Survey looks at top factors driving employee turnover
Employee turnover is becoming more expensive for Canadian companies as nearly one in three hiring managers expect departures to increase this year, according to a new survey.
The average cost of turnover has risen to $30,680 per employee, up from $29,234 a year ago, adding pressure on organisations already competing fiercely for talent in a tight labour market.
Larger employers are the most concerned. Among companies with 100 or more employees, 37 per cent of hiring managers expect turnover to rise in 2026. By contrast, only 22 per cent of small businesses with 10 or fewer employees anticipate higher turnover.
The findings are based on a survey released by by Express Employment Professionals of 504 Canadian hiring decision-makers between Nov. 3 and 19, 2025. A separate Job Seeker Report surveyed 502 Canadian adults from Nov. 7 to 21, 2025.
What's driving employee turnover?
According to the report, among employers who expect turnover to increase this year, 29 per cent point to increased workplace demands leading to more vacancies, while another 29 per cent cite a more competitive job market, up from 23 per cent last year.
Retirement is also a factor, with 26 per cent of those anticipating higher turnover attributing it to employees exiting the workforce. A further 24 per cent expect to lose staff to better pay and benefits offered elsewhere.
Express says the data underscores the business impact of workplace culture at a time when the financial cost of replacing staff is escalating.
“These findings reinforce something leaders have known intuitively for years — strong company culture isn’t just good for people. It’s good for business,” says Bob Funk Jr., CEO, President and Chairman of Express Employment International, the parent company of Express Employment Professionals.
“When employees feel supported and connected to a healthy work environment, turnover naturally declines,” Funk said. “In a year when the cost of replacing a single employee continues to climb, culture has become one of the most financially sound investments any organization can make.”
When it comes to employee turnover, the loss of a star can create a vacuum, impacting not just sales or client relationships, but also the morale of those who may feel overshadowed or undervalued, according to one expert.
Wage expectations gap
The Express survey also reveals a gap between employer and job seeker expectations on wages in 2026.
Two-thirds of hiring managers (67 per cent) say wages are likely to increase this year, while 27 per cent expect no change. Job seekers are more cautious: only 39 per centexpect wages to rise, and a majority (51 per cent) believe pay will stay the same.
Express Employment Professionals notes that this divergence in expectations could affect both recruitment and retention if workers do not see pay moving in line with their perceptions of workload and living costs.
How can employers improve retention?
Here’s how employers can improve retention in 2026, according to an O.C. Tanner article:
- Ensure competitive pay and strong health benefits so people feel financially secure, then invest in career development, skill building and regular recognition.
- Combat pessimism about the future by helping employees set clear, achievable goals and showing believable paths to reach them (pathway thinking), while building their confidence to follow those paths (agency thinking).
- Spend time understanding employees’ roles, constraints and aspirations, and involve them in decisions that affect their work.
- Provide transparent, fair access to flexibility in when, where and how people work, rather than ad hoc exceptions.
- Build connection, community, development and flexibility into every promotion, lateral move and role change.
- Implement a robust recognition programme where leaders regularly and specifically acknowledge contributions.
“More than pay and benefits, employee retention strategies should include modern leadership, development opportunities, mental health support, and giving employees a say on how and where they work. Even physical factors, like the work environment and technologies a company chooses can affect whether employees will want to stay long term,” says O.C. Tanner.
“Organizations can invest in various strategies to build workplace cultures where employees thrive and want to stay.”
Retaining talent is the top operational challenge facing human resources teams over the next 6 months, according to a recent report, according to a previous report.
