As the year winds down, many business leaders start thinking about performance reviews, open enrollment, and year-end reporting. But it’s also one of the best times to step back and think about something just as important: employee retention.
Employee turnover is expensive. Studies consistently show that replacing a single salaried employee can cost a business anywhere from 50% to 200% of that employee’s annual salary. For small and mid-size companies, this financial hit can be devastating, halting momentum and straining existing teams.
The good news? You don’t have to wait until January first to launch your 2026 retention strategy. By taking proactive steps today, you can stabilize your workforce and hit the ground running in the new year.
Overlooked Drivers of Employee Turnover (and How a PEO Can Help)
Many small and mid-size businesses assume employees leave solely for more money or better job titles. While compensation is vital, the biggest drivers of turnover often stem from overlooked deficiencies in communication and employee experience.
1. Listening and Acting on Employee Feedback
One of the biggest drivers of turnover isn’t pay or workload—it’s feeling unheard. Companies that lack a framework for identifying what frustrates their employees often see higher turnover. What’s even worse is when organizations collect employee feedback and then don’t do anything about it.
How LBMC EP Helps: We offer robust performance management tools that include built-in survey capabilities, allowing you to easily engage with your staff. But we don’t stop there. Our HR Business Partners work alongside you to interpret the results and turn feedback into meaningful change.
2. Offering Competitive Benefits Packages
Compensation will always matter, but benefits are playing a bigger role than ever before in employee decisions. A 2024 MetLife study found that 73% of employees say a strong benefits package keeps them more loyal to their employer. For many small and mid-size companies, offering competitive benefits can feel out of reach. That’s where a PEO can make a big difference.
How LBMC EP Helps: Through our PEO services, clients gain access to national, large-group benefit options that rival those of much bigger employers. That means better medical, dental, vision, and ancillary benefits at a lower overall cost. When employees see that their employer is investing in their well-being, it builds loyalty that money alone can’t buy.
3. Maximizing the Employee Experience Through Benefits Education
Most employees only focus on the monthly premium and deductible during open enrollment (OE), completely overlooking other services available to them. Many medical plans include valuable benefits that employees don’t even know about, like behavioral health support, chiropractic care, or telemedicine options. Taking time to educate your team about what’s available helps them see the full value of their benefits package.
How LBMC EP Helps: We manage the entire open enrollment process, ensuring a smooth and clear experience. We take on the burden of employee education regarding benefits packages, life insurance, and other programs. We’ve observed that when employees truly understand their total compensation package, they recognize the full value of staying with your company.
4. Evaluating Compensation Intentionally
Compensation evaluation should be an ongoing, thoughtful process, not a reactive one. Employees need to know they are being rewarded fairly and consistently for their great work.
How LBMC EP Helps: Our HR Business Partners help you develop clear compensation frameworks, ensure job descriptions are accurate and current, and assist in designing bonus structures and incentive programs. When employees understand how their performance ties to recognition and reward, motivation naturally follows.
5. Prioritizing Manager Development
As the saying goes, “People leave managers, not companies.” Managers are the daily face of your culture. If they are poorly trained in feedback, delegation, or coaching, retention will suffer.
How LBMC EP Helps: We offer development resources and guidance to train your managers on effective leadership, communication, and performance coaching. Empowering your middle management to lead well is one of the most effective long-term retention strategies available.
What You Can Do Now
Even if you’re reading this in November or December, there’s still time to make meaningful progress before 2026. Here are a few actions to take now:
- Review your benefits package and make sure employees understand what’s available to them.
- Listen to employees during annual reviews and communicate next steps based on the information you collect.
- Evaluate your compensation and recognition strategy to ensure fairness and transparency.
- Assess your onboarding and open enrollment process to reduce confusion and increase employee satisfaction.
- Consider the value of a PEO partnership—especially before open enrollment—to consolidate HR, payroll, and benefits under one roof.
Start the Year with a Strong Employee Retention Strategy
By addressing the underlying concerns of value, appreciation, and communication—and by leveraging the HR and benefits expertise of a PEO—you can transform your retention strategy.
Working with LBMC EP can allow you to strategically invest in the platforms and incentives that keep your top talent engaged and committed for years to come.
If you need expert guidance to build a culture that retains your best employees in 2026, connect with the LBMC EP team today to find the right plan for your business.
