Guide to employee retention: how to keep your best talent

Frequently Asked Questions

How do you calculate your retention rate?

Before you can lift retention, you need to know what your current retention rate is.

To calculate retention, first choose the time span you want to review — for example, the last year or the most recent quarter. Then gather two figures:

1. The number of employees you had at the start of the period

2. The number of employees at the end of the period (excluding any new hires)

Next, use the following calculation to determine your staff retention rate:

So, for example, if you began a quarter with 162 employees and finished with 170 employees, of whom 20 were new hires, your calculation would be:

((170-20) ÷ 162) × 100 = 92.56%

It’s important to subtract any new hires so you don’t overstate retention. For instance, if you have 100 employees and add five new starters with no departures in three months, your retention rate would appear as 105%. By removing new hires from the equation you get a truer picture.

When measuring longer timescales, people may join and leave within the window you’re assessing. In that case you can calculate a separate new-hire retention figure using hires added and hires retained. For example, if you take on 20 new people in three months and one leaves, the new-hire calculation would be:

((20-1) ÷ 20) × 100 = 95%

Generally, retention rates above 90% are regarded as strong. For new hires specifically, you’d want to see 95% or higher, since early departures are more common in the first few months.

Roles with the highest turnover include Product (36.4%), Information Technology (36%), and Engineering (35.2%).

Employee retention tactic:

Try calculating retention separately for on-site and remote teams. If there’s a gap, it may indicate remote workers feel less supported than their office-based colleagues.

Why does top talent choose to leave?

Bear in mind that turnover varies by sector: retail, tech and media, professional services, entertainment, and accommodation tend to have lower-than-average retention figures. If your company sits in one of these industries, your target retention rate may be lower than a global benchmark.

If your retention isn’t where you want it, you’ll need to understand why staff are leaving.

McKinsey’s 2022 Great Attrition, Great Attraction Survey 2.0 offers useful insights. According to that survey, employees cite the following main reasons for quitting:

1. Lack of career development and advancement

2. Inadequate total compensation

3. Uncaring and uninspiring leaders

4. Lack of meaningful work

5. Unsustainable work expectations

6. Unreliable and unsupportive colleagues

7. Lack of workplace flexibility

8. Lack of health and wellbeing supportA non-inclusive and unwelcoming community

Addressing these challenges in your organisation is vital if you want to secure the benefits of strong remote retention. With these drivers in mind, let’s explore the most effective ways to improve retention.

The role of equitable global compensation in staff retention

People are more likely to remain with your company if they feel valued and treated fairly. As evidence and common sense show, fair compensation is often the most direct place to begin.

Why is equitable compensation so important?

When employees believe their pay reflects their skills and is comparable to colleagues’, they tend to be more satisfied and motivated.

Equitable compensation is one of the foundations of retention in any organisation. A fair-pay approach builds trust and confidence, which encourages people to perform well and stay with the company.

Paying team members appropriately is key, but getting it right can be complex. To ensure fairness, see our guide to remote worker compensation.

How to construct a benefits programme to retain top global talent

Firms that allow remote working tend to have lower turnover than office-only companies. Remote’s research indicates this gap is estimated to widen to 4.4% in 2023.

If you want to attract and keep a global team, you need to offer a locally customised, globally competitive benefits plan.

Offering the same benefits package everywhere is tempting, but it rarely meets local needs. Benefits should reflect local priorities and cultural differences. Done well, benefits help you attract talent and are essential for retaining it.

Joana Viana, Senior Global Benefits Design & Strategy Expert

To tailor benefits packages and compete with local employers who understand their markets, you need deep local insight.

Here’s an example:

In the UK

Offering a medical plan that includes maternity cover in the UK is unlikely to impress, since the National Health Service (NHS) already offers free healthcare including maternity services.

In Singapore

By contrast, a medical plan with maternity cover in Singapore can significantly improve an employer’s appeal. Maternity care there can cost thousands, so including this cover reassures prospective parents. In Singapore, maternity healthcare can end up costing thousands of dollars, so anyone considering parenthood would feel reassured to have this type of cover as part of their benefits package.

Local insight is crucial for benefits, but gathering it yourself can be time-consuming. That’s why we created the Global Benefits Report to help businesses quickly compare preferred benefits across countries and regions.

Need a hand with your global benefits approach?

At Remote, we connect companies with local benefits experts so you know what’s mandatory and what’s optional. We also provide curated plans for each country, saving you the time and cost of doing the research yourself.

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"Remote helped us build loyalty with employees by providing world-class benefits and the rights that come with being employed locally."

Heather Miki, People Operations Manager @ kWh Analytics

"We wanted to quickly grow our Mexico presence without navigating the intricacies of incorporation, payroll, and benefits management ourselves. Remote allowed us to do exactly that."

Greg Kefer,CMO @ Lifelink Systems

Build a remote-first culture to manage global teams effectively

Remote-first companies aren’t only for remote staff. By adopting remote-first ways of working you create a fairer experience for everyone, wherever they are. Emphasising documentation, asynchronous work practices and a results-focused culture benefits all team members. Here’s how to build a remote-first environment.

How to reduce employee turnover with a strong talent retention strategy

What do we mean by remote-first?

Remote-first means remote work is treated as the default. Employees at HQ and those who’ve never been in the office should have the same experience working for your company.

Culture isn’t only about social events; it’s also about how work gets done. We’ve prepared a guide to building a strong, supportive remote culture to walk you through the process. What needs to change to go remote-first?

Switching from office-based to remote-first isn’t simple. Trying to copy office habits into a remote setting will only get you part of the way there.

Without those quick, informal interactions — dropping by a colleague’s desk or chatting in the car park — remote staff can feel cut off, overworked, and ineffective. New remote managers often make avoidable mistakes that make this worse:

Common remote leadership mistakes to avoid

• If you don’t communicate publicly and frequently, staff can lose sight of the team’s wider goals.

• If you disregard employee downtime and expect people to respond off the clock, team members risk burnout.

• If you don’t model a healthy life–work balance, staff may feel pressured to work excessive hours and suffer as a result.

• If you micromanage through constant check-ins or time trackers to reassure yourself, you’ll push good people away.

• If you misuse communication tools — for example, sending DMs rather than posting in public channels — messages get fragmented and people feel excluded.

Making these errors damages the employee experience and undermines your retention efforts.

Regular employee surveys and exit interviews help leaders gauge — and, where needed, improve — job satisfaction. That, in turn, reduces turnover.

The problem with micromanagement

Micromanagement is a frequent issue in remote work. Many managers feel uneasy about giving staff autonomy over their day.

Because of this, some organisations install tracking software on employees’ devices to monitor productivity. The outcome is that experienced employees don’t feel trusted.

This can breed resentment and erode mutual respect. It also encourages key employees to do the bare minimum.

So, what should remote-first managers do differently?

Judge employees by their output and impact, not by hours logged.

Why remote-first management is so powerful

Employees value flexibility above almost everything. Remote’s Global Benefits Report found workers worldwide prioritise flexible workdays over many other benefits, including four-day weeks and retirement plans.

What does that mean for managers of remote teams?

People want to fit work around their lives rather than the reverse. They still want to do great work for great companies, but they won’t put their lives on hold to do it.

Prioritise diversity, equity, and inclusion to keep employees connected

Employees increasingly choose workplaces that are diverse, equitable, and inclusive. Remote-first organisations are well placed to accelerate better DEI practices.

How a more diverse and inclusive culture benefits retention rates

DEI (Diversity, Equity, and Inclusion) is a powerful multiplier for retention. Embedding DEI in your culture delivers:

How to develop a diverse, equitable, and inclusive global workforce

Building a diverse, equitable, and inclusive global workforce takes real, ongoing commitment.

• Create a remote DEI committee to help you understand challenges and opportunities.

• Ask your team for frank feedback on DEI performance.

• Develop a formal DEI policy and update it regularly with input from team members.

• Incorporate DEI into your recruitment strategy by using inclusive hiring practices.

• Support inclusion of underrepresented groups, including women, ethnic minority, LGBTQ, and neurodivergent employees

Want to become a globally inclusive employer? Get up to speed with our webinar: Building a globally inclusive recruitment strategy.

5 pillars to motivate and retain a high-performing remote team

When a team feels motivated and productive they’re happier to log on each day. Leaders must maintain motivation and performance across global teams by nurturing the employee experience from recruitment through onboarding and beyond.

Intelligent recruitment

Start well by using values-based, remote-first recruitment practices.

• Communicate clearly and transparently

• Adapt the interview process to suit candidate time zones

• Share insights into what a remote-first culture is like for employees

These approaches help you attract candidates who share your values, fit with your team, and know what to expect from your workplace.

Seamless communication

Good communication and a strong employee experience go together. To improve communication, follow our communication guidelines for remote teams:

• Prevent notification burnout. Encourage staff to switch off notifications when they need to focus.

• Make updates transparent and searchable. Record key meetings and progress reports, then store them in public locations so everyone can access them.

• Establish communication norms. Make sure staff know the best practices for each communication platform your company uses.

• Never sacrifice 1-1s. Regular one-on-one meetings let you get to know employees and give them space to raise concerns.

Comprehensive onboarding

Onboarding is another lever for retaining remote workers.
Employee turnover can be as high as 50% in the first 18 months. To avoid this, the ideal remote onboarding programme includes:

• Engaging, self-serve resources

• Assigned onboarding buddies

• Introduction to company values and culture

• Information on company communication norms

• Expectations and targets for the first weeks of work

• Regular manager check-ins

Clear progression opportunities and communicated career paths are the most effective way to improve retention (63%) — even more so than pay rises!

Smart meetings

Meetings can be disruptive. Excessive meetings reduce productivity and often add little value. Poorly run meetings can leave people frustrated and disengaged.

So, what can you change? Consider rethinking meetings for a remote-first organisation. Our tips include:

• Create an agenda, then cancel the meeting if it can be handled async

• Set shorter time limits to keep discussions focused and efficient

• Rotate essential calls to suit different time zones

• Allow people who aren’t contributing to leave meetings

• Schedule bonding and fun face time so work meetings can be shorter and less frequent

Run remote meetings with these tips in mind, and meetings will become useful forums rather than drains on time.

Supportive management

Without face-to-face contact it’s harder to spot signs of stress and burnout. Managers of remote teams should be vigilant about how quickly burnout can spread and take steps to prevent it.

That could involve:

• Keeping tabs on employee workloads

• Setting realistic deadlines

• Scheduling team activities that aren’t work-related

• Encouraging employees to take breaks and annual leave

• Model good life–work balance so staff don’t feel pressured to skip breaks

Support employees to prevent burnout; they’ll be more productive and more likely to stay with your company.

How flexible work practices can help you retain top global talent

Employees value flexibility, remote work, async hours, and autonomy. Running operations with a remote-first mindset lets you offer those benefits while boosting productivity, customer responsiveness, and accountability.

Flexible working: a top priority for remote workers

Flexible working — the freedom to choose where, how, and when you work — is a top priority for many employees.

Remote’s Global Benefits Report found flexibility matters to everyone, especially women and younger workers. Women often shoulder more home responsibilities, so flexibility helps them balance these demands. Younger people tend to be more mobile, so flexibility helps them build the lives they want while growing with your organisation.

Our Global Benefits Report emphasised the importance of flexible working for remote roles and distributed teams.

This information should inform both recruitment and pay strategies.

You need to proactively prevent top performers from looking elsewhere. Discover what your star staff value most and make targeted improvements to demonstrate care and loyalty.

Offering clearer promotion pathways, performance-based pay increases, and more flexible conditions to retain top talent will usually cost less and take less time than replacing key people.

Flexible work is top priority for 29% of employees

But flexibility isn’t just for a minority: it benefits everyone.

More flexible organisations adapt better to tough times and seize new opportunities more readily. How can you offer the flexibility employees want? For many groups, the chance to work flexibly is decisive. Overall, 29% of employees rank it as a top consideration, with higher numbers in certain subgroups: Contractors 38% (their #1 consideration); Gen Z 35% (their #3); Women 32% (their #4).

Offer work conditions that top talent is seeking

Sixty-nine percent of employers believe they offer flexible working, but only 47% of employees say they actually receive it.

There’s a clear gap between the flexibility leaders think they provide and what employees experience. This could be due to different definitions of flexibility or senior leaders having a different day-to-day experience to most staff. Whatever the cause, employers must close this gap or risk rising dissatisfaction and turnover. Otherwise, investment in flexible initiatives may go unrecognised.

Hidden retention benefits of offering autonomy

Autonomy and trust are key drivers of workplace happiness. How do you build a culture around them?

It depends on transparency, clear communication, and meaningful support. That combination fosters psychological safety, so employees feel confident and able to deliver their best work.

How to improve your flexible working benefits

Flexible working shouldn’t undermine team cohesion or career progression. If remote workers get flexibility but see others receiving pay rises and promotions, they may feel penalised and look elsewhere.

By contrast, 45% of on-site employees rank telecommuting as a top-tier perk (nearly as important as core benefits like private medical insurance and paid holidays). The message for global employers is clear: when top talent is satisfied with an employer’s flexible conditions, they’re generally happy with the wider benefits package.

The cost-saving benefit of a flexible working offer

Alongside being a top perk, flexible working can give you more latitude when structuring global compensation.

Remote workers often rate telecommuting as their most valued perk — almost as important as core benefits like private medical insurance and paid leave. So long as their remote-work needs are met, they’re usually content with the broader benefits package.

Rhiannon Payne, Remote Work Advocate

For many remote employees, remote work is the benefit they prize most, so they’re less critical of the rest of an employer’s compensation package.

Only 36% of remote employees list benefits and perks among their top considerations when evaluating a job offer. By comparison, 45% of on-site employees see telecommuting as a top-tier perk (almost as important as private medical insurance and paid holidays).

The takeaway for global employers is clear. If top talent is satisfied with an employer’s flexible conditions, they’re generally satisfied with the overall benefits package.

Hear from the experts on managing a global benefits plan by watching Remote’s on-demand global benefits webinar.

You should be able to trust your employees from day one. If you can’t, why did you hire them? Providing trust early and measuring outcomes instead of hours creates an excellent environment for most people, while quickly revealing any who abuse that freedom.

Job van der Voort, CEO of Remote

How to foster transparency and trust for remote and global teams

Remote teams perform best when everyone knows what’s happening. Transparency before, during, and after work is the best way to create cohesion.

Create clear project outlines and set expectations

If someone wants the latest on a project, they should be able to check public documentation. Performance data should be available as well.

Let employees design their workdays

Some are night owls, others early risers. Some work in bursts and reserve energy for peak times. So long as everyone documents and communicates, different patterns work together.

Record, write, and inform

Keep everyone across time zones informed by recording meetings and posting regular updates in public spaces like open Slack channels. Tag people often and create a culture where staff can read updates when convenient rather than staying glued to screens.

Communicate in public forums

Communication should be transparent, searchable, and accessible. Instead of DMs, post in a public Slack channel or Notion page and tag the person. That way anyone interested can easily find the information.

Build connections by using face time to bond

Don’t use valuable shared time for work that can be done async. Reserve 1:1s and team sessions for bonding, games, and check-ins, and use documentation for collaborative work that doesn’t require everyone online together.

Demonstrate respect

Respect time zones, preferred hours, and remote-work feedback. Stay open to changes and improvements. Responsive leaders make all team members feel empowered to do their best while keeping a healthy life–work balance.

Start implementing these retention tactics to keep star performers

Retaining remote talent today is challenging, but we hope this guide has given you plenty of practical actions to try.

With this guide at your hands, you now know:

• Why remote staff retention is important

• How to calculate your staff retention rate

• What makes a remote employee want to stay at your company

• Actionable tactics to improve retention for your remote workforce

The tips in this guide will help you, but there’s always more to learn! If you’re hiring globally, you can always contact Remote to make it easy to onboard, pay, and manage your remote workforce. We can even help you prepare and structure competitive offers in new places so your global compensation plan remains effective and compliant.