Organizations today face mounting pressure to address employee retention and workplace culture as we navigate a complex labor market. According to McLean & Company’s HR Trends Report 2025, retaining employees and developing leadership pipelines are now top priorities for employers, surpassing recruitment concerns. Poor retention and an unhealthy workplace culture are not just operational issues—they are costly, with turnover expenses ranging from $10,000 to $23,000 per employee.
An unhealthy workplace culture contributes significantly to employee burnout and disengagement, which affects both morale and productivity. The HR Trends Report 2025 highlights that 31% of employees report high levels of stress, with over half of those individuals feeling disengaged.
“Additionally, companies with strong workplace cultures see up to four times the revenue growth of those with weak cultures.”
Often leaders look at production and operation infrastructure to improve financial outcomes for their organization and consider the people dynamics as secondary in importance. The truth is, this is no longer true, especially with Millennials and Gen Z now making up an increasing share of the workforce. Lagging profits, poor customer service, high turnover, and mediocre employee productivity are symptoms of a deeper challenge, a challenge that is not as simple to fix and requires leaders to look in the mirror.
Three Strategies for Leaders to Improve Retention
Model the Desired Culture Leaders play a pivotal role in shaping culture, with 70% of employee engagement variance directly linked to managerial behavior. Modeling authenticity, transparency, and empathy sets the tone for the entire organization.
Prioritize Psychological Safety A culture of safety enables employees to express themselves without fear of judgment. Using frameworks like the SCARF model by David Rock can help leaders nurture environments where trust and collaboration flourish.
Invest in Effective Leadership Development Leadership gaps often exacerbate retention challenges. A robust development pipeline ensures managers are equipped to inspire and support their teams effectively, aligning individual growth with organizational goals. However, not all training is created equal. Look for training that includes:
30-50% Evidence-Based content and 50-70% Application
A focus on driving change and sustainability vs just delivering content
Consultants who offer metrics and data to demonstrate the impact of training.
Multiple engagements over a one-time information dump
Track record of producing change for organizations
The cost of inaction is steep, but the rewards of investing in culture and leadership are immeasurable. If you are curious about the real numbers, simply Email COST in the subject line and I will send you my Culture Cost Calculator with no strings attached! Email to nickistraza@strazasolutions.com
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