Retention trends 2026: attrition rates data and employee retention strategies

What's a "good" attrition rate? Are you losing more talent than your competitors?

For People Leaders, understanding employee retention trends is critical.

High attrition means expensive replacements, productivity losses, and remaining team members left picking up the slack.

So, to help, let's look at the latest attrition data across European tech – including what's driving the departures companies don't want – as well as advice on proven strategies for retaining your top talent.

What is the average attrition rate in 2026?

The average attrition rate across European tech in 2026 is 11.1% (source: Ravio Compensation Trends 2027).

This is calculated as the percentage of employees who have left their employer in the last 12 months (to Q3 2026).

That's down from 17.4% in 2025 and 18.0% in 2024 – and well below the 27% seen in 2023.

So, overall, employees are staying put.

The drop in attrition mirrors a slower hiring market – with fewer companies hiring, there are fewer opportunities to move to, and many employees are choosing security and stability over a move. The exception to this is AI talent, where the hiring market is still moving at a rapid pace.

What is the average attrition rate in the UK?

In the UK, the average attrition rate in 2026 is 12.1%, down from 18.8% in 2025 – slightly above the European average of 11.1%, but still slower than usual (source: Ravio Compensation Trends 2027).

How do employee attrition rates vary per country?

Attrition has fallen in every market this year, ranging from 7.3% in France to 15.3% in Germany (source: Ravio Compensation Trends 2027).

France has seen the sharpest drop, with attrition halving to 7.3% – now the lowest of the six markets, alongside Sweden (8.6%).

Germany now has the highest attrition, at 15.3%, having seen the smallest decline of any market (-16%).

How do employee attrition rates vary per job function?

Attrition fell across every function this year, with Engineering lowest at 7.5% and Sales and Relationship Management highest at 12.4% (source: Ravio Compensation Trends 2027).

Engineering continues to show the strongest retention, now for a third consecutive year – in line with Engineering also having one of the lowest hiring rates this year, as engineers stay put. For companies, this means if you’re needing to hire Engineering talent, you’ll find a tough market and may need to explore more competitive salaries or total compensation for Software Engineers.

Sales roles still see the most movement, with 12.4% of employees leaving their role this year, but this still represents a large drop in attrition since last year.

How do employee attrition rates vary per funding stage?

Late-stage companies saw the biggest drop in attrition this year, down to 10.5% – now very similar to growth-stage companies. Early-stage companies have the highest attrition, at 12.1% (source: Ravio Compensation Trends 2027).

Early-stage companies have also seen average employee tenure fall this year, the only funding stage to do so.

Elena Pantazi, Head of Talent & Portfolio Development at Northzone, isn't surprised.

"There's much more movement happening at early startups right now, because there are so many exciting new AI products for people to jump to," she says.

Why are employees leaving roles in 2026?

Most attrition this year wasn't the kind that companies want to avoid. For 54% of companies, unregretted resignations were the primary driver of attrition, and for a further 24% it was company-wide layoffs.

Only 21% say regretted resignations – people they wanted to keep – were the main driver (source: Ravio Compensation Trends 2027).

Layoffs are a much bigger factor at larger companies – 35% of companies with 500-1,999 employees cite company-wide layoffs as a primary driver, compared with 11% of companies under 100 employees.

Where companies did lose people they wanted to retain, the reasons were overwhelmingly about a better opportunity elsewhere (73%) – which itself suggests a difficulty to compete, whether on compensation, company mission, career progression, or something else.

The second biggest driver of regretted attrition is pay. 42% say base salary wasn't competitive enough to retain those employees, highlighting the importance of reward in improving retention.

What are companies doing to improve retention?

Career development is the biggest lever companies plan to pull for retention next year (54%), with AI upskilling in second place (31%) – which Elena Pantazi at Northzone sees as a major lever to pull, because “it addresses the most pressing employee anxiety of staying relevant in the workforce in the age of AI”, whilst also benefitting companies with deepening AI capabilities.

Compensation levers trail some way behind – just 13% plan to increase salaries.

There's a tension here worth noticing: regretted leavers often cite pay (42%), but very few companies plan to use pay as a retention lever (13%).

Career development addresses the biggest driver – a better opportunity elsewhere – but if your salaries have fallen behind the market or you don’t have a clear approach for promotion raises, it won't close that gap on its own.

Retention strategies: How to improve employee retention rates

Understanding attrition rates provides important context to benchmark your company’s employee retention, but what can you actually do to help retain your top talent?

Based on insights from Ravio's network of Reward Leaders, here are six proven retention strategies.

Employee retention strategy 1: Ensure competitive pay for priority roles

When companies lose people they wanted to keep, pay is the second most common reason – 42% say regretted leavers' base salary wasn't competitive enough.

Ravio's 2026 Compensation Trends report included an analysis on the link between market-leading salaries and employee retention, which found that employees paid above market (>55th percentile) have the lowest share of departures, while employees paid below market are the most likely to leave a role in the first 12 months. So, market-leading salaries do increase employee retention.

However, this relationship isn't uniform across all roles. The impact of competitive pay on retention is particularly significant for Support career track roles and early career professionals (P1 and P2 levels).

For Management track and senior professional roles (P3+), other factors like career progression, equity compensation, and strategic influence seem to matter more than base salary market positioning.

The lesson here is that competitive pay is crucial for retention, but, rather than trying to pay everyone above market, identify priority roles where attrition is particularly painful for the business, and focus your compensation budget there. To work out whether pay is actually behind your attrition, see our guide to telling if pay is impacting retention.

Evert Kraav, Head of Compensation & Benefits at Bolt, recommends being deliberate about which roles get a premium.

"Every company should identify their own business-critical roles and pay them at P60 or P75. The days of paying everyone at median are over – that's a recipe for losing your key talent," he says.

"Whether it's engineering at a tech startup or operations at a logistics company, invest in the roles that drive your success."

Employee retention strategy 2: Get clear on the ‘why’ behind attrition risk

But before reaching for pay for every attrition scare, check it's really the problem.

Henriette Zimmer, VP People at Nofence, finds a pay rise only retains someone when two things are true: the root issue really is compensation, and everything else – the work, the manager relationship, the role – is broadly fine.

"When the pay concern is sitting on top of something else – a difficult manager relationship, a role someone has outgrown – the adjustment buys time but not commitment, and they’ll usually leave in six to twelve months," she says.

The signs that pay genuinely is the issue tend to show up as patterns rather than one-off resignations:

• Several leavers in the same role, level, or location going to higher-paying jobs
• Offers being declined on pay, or hiring managers regularly needing exceptions to close candidates
• Experienced employees clustering at the bottom of their salary bands
• New hires earning close to, or more than, longer-tenured colleagues doing the same work – in Ravio's data, new P3 Software Engineers were paid 12.3% more than existing employees in February 2026

And when you do make an adjustment, look beyond the individual. "If the market has moved for them, the question is: are there others in exactly the same position where the risk just isn’t visible yet?" says Henriette. "If yes and you don't address it, you may have added a new internal pay equity problem on top of the old one."

For a step-by-step approach, see our guides to telling if pay is impacting retention and why a pay rise won't always fix retention.

Employee retention strategy 3: Pull multiple Total Rewards levers (not just salary)

Competitive base salary matters, but relying solely on salary increases means you’re limited by budget, as well as the need to ensure fair and consistent pay across the team.

So, look at other levers to pull across your Total Rewards offering:

• Equity refresh grants. Additional equity granted to existing employees extends vesting incentives, particularly powerful for retention as it gives employees continued financial upside tied to company success.
• Performance bonuses. One-off bonuses reward contributions without permanently increasing payroll costs, and can be structured to recognise both individual performance and/or company success.
• Enhanced benefits tailored to your culture. Rather than copying what big tech companies offer, design employee benefits that authentically address your team's needs – like co-working space stipends for distributed teams, inclusive parental leave policies for companies prioritising diversity, or paid sabbaticals for young travel-focused teams. Benefits that solve real problems for your specific team become genuine retention tools.
• Flexible working. Work-life balance now ranks higher than salary for many employees. Thoughtful flexible working policies that provide employees with a better work-life balance, whilst retaining meaningful collaboration time with teammates, can be more effective for retention than salary bumps.
• Career development opportunities. Investment in L&D, secondments, stretch projects, and clear progression pathways all contribute to employees feeling invested in and valued.

The key is tailoring your approach to what your specific employees actually value, rather than implementing generic perks.

Make sure employees actually know what they have, too.

Gina Trautwein, Senior Compensation & Benefits Partner at Staffbase, often finds that at-risk employees don't know the vesting schedule or value of the equity they already hold. "If someone's only weighing base salary against a competing offer, we've failed to communicate the rest of it – the equity vesting next year, generous PTO, the flexwork allowance or growth budget," she says. "It's a communications job as much as a comp one."

And if you use retention bonuses, pair them with a plan. Every retention bonus at Staffbase now comes with a documented risk-mitigation and succession plan – knowledge transfer, cross-training, a named successor, and a target date – so the time the bonus buys is actually used to remove the dependency.

Employee retention strategy 4: Communicate your compensation strategy clearly

Even the most competitive, well-designed compensation strategy fails if employees don't understand it. When compensation decisions feel opaque or arbitrary, employees assume favouritism, bias, or randomness – eroding trust and driving them to look elsewhere.

Transparent communication builds trust.

Help employees understand how decisions are made: target percentiles, market benchmarks, the role of performance. Share your compensation philosophy during onboarding to set expectations early. Explain your approach to salary reviews in all-hands meetings so everyone hears the same message.

When employees understand the framework, they're less likely to assume unfairness, and so it’s less likely to lead to looking elsewhere.

Manager enablement is equally critical.

Many pay and progression conversations happen in 1:1s between managers and direct reports. When managers fumble these discussions, avoid difficult feedback, or can't explain the "why" behind decisions, employees lose trust. Equip managers with talking points, role-play difficult scenarios in training, and provide clear guidelines on what they can and can't promise.

Employee retention strategy 5: Provide clarity on career progression

Career progression is the retention lever most companies are reaching for – 54% plan to invest in career development next year, and 35% say a lack of career progression was behind their regretted leavers.

But progression isn't only about opportunities – it's about whether people can see them. Leah Sutton, Chief Portfolio Talent Officer at Balderton Capital, thinks a lot of perceived lack of progression is really a communication gap.

"A lot of what looks like lack of career progression causing attrition is really a mismatch between communication and actual opportunity," she says.

"I'd be curious how many people saying there's no opportunity have simply never had a productive conversation with their manager."

Employees need to understand not just where they are today, but where they can go and how to get there, with:

• Clear levelling frameworks. Job levels should define the competencies, skills, and business impact expected at each level, giving employees a roadmap for progression.
• Performance development, not just performance management. Performance management looks backwards at what someone achieved. Performance development looks forwards at how to help them grow. The most effective retention strategies focus on the latter – understanding what employees want from their next career step and actively supporting them to get there.
• Investment in growth opportunities. This includes formal L&D programmes, but also stretch projects, cross-functional exposure, and opportunities to develop new skills or take on additional responsibilities.
• Ownership and impact. Giving employees genuine ownership over outcomes and visible impact on company success creates strong retention even when compensation budgets are tight, because the team feels invested in business outcomes.

Career progression isn't just about promotions – it's about employees feeling they're developing, growing, and moving towards something meaningful in their career.

Employee retention strategy 6: Invest in AI upskilling

AI upskilling is now the second most common retention action companies are planning (31%). For Elena Pantazi at Northzone, that's because it speaks to a more pressing worry for employees than pay.

"AI is resetting what 'doing the job well' means – there's a new bar for productivity, and a whole new skill and set of tools to learn," she says.

"Pay doesn't help you feel like you're keeping up with that, which is probably why upskilling is beating comp as a retention lever this year: it addresses the more pressing anxiety of staying relevant in the workforce."

How you run it matters, too. At Storyblok, Paula Aragon, Senior Total Rewards Specialist, found that mixed sessions could backfire.

"One thing we adjusted recently was to split our AI learning sessions by team, because when engineers and non-technical people are in the same room, the non-technical folks feel like they're behind," she says.

"Separating them means everyone's comparing themselves to people solving similar problems, which lands a lot better."

Employee retention strategy 7: Build a culture of recognition and continuous feedback

Employees who feel undervalued or uncertain about their performance are more likely to leave – regular recognition and feedback throughout the year builds the engagement and connection that drives retention.

Recognition programmes make appreciation consistent rather than annual. Peer-to-peer recognition platforms, monthly awards, or celebrating wins in team meetings all work – what matters is that employees feel valued for their contributions year-round, not just during performance reviews.

Regular feedback from managers reinforces this. Weekly 1:1s, quick check-ins after milestones, or informal praise when someone does great work keeps employees informed about where they stand. When feedback is timely and specific throughout the year, top performers don't quietly job-hunt because they feel unappreciated or uncertain about their future.

This culture of continuous feedback also builds the trust needed for difficult conversations. When budget constraints limit salary increases or performance issues arise, the foundation of ongoing communication means these conversations feel like part of an existing dialogue rather than a surprise attack.

FAQs

What is attrition rate?

Attrition rate refers to the percentage of employees who have left their employer in a given period, typically measured annually. Attrition includes all employee departures – ‘voluntary’ attrition like resignations, retirements, and end of contract, and ‘involuntary’ attrition like redundancies or firings. According to Ravio's 2027 Compensation Trends report, the attrition rate across European tech in 2026 is 11.1%.

How do you calculate employee attrition rate?

The formula for calculating attrition rate is: (Number of employees who left / Average number of employees) × 100. This gives you the attrition rate as a percentage.

For example, if 111 employees left over 12 months and your average headcount was 1,000, your attrition rate would be 11.1% – in line with the European tech average in 2026.

What is the average attrition rate in the UK?

The average attrition rate in the UK in 2026 is 12.1%, according to Ravio's 2027 Compensation Trends report. That's down from 18.8% in 2025, and slightly above the European tech average of 11.1%.

What is the difference between attrition rate and turnover rate?

Attrition rate and turnover rate are often used interchangeably and both measure the percentage of employees leaving an organisation. However, some HR professionals distinguish between them: attrition typically refers to positions that aren't refilled (reducing overall headcount), whilst turnover includes all departures regardless of whether positions are replaced. In practice, most organisations use these terms to mean the same thing.

What is a good attrition rate?

A "good" attrition rate depends on your industry, location, and company stage. According to Ravio data, the average attrition rate across European tech in 2026 is 11.1%. But, average attrition varies significantly by function – Engineering sees the lowest at 7.5%, whilst Sales and Relationship Management sees the highest at 12.4%.

What matters most is the mix: in 2026, only 21% of companies say regretted resignations were their main source of attrition. A low overall rate can still hide a problem if the people leaving are the ones you most wanted to keep.

What is a high attrition rate?

In European tech, an attrition rate well above the 2026 average of 11.1% – for example, above 15% – would be considered high, though it depends on your function mix and company stage. Sales teams and early-stage companies typically see more movement than Engineering teams or later-stage companies.

What is regretted attrition?

Regretted attrition is when employees you wanted to keep choose to leave – typically strong performers or people in business-critical roles. It's a more useful retention measure than overall attrition, because it filters out unregretted resignations and planned exits. In 2026, 21% of companies say regretted resignations were their primary driver of attrition, most often because of a better opportunity elsewhere (73%) or uncompetitive base salary (42%).

What is employee retention?

Employee retention refers to an organisation's ability to keep its employees over time. While attrition measures employees leaving, retention measures employees staying. High retention indicates employees are satisfied and engaged, whilst low retention signals potential issues with compensation, culture, management, or career progression opportunities.

Why is employee retention important?

Employee retention is important because high attrition creates significant costs and disruption. Replacing an employee typically costs up to twice their annual salary when you factor in recruitment, onboarding, lost productivity, and the time it takes for new hires to reach full effectiveness – impacting the ability to achieve business goals. High attrition also impacts remaining team members who must cover additional work, and can damage company culture and institutional knowledge.

How can we improve employee retention and motivation?

Improving employee retention requires a multi-faceted approach. Six proven strategies are:

1. Ensure competitive pay for priority roles where data shows clear retention impact, particularly for support functions and early-career employees.
2. Pull multiple Total Rewards levers beyond just salary – equity refreshers, performance bonuses, tailored benefits, flexible working, and development opportunities.
3. Communicate your compensation strategy clearly so employees understand how decisions are made and trust the process.
4. Provide clarity on career progression with clear levelling frameworks and ongoing development conversations.
5. Invest in AI upskilling, so employees feel they're keeping up as their roles change.
6. Build a culture of recognition and continuous feedback where employees feel valued year-round, not just during annual reviews.