 |
| We don’t have formal advancement opportunities | 1.8 |
| Somewhat effectively — we communicate but it could be stronger | 1.4 |
As we saw above, a tiny segment of our audience thinks professional development opportunities are an essential employee benefit. These small to mid-sized business leaders may be a minority, but they’re not wrong. We also saw above how a sizable chunk of our audience thinks a lack of career growth or advancement is one of the reasons why employees leave their company.
It turns out that many more business leaders in our audience actually do offer growth and advancement opportunities to employees, although they may not regard these as benefits in the traditional sense. However, these opportunities aren’t of much benefit if they’re not communicated effectively. Thankfully, this isn’t an issue for the majority, as 89% feel they communicate them very effectively, elaborating that their employees have clear career paths. 8% think they communicate growth and advancement opportunities poorly, as career paths in their organizations are unclear or informal.
Conversely, 2% admit they don’t have formal career advancement opportunities, which would contribute to a higher employee churn rate. 1% communicate opportunities somewhat effectively, acknowledging they could do so more strongly.
Joey Havens Perspective: This is the section I’d ask every reader to sit with the longest. 89% say they communicate growth opportunities very effectively. Yet earlier in this same data, lack of career growth is the #1 reason employees leave. Both can’t be fully true — and in my experience, they’re not. Leaders consistently overestimate how clearly their messages land. We say it once in an all-hands and consider it communicated; team members need to hear it, see it modeled, and experience it through real opportunities before they believe it. This is a fishbowl moment — what we intend to communicate and what’s actually visible to the people we lead are often two very different things.
Do small to mid-sized businesses have a structured onboarding program?
36% of small to mid-sized business leaders have a formal multi-week onboarding program for new employees, 30% have a program, but it’s informal and inconsistent, and 16% are still in the process of building one
The need for structured onboarding is prevalent:
Table data for chart
| Item | Absolutely structured | Needs improvement | No structure at all | Some structure |
|---|---|---|---|---|
| No structured onboarding exists | 0.0 | 0.0 | 0.2 | 0.0 |
| We’re in the process of building one | 9.4 | 2.7 | 0.2 | 6.9 |
| Yes, a formal multi-week program | 29.1 | 0.7 | 1.4 | 7.4 |
| Yes, but it’s informal and inconsistent | 16.7 | 10.7 | 1.6 | 13.0 |
A recent study revealed that employees who participate in an onboarding program are 69% more likely to be retained after three years, compared to those who do not. These programs may be impactful when it comes to employee experience, engagement, and retention, but this doesn’t mean every small to mid-sized business offers one.
17% of our audience’s organizations offer a structured onboarding program, but this is done informally and inconsistently, while those of 13% have some structure. Although like the latter segment’s, they’re offered informally and inconsistently. 11% admit their organization’s onboarding program is informal, inconsistent, and needs improvement. The programs of 2% have no structure at all and are informal and inconsistent.
29% explain that their organizations have a formal, multi-week onboarding program that’s highly structured, suggesting they’re well aware of the power of these programs and how they support employee retention and engagement. 7% also have a formal, multi-week program, although it only has some structure. This would allow them to tailor their programs according to the employees participating in them. Less than 1% think their formal, multi-week program can be improved, while 1% have a formal, multi-week program that, interestingly, has no structure at all.
A more structured approach is still lacking
9% are in the process of building a structured onboarding program, while 7% are building one with some structure. 3% are also in the process of building a program, although they admit that what they’ve done so far needs improvement. Less than 1% are building a program with no structure at all. Still, another less than 1% say no structured onboarding exists within their organizations, which, in all likelihood, contributes to their employee turnover rate.
Joey Havens Perspective: A 2018 study found new hires with structured onboarding are far more likely to stay (cited elsewhere in this piece — worth a cross-reference here too). My experience confirms this benefit: the more we invested in our onboarding, the longer we had team members. It’s also very important that top leadership is part of this process. Onboarding isn’t a checklist or a binder of policies. It’s the first place where team members learn whether your stated values match your daily behavior. It’s their first and lasting impression of whether they matter and whether their role matters. It’s the first real opportunity to make connections that matter and start building that sense of belonging. The 30% running informal, inconsistent onboarding aren’t necessarily uncaring — they’re often just under-resourced. But inconsistency in someone’s first weeks plants a seed of doubt that’s hard to undo later.
How often do small to mid-sized businesses conduct exit interviews?
21% of small to mid-sized business leaders always conduct exit interviews when employees leave, but 38% never do and lack a formal process, 21% do so rarely, and 20% do so sometimes, depending on the situation or manager
Conducting exit interviews is not the norm:
Table data for chart
| Item | Percentage |
|---|---|
| Never — we don’t have a formal process | 38.3 |
| Always — it’s a standard part of our offboarding process | 21.0 |
| Rarely — it happens informally if at all | 20.6 |
| Sometimes — depends on the situation or manager | 20.1 |
Exit interviews are an excellent opportunity for organizations to discover issues with workplace culture, management practices, and operational processes. When organizations know why employees leave, they can implement changes that reduce turnover, improve retention, and mitigate potential risks.
Unfortunately, as we discovered, more than half of small to mid-sized business leaders rarely or do not conduct exit interviews. 38% never conduct them, as they have no formal process for doing so. This would make it difficult to make relevant changes aimed at improving retention.
On the other hand, 21% always conduct exit interviews, as these are a standard part of their offboarding process. This tells us that these leaders are serious about improving the employee experience as much as possible. Another 21% rarely conduct interviews, explaining they happen informally, if at all. The remaining 20% sometimes interview employees who are leaving, although this depends on the situation or the manager.
Joey Havens Perspective: If you’re only learning why people leave from the people who are already gone, you’re always one step behind. Exit interviews are not as insightful or helpful as stay interviews. On one hand, the team member has an incentive to share why they left, yet on the other hand, they do not want to burn any bridges. My experience is that exit interviews, for the most part, are significantly watered down due to conflict avoidance and a desire to keep doors open. That is not to say that significant trends can be detected in the process.
How often do small to mid-sized business leaders conduct stay interviews or check-ins?
83% of small to mid-sized business leaders conduct stay interviews of check ins to understand what keeps employees motivated once or twice a year, 8% do so quarterly, and 5% when someone resigns, but 4% never do check-ins at all
Engagement check-ins are held by the majority:
Table data for chart
| Item | Percentage |
|---|---|
| Occasionally (once or twice a year) | 82.9 |
| Regularly (quarterly or more) | 8.2 |
| Rarely (only when someone resigns) | 4.9 |
| Never | 4.0 |
Aimed at helping small- to mid-sized business leaders understand what keeps employees engaged and what might tempt them to leave, stay interviews enable organizations to address problems before employees resign. The majority (83%) of our audience conducts stay interviews occasionally (one or twice a year), which is in keeping with The Human Resource Consulting Group’s recommendation that these happen regularly, about every 12 to 24 months. 8% conduct them regularly (quarterly or more), while 5% conduct them rarely, usually only when someone resigns.
On the flip side, 4% never conduct stay interviews, which may be because they rely on informal discussions to learn more about what keeps employees engaged or because they’ve not given any thought to how employees feel about working for them.
Joey Havens Perspective: I’d challenge the framing that 83% conducting these “once or twice a year” represents engagement. A once-a-year check-in is closer to a performance review than a relationship. This fits the “I need to lose weight narrative.” Stay interviews work because they’re frequent enough to catch problems while they’re still small — quarterly, at minimum, ideally more casual and more often than that. The 8% doing this quarterly or more are the ones I’d want to learn from.
How do small to mid-sized business leaders’ organizations approach employee recognition?
37% of small to mid-sized business leaders’ organizations don’t have an employee recognition practice, and 25% agree that recognition doesn’t happen often enough; however, 25% agree that, although informal, good work is recognized constantly, and 14% have a structured and consistent approach built into their culture
Employee recognition doesn’t have to be formal to be effective:
Table data for chart
| Item | Percentage |
|---|---|
| Nonexistent — we don’t have a recognition practice | 36.5 |
| Rare — recognition doesn’t happen often enough | 25.2 |
| Informal but present — managers recognize good work occasionally | 24.7 |
| Structured and consistent — recognition is built into our culture | 13.6 |
According to Quantum Workplace, only 35% of employees receive recognition monthly or weekly, and 1 in 2 employees would like more recognition for their work. These figures need to be taken seriously, as employees who continually feel underappreciated are likely to look for work with organizations that do make their workers feel appreciated. These figures also suggest – and rightly so – that organizations approach employee recognition differently.
Sadly, more than a third (37%) of small to mid-sized business leaders describe their organization’s approach as non-existent, explaining that they don’t have a recognition practice. A quarter (25%) admit that employee recognition is rare in their organization, adding that it doesn’t happen often enough (which at least shows a certain amount of awareness on their part).
Another 25% explain that their organization’s approach is informal but present, with managers recognizing good work occasionally. Unfortunately, this might not happen often enough to have a positive impact on employee retention.
Only 14% say they have a structured and consistent process, as recognition is built into their company culture.
Joey Havens Perspective: 37% with no recognition practice and another 25% saying recognition doesn’t happen often enough — that’s 62% of organizations where most people go unnoticed most of the time. Recognition isn’t a program you roll out; it’s a habit you build. The leaders I respect most aren’t the ones with the fanciest recognition software — they’re the ones who notice people, in the moment, consistently, without being prompted. That costs nothing and changes everything.
The Achievers Workforce Institute 2026 Engagement and Retention Report reports that only 25% of team members feel appreciated or receive regular recognition. This can only be corrected with people-first leadership where the culture supports and reinforces appreciation, gratitude, and recognition.
Which retention strategies do small to mid-sized businesses use?
Mental health and wellness benefits are absolutely in use at 60% of small to mid-sized business leaders’ organizations and likely in use in 34%, compared to the 2% who have professional development programs and the 1% with employee recognition programs
One main benefit leads:
Table data for chart
| Item | Absolutely in use | Likely in use | Not really in use | Not used at all |
|---|---|---|---|---|
| Clear career pathing | 0.0 | 0.2 | 0.6 | 0.0 |
| Competitive salaries and bonuses | 0.4 | 0.7 | 0.0 | 0.5 |
| Employee recognition programs | 1.1 | 0.2 | 0.0 | 0.0 |
| Flexible work arrangements | 0.0 | 0.1 | 0.0 | 0.0 |
| Mental health or wellness benefits | 59.8 | 33.7 | 0.4 | 0.0 |
| Professional development programs | 2.4 | 0.0 | 0.0 | 0.0 |
Mental health or wellness benefits are the most popular retention strategy among the overwhelming majority of small to mid-sized businesses. 60% of business leaders agree these benefits are absolutely in use in their organizations, while 34% are less committal, saying they’re likely in use. These organizations aren’t wrong to offer such benefits. More than half of workers still feel “used up” at the end of the workday, and more than two in five feel burned out from work, according to SHRM’s Employee Mental Health in 2024 research. SHRM’s latest research also reveals that burned-out employees are three times more likely to leave.
Professional development programs, which we delved into above, are absolutely in use at 2% of organizations, while competitive salaries and bonuses are absolutely in use at less than 1%, are likely in use at another less than 1%, or are not used at all by still another 1%. Employee recognition programs (also discussed above) are absolutely in use at 1% of organizations and are likely in use at less than 1%. For the remainder of the audience, a clear career path is either likely in use (less than 1%) or not really in use (less than 1%).
Joey Havens Perspective: I want to flag something here rather than just report it: mental health and wellness benefits showing up at 60%+ “absolutely in use” while competitive salaries and clear career paths barely register, feels disproportionate to what I see in the field. It’s possible this reflects what people are talking about online more than what businesses are actually doing. Either way, wellness benefits matter — but they’re not a substitute for fair pay, real growth opportunities, and a culture where people feel they belong. No wellness program fixes a culture problem; it just makes the symptoms a little more bearable.
How much does remote or flexible work influence retention in small to mid-sized businesses?
Remote or flexible work is a major retention advantage for 75% of small to mid-sized business leaders’ organizations; comparatively, 25% don’t offer flexibility and recognize it may be hurting retention.
Flexibility is crucial for employee retention:
Table data for chart
| Item | Percentage |
|---|---|
| It’s a major retention advantage for us | 74.5 |
| We don’t offer flexibility and it may be hurting retention | 25.5 |
According to FlexJobs, 5% of workers want some form of remote work. However, many employers now require workers to be in the office five days a week. The benefits of remote work, namely reduced commute time, better work-life balance, flexibility in work location, and autonomy, can positively impact employee retention. The FlexJobs survey found that employees believe remote work positively impacts their mental (93%) and physical (90%) health, with half of respondents citing decreased stress levels as a major benefit.
Given these benefits, it makes perfect sense that 75% of small to mid-sized business leaders consider remote or flexible work a major retention advantage for their organizations. The remaining 25% admit that they don’t offer flexibility but are aware enough to recognize that doing so may be hurting their organization’s employee retention.
Joey Havens Perspecive: First, the reference to the Flexjobs report and citing 5% must be a typo as 95% would make more sense in respect to team members wanting more flexibility, which includes remote work. In fact, this report says that nearly 33% of team members will not even apply if no remote work is offered. Flexibility is the future of the workforce. 75% calling flexibility a major retention advantage tracks with what I hear constantly from leaders and team members alike. What I’d add is that flexibility isn’t really about where work happens — it’s about trust. When you give people control over how they get their work done, you’re telling them you trust their judgment and care about their whole life, not just their output between 9 and 5. That message resonates far beyond the logistics of remote work itself.
How challenging is replacing an employee for mid-sized business leaders?
Replacing an employee has minimal impact for 34% of mid-sized business leaders, but 33% find it extremely challenging, 17% feel it is somewhat manageable, and 16% agree replacements are moderately challenging due to time and resources required
Employee replacement isn’t always easy:
Table data for chart
| Item | Percentage |
|---|---|
| Minimal impact — we hire quickly | 33.8 |
| Extremely challenging — it disrupts operations significantly | 33.1 |
| Somewhat manageable — we have a process in place | 16.9 |
| Moderately challenging — it takes time and resources | 16.2 |
Unless organizations have severe financial constraints, they need to replace employees who leave, and this can be more challenging for some than for others. Replacing an employee who leaves has minimal impact on 34% of small to mid-sized business leaders, as they hire quickly. However, 33% find it extremely challenging, adding that this disrupts their operations significantly.
According to 17%, replacing an employee who leaves is somewhat manageable, thanks to the process they have in place, although 16% explain that the time and resources it takes make this moderately challenging.
Joey Havens Perspective: The split here — a third saying replacement is minimal impact, a third saying it’s extremely disruptive — likely reflects role-dependent reality more than anything else. But I’d ask leaders in the “minimal impact” group to consider: if losing someone barely disrupts you, what does that say about how replaceable that person felt while they were there? Sometimes “we hire quickly” is a strength. Sometimes it’s a sign that roles are commoditized in a way that erodes a sense of belonging.
What is the estimated cost to replace one employee for small to mid-sized businesses?
For 85% of mid-sized business leaders, it likely costs between $5,000 and $15,00 to replace one employee, but 7% say this isn’t the cost at all, and 7% share the same opinion about replacement costs being $16,000 to $30,000
Replacement costs are not on the low side:
Table data for chart
| Item | Likely | Not at all |
|---|---|---|
| $16,000–$30,000 | 0.0 | 7.5 |
| $5,000–$15,000 | 85.0 | 7.5 |
Gallup found that replacing leaders and managers in an organization costs about 200% of their salary, while replacing professionals in technical roles costs about 80% of their salary. Replacing frontline employees costs 40% of their salary.
For our audience, 85% of small to mid-sized business leaders say that, in monetary terms, the likely cost of replacing one employee in their organization is between $5,000 and $15,000, depending on their role. However, 7% say this isn’t the cost at all. Another 7% mention costs of between $16,000 and $30,000, although they admit that replacing a single employee does not cost this at all.
Joey Havens Perspective: The widely cited Gallup research on replacement costs (40% of salary for frontline roles, up to 200% for leadership) suggests many of the $5,000-$15,000 estimates here may be understated, especially once you account for lost productivity during the gap, training time, and the ripple effect on remaining team members who absorb the workload. Underestimating this cost is part of why retention doesn’t get the budget priority it deserves — the bill feels smaller than it actually is. So much of the cost of turnover doesn’t show up on the financial statements as a line item, so it’s like a hidden cancer that constantly eats into profit.
Do small to mid-sized businesses track retention or business impact ROI?
50% of mid-sized business leaders’ organizations regularly track the ROI or business impact of retention efforts, and 19% do so somewhat; however, 14% don’t track these metrics but plan to start to, and 15% agree tracking is not a priority
Not everyone is concerned with ROI:
Table data for chart
| Item | Absolutely tracking | Not really tracking | Some tracking |
|---|---|---|---|
| No, and it’s not currently a priority | 4.4 | 3.9 | 6.9 |
| No, but we plan to start | 14.4 | 0.0 | 2.1 |
| Somewhat — we track some metrics but not comprehensively | 0.0 | 0.0 | 19.2 |
| Yes, we measure it regularly | 33.6 | 0.0 | 15.5 |
An organization’s retention efforts have a measurable return on investment (ROI) and business impact. If organizations don’t track these, they won’t know whether their investment is paying off or whether the impact on the business is positive or negative. More than a third (34%) of our audience absolutely do track these, measuring them regularly, while 16% do some tracking on a regular basis. 19% do this somewhat, explaining that they track some metrics but not comprehensively.
14% do not track these metrics, although they absolutely plan to start doing so. 2% plan to start doing some tracking, but this isn’t likely to be as comprehensive as the previous segment. 4% absolutely do not track retention effort ROI or business impact, saying that this isn’t currently a priority, while 7% don’t do some tracking as, like the previous segment, it’s not a priority. The remaining 4% aren’t really tracking these metrics, as this isn’t a priority for them.
Joey Havens Perspective: Roughly half tracking ROI sounds encouraging until you ask what they’re measuring. Turnover rate alone is a lagging indicator — it tells you about the people who already left. The leaders I’d consider ahead of the curve are tracking leading indicators: engagement trends, manager 1:1 consistency, time-to-fill, and whether stay interviews are actually happening. Measuring retention only by counting departures is like measuring health only by counting funerals.
How much budget do small to mid-sized businesses allocate to employee retention initiatives?
While 45% of mid-sized business leaders’ organizations have no employee retention initiative budget, 45% have more than 10% of their HR or people budget for retention initiatives, 6% have 5-10% of this budget, and 4% less than 5%
Budgets for retention are variable:
Table data for chart
| Item | Percentage |
|---|---|
| We have no dedicated retention budget | 45.2 |
| More than 10% of our HR or people budget | 45.2 |
| 5–10% of our HR or people budget | 5.5 |
| Less than 5% of our HR or people budget | 4.1 |
Replacing employees costs money, as do employee retention initiatives. However, not every organization wants to spend a lot of money on the latter, even if it would ultimately save money on the former. 45% of small to mid-sized business leaders do not have a dedicated retention budget, which may stem from treating their initiatives as ad hoc expenses; this suggests they don’t do much to retain employees. This can also make it difficult to plan and implement strategies.
Another 45% are far more proactive and serious about their initiatives, as they’ve dedicated more than 10% of the HR or People budget to them. 6% take a slightly more conservative approach, dedicating between 5% and 10% of their HR or People budget to employee retention initiatives. 4% dedicate less than 5% of their HR or People budget, which may be due to budget constraints, a lack of understanding of the importance of these initiatives, or minimal churn.
Joey Havens Perspective: The split here — 45% with no dedicated budget and 45% with more than 10% of HR budget — tells me this issue divides organizations sharply rather than gradually. There’s very little middle ground, which suggests retention is either a genuine strategic priority with resources behind it, or it’s an afterthought. I’d encourage the “no budget” group to start small rather than wait for a big number — even modest, consistent investment in recognition or stay interviews costs far less than a single replacement hire.
How prepared are small to mid-sized businesses to compete with larger companies for talent?
56% of mid-sized business leaders’ organizations are very prepared to compete with larger companies for talent, but 24% are not very prepared, and 21% are unsure due to not having benchmarked themselves against larger employees
Some businesses are better prepared to take on bigger entities for talent:
Table data for chart
| Item | Percentage |
|---|---|
| Very prepared — we offer compelling reasons to choose us over big employers | 55.6 |
| Not very prepared — larger companies consistently outcompete us | 23.7 |
| Unsure — we haven’t benchmarked ourselves against larger employers | 20.7 |
In the fourth quarter of 2025, the MetLife & U.S. Chamber of Commerce Small Business Index showed that small businesses’ concerns about their ability to retain employees (17%) and attract talent (14%) are rising. Our insights align with this, as only 56% of small to mid-sized business leaders feel very prepared to compete with larger companies for talent, as they offer compelling reasons to choose their organization over big employers.
24% admit they’re not very prepared to compete with larger companies, as these companies consistently outcompete them. At least some of the business leaders in this segment may be among those who’ve dedicated minimal or no budget to employee retention strategies or among those who haven’t implemented any strategies because they don’t know which work.
The remaining 21% are unsure, as they haven’t benchmarked themselves against larger employers. The leaders in this segment may also be among those who don’t know how their compensation packages compare with competitors’.
Joey Havens Perspective: The 21% who are unsure because they haven’t benchmarked themselves are in a more vulnerable position than the 24% who know they’re behind — at least the second group knows what they’re up against. Smaller organizations often have real advantages over larger competitors: closer relationships, faster decisions, more visible impact. But you can’t lean into those advantages if you don’t know they’re advantages. Knowing where you stand is the first step to deciding where to compete.
How are small to mid-sized businesses using AI tools to support employee retention?
35% of mid-sized business leaders’ organizations are currently exploring using AI tools to support employee retention or people management, 16% are leveraging AI for personalized learning and development recommendations, 8% are using AI-assisted recruiting and onboarding, and 5% are using AI-powered engagement or pulse survey tools to monitor employee sentiment; however, 35% are not currently using AI for support in this area
The use of AI in employee retention is already at impressive levels:
Table data for chart
| Item | Percentage |
|---|---|
| We are exploring AI but have not implemented anything yet | 35.4 |
| We are not currently using AI in this area | 35.4 |
| Leveraging AI for personalized learning and development recommendations | 15.7 |
| AI-assisted recruiting and onboarding to improve early employee experience | 8.2 |
| Using AI-powered engagement or pulse survey tools to monitor employee sentiment | 5.3 |
According to Deel, AI can be a powerful support for small to mid-sized businesses’ employee retention initiatives. Business leaders can use this technology to monitor employee engagement, helping them detect potential issues before they escalate into larger problems that lead to worker turnover.
Additionally, they can use AI for performance management tasks (such as AI-generated feedback summaries, personalized goal-based feedback, and objective, unbiased evaluations), personalized career development, employee skills development, HR support and chatbots, personalized onboarding, and employee sentiment analysis.
AI use is not yet widespread in retention
Despite AI’s potential in this regard, more than half of small to mid-sized business leaders aren’t using it to support employee retention or people management. 35% are exploring AI but haven’t implemented anything yet, so they’re at least aware that it can be helpful, while another 35% aren’t currently using AI in this area, although this may change in the future.
16% use AI for personalized learning and development recommendations, 8% for AI-assisted recruiting and onboarding to improve early employee experience, and 5% for AI-powered engagement or pulse survey tools to monitor employee sentiment. These latter segments’ use of this technology all ties in with Deel’s insights, which is good, although these businesses could use it for much more in terms of employee engagement and retention.
Joey Havens Perspective: I’d resist the urge to treat AI adoption here as either a finish line or a fad. The leaders using AI for sentiment analysis or pulse surveys (5%) are using it for something timeless — listening at scale. That’s the part that matters. The technology is new; the need for leaders to actually hear their people is not. Whatever tools you use, the question is the same one it’s always been: are you creating ways for people to tell you the truth, and are you prepared to act on what you hear?
What industry do small to mid-sized businesses operate in?
92% of small to mid-size businesses operate in other industries, 3% are in manufacturing or logistics, 2% healthcare or medical, and 1% each in construction or trades, and technology or software
Most of our audience operates outside of the specified industries:
Table data for chart
| Item | Percentage |
|---|---|
| Other | 92.4 |
| Manufacturing or logistics | 2.9 |
| Healthcare or medical services | 2.4 |
| Construction or trades | 1.1 |
| Technology or software | 1.0 |
| Professional services (accounting, legal, consulting) | 0.1 |
The overwhelming majority of our audience (92%) does not disclose the industry in which their small to mid-sized business operates. Of those that do, 3% operate in the manufacturing or logistics industries, and 2% in healthcare or medical services. 1% operate in the construction industry or trades, while another 1% operate in the technology or software industries.
Joey Havens Perspective: With 92% of this audience falling into “other” industries, I’d encourage readers not to over-index on industry-specific assumptions from this data. The patterns we’re discussing — reactive priorities, communication gaps, under-tracked metrics — show up across nearly every industry I’ve worked with, from professional services to manufacturing to healthcare. People-first leadership isn’t an industry strategy; it’s a leadership strategy.
How many employees do small to mid-sized businesses currently have?
69% of small to mid-sized businesses currently have 500+ employees, 16% have 151-500 employees, 8% 51-150 employees, and 6% 10-50 employees
The majority of our audience works within bigger organizations:
Table data for chart
| Item | Percentage |
|---|---|
| 500+ employees | 68.9 |
| 151–500 employees | 16.4 |
| 51–150 employees | 8.3 |
| 10–50 employees | 6.4 |
The majority (69%) of businesses represented by our audience are mid-sized, as they have 500 or more employees. The Small Business Administration (SBA) defines a small business as an independent business with fewer than 500 employees. According to the SBA, there were 5.58 million US firms that had at least one employee but fewer than 500 employees in 2023, which was an increase from the 5.53 million in 2022.
The rest of our audience represents small businesses of various sizes. 16% have between 151 and 500 employees, while 8% have between 51 and 150 employees. The remaining 6% have between 10 and 50 employees.
Joey Havens Perspective: It’s worth noting that 69% of this audience runs organizations of 500+ employees, which technically places most of them outside the SBA’s definition of a small business. My experience with leaders and team members shows that organizations with fewer than 2000 team members generally see themselves as small- to medium-sized businesses. I share this not as a critique of the data, but as a reminder for readers: if your organization is smaller than this, the numbers might differ, but I’d bet the patterns — the gaps between intention and action, the blind spots leaders have about their own culture — look remarkably similar. These dynamics aren’t a function of size. They’re a function of leadership.
Proactive employee retention is becoming a business necessity
From what we’ve seen, many small to mid-sized businesses in the US are right to be concerned about their ability to retain employees.
Too many aren’t investing adequately or at all in employee retention initiatives, and it’s to their detriment, as ensuring workers are satisfied enough to stay at a company doesn’t happen through wishful thinking. That said, some in our audience have an exemplary approach, as they clearly understand the importance of competitive compensation and that technologies like AI can support their efforts.
The main takeaway here is to approach employee retention proactively, rather than treating it as a problem to be solved only after your best talent has left you for a competitor that clearly values its workers. Do this, and you’ll retain your current workforce while continuing to attract top talent.
Joey Havens Perspective: I agree with the main takeaway from this data: Be proactive with team member retention for higher performance and sustainability. It starts with a people-first leadership approach.
About the data
Sourced using Artios from an independent sample of 618,068 opinions of small to mid-sized business leaders in the USA across X, Quora, Reddit, Bluesky, TikTok, and Threads. Responses are collected within a 95% confidence interval and 5% margin of error. Results are derived from what people describe online and from opinions expressed, not from actual questions answered by people in the sample.
