Why Is Employee Retention a Top Concern for U.S. Employers?

Even with the continued presence of the “Great Stay” and “job hugging” workplace trends, retention remains a persistent business concern for employers.

According to recent research from risk management and consulting firm Gallagher, 63% of surveyed organizations reported turnover rates of 10% or more in 2025, with 44% reporting quit rates of at least 15%. In addition, almost 40% of respondents listed retention as a leading operational priority.

“When organizations lose key, high-performing talent, that’s where it’s really impacting organizations,” said Rey Ramirez, a co-founder of Thrive HR Consulting. “They’ve already reduced staff over the last several years; now the ones that are left are really critical. Any one or two people you lose in a department can just be catastrophic.”

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Why Employees Stay

Turnover concerns may be higher in certain areas and industries — such as artificial intelligence (AI)-focused roles, skilled trades, lower-wage roles that are disproportionately impacted by rising costs and high-skilled professional roles that involve a heavy loss of institutional knowledge. But organizations, in general, aren’t brushing aside retention goals, said Steve Dion, Gallagher’s national managing director of leadership and organizational development.

For example, the firm’s research found 61% of employers expected revenue growth in 2027, but only 50% anticipate an increased workforce headcount.

Retaining employees often comes down to their beliefs about their work, said Sue Holloway, a content director at WorldatWork.

WorldatWork’s 2026 State of Rewards report found employees are more likely to stay if they believe their work is meaningful, if they feel connected and valued in their workplace, and if they think there’s room to grow internally. In fact, after baseline pay and flexibility expectations, meaningful work was the leading contributor to retention.

“Retention is not just an HR metric; it’s a business performance issue,” Holloway said. “Replacing employees is costly, and turnover can disrupt productivity, customer relationships, team effectiveness and institutional knowledge.”

AI’s Impact on Retention

The integration of AI tools is an inevitable driver of retention success or turnover surge in any workplace, with job cuts being one component.

“With the reductions happening related to AI, in many cases, the work isn’t going away,” Ramirez said. “They may think [the work is] going to AI, but not all of it is. Suddenly, one person has two jobs. That causes mental fatigue and burnout, which also drives retention challenges.”

According to Dion, AI’s impact on retention and turnover extend much further than reduced headcount. He noted many organizations now appear to be more focused on boosting AI efficiency to reduce workforce growth.

“We’re just at the beginning of this tsunami of how AI is going to impact jobs and roles,” he said. “There’s a point where an organization can either say, ‘AI is going to happen to this workforce, or AI is going to happen for this workforce.’”

By utilizing open communication from leaders and setting clear expectations around AI use, organizations can position the technology as a tool that helps employees rather than a threat to their roles.

“If there’s a belief that an organization wants nothing but profit at the worker’s expense, that’s a problem,” Dion said. “If there’s a fracture in the trust relationship, it’s going to become a big divide as you try to learn and adopt AI tools.”

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