What Makes An Employee Stay In Company ?

Employee retention is an important consideration for businesses of all sizes. High turnover rates can result in greater expenses, lower productivity, and the loss of critical institutional knowledge. Understanding what drives employees to stay is critical for building a great work environment and cultivating long-term loyalty.

Recruiting elite talent is one difficulty; keeping them is another. Understanding what motivates people to stay is crucial for decreasing churn, developing culture, and scaling sustainably, especially in startups where uncertainty is inherent.

Below, we’ll unpack eight key factors that influence employee retention, and back each with a real-world business case study to give you actionable insights.

1. Paid Well

Money isn’t everything — but it sets the stage.

While passion, purpose, and personal growth play a huge role in long-term loyalty, fair and competitive compensation reflects how much a company values its people. Underpaying talent often leads to resentment, burnout, or poaching by competitors.

How to do this ?

• Competitive Compensation: Offering a salary and benefits package that is competitive within the industry and the local market is fundamental. Employees need to feel that their work is valued financially. This includes not only base salary but also bonuses, profit-sharing, and other financial incentives.
• Regular Reviews and Raises: Implementing a system for regular performance reviews and salary adjustments ensures that employees are rewarded for their growth and contributions. This demonstrates that the company is invested in their long-term financial well-being.
• Benefits Package: A comprehensive benefits package, including health insurance, retirement plans, paid time off, and other perks, can significantly impact an employee’s decision to stay. These benefits provide a sense of security and demonstrate that the company cares about their overall well-being.
• Transparency and Fairness: Employees should understand how their compensation is determined and perceive the process as fair and equitable. Transparency in pay practices can build trust and reduce feelings of being undervalued.

Case Study: Netflix

Netflix is renowned not just for its content but also for its compensation strategy. They follow a “top of market” pay philosophy, where employees are paid at the top of their personal market range. According to former Chief Talent Officer Patty McCord, the idea was simple: if you’re worth more elsewhere, Netflix should be the one paying that amount already.

This approach gave employees fewer reasons to explore outside opportunities and more motivation to stay and excel. It also made it easier to attract top-tier candidates — especially critical in a competitive space like tech and entertainment.

Takeaway:

Pay competitively, transparently, and proactively — especially for mission-critical roles. If you can’t afford to pay “top of market” salaries, consider equity, performance bonuses, or profit-sharing as viable motivators.

2. Mentored

People stay where they are led, not just managed.

Mentorship builds long-term commitment by showing employees that their development is personally important to leadership. A mentor is a guide, a sounding board, and often a role model — which creates trust and a sense of belonging.

How to do this ?

• Guidance and Support: Mentorship provides employees with guidance and support from experienced individuals within the company. This can help them navigate challenges, develop new skills, and advance their careers.
• Skill Development: Mentors can help employees identify their strengths and weaknesses, set goals, and create a plan for professional development. This investment in their growth can increase their job satisfaction and commitment to the company.
• Networking Opportunities: Mentorship can also provide employees with valuable networking opportunities, connecting them with other professionals within the organization and the industry.
• Two-Way Street: Effective mentorship involves a two-way relationship, where both the mentor and mentee benefit from the exchange of knowledge and perspectives.
• Formal vs. Informal: Mentorship can take many forms, from formal programs with structured meetings to informal relationships that develop organically. Both can be valuable.

Case Study: HubSpot

HubSpot, the inbound marketing giant, fosters mentorship in all its teams. In its early days, co-founders Dharmesh Shah and Brian Halligan encouraged a “mentor the next you” culture, where leaders actively nurtured talent not only to execute tasks but to grow into future managers.

Today, they use both formal and informal mentorships — pairing new hires with seasoned employees, and creating structured development plans. Their efforts show: in 2023, HubSpot was named one of the top places to work globally.

Takeaway:

Build a mentorship framework — formal or informal — and ensure that leadership sees coaching as part of their job, not an optional extra.

3. Challenged

Employees who are not challenged will seek that stimulation elsewhere.

Monotony and lack of complexity lead to disengagement. High-performing employees, in particular, want opportunities to push boundaries, solve hard problems, and innovate.

How to do this ?

• Meaningful Work: Employees are more likely to stay with a company if they feel that their work is meaningful and contributes to the overall success of the organization.
• Growth Opportunities: Providing opportunities for employees to learn new skills, take on new responsibilities, and expand their knowledge is crucial. Employees who feel that they are growing professionally are more likely to be engaged and motivated.
• Stretch Assignments: Offering “stretch assignments” that challenge employees to step outside their comfort zones can help them develop new skills and build confidence.
• Innovation and Creativity: Encouraging employees to be innovative and creative in their work can make their jobs more stimulating and rewarding.
• Problem-Solving: Presenting employees with complex problems to solve can provide a sense of accomplishment and intellectual stimulation.

Case Study: SpaceX

Elon Musk’s SpaceX has one of the most intense and challenging work environments in the world. Engineers and employees at all levels are thrown into complex, high-stakes problems like rocket reusability and Mars colonization.

While the pressure is high, the reward — intellectual stimulation and the chance to change the future — has kept some of the best aerospace and software minds committed for years. One engineer said in an interview, “It’s hard work, but we’re solving problems that no one else has ever solved.”

Takeaway:

Design roles that evolve, rotate responsibilities, and allow space for experimentation. Push employees outside their comfort zones — with the right support.

4. Appreciated

Gratitude is the simplest, most undervalued retention strategy.

Recognition validates effort. Employees who feel that their work is seen and appreciated are significantly more likely to stay, even through difficult periods.

How to do this ?

• Recognition of Achievements: Recognizing and appreciating employees’ efforts and achievements, both big and small, is essential for boosting morale and motivation.
• Verbal Praise: Simple verbal praise and acknowledgment can go a long way in making employees feel valued.
• Formal Recognition Programs: Implementing formal recognition programs, such as “Employee of the Month” awards or peer-to-peer recognition platforms, can provide a structured way to celebrate employee contributions.
• Tangible Rewards: Providing tangible rewards, such as bonuses, gift cards, or extra time off, can further reinforce positive behavior and demonstrate appreciation.
• Personalized Acknowledgement: Tailoring recognition to individual preferences can make it more meaningful. Some employees may prefer public praise, while others may appreciate a private thank-you note.

Case Study: Zappos

Zappos has baked appreciation into its DNA. CEO Tony Hsieh believed that a happy employee creates a happy customer. At Zappos, employees receive shout-outs, surprise bonuses, and peer recognition through their internal platform. There’s even a tradition called “Zollars,” where employees can award each other virtual currency that can be turned into prizes or perks.

This culture of appreciation — not just from the top down, but across departments — has made Zappos a consistently top-rated place to work.

Takeaway:

Encourage a culture where appreciation is regular, specific, and comes from both peers and managers. A simple “thank you” can carry more weight than a promotion.

5. Valued

It’s not just what they do — it’s who they are.

Being appreciated means your work is noticed. But feeling valued means your presence matters. Employees want to feel like a critical piece of the puzzle, not just a replaceable cog.

How to do this ?

• Respect and Consideration: Treating employees with respect and consideration is fundamental to creating a positive work environment. This includes listening to their opinions, valuing their contributions, and being empathetic to their needs.
• Inclusive Culture: Fostering an inclusive culture where all employees feel welcome, respected, and valued for their unique perspectives and backgrounds is essential.
• Work-Life Balance: Recognizing and supporting employees’ need for a healthy work-life balance demonstrates that the company values their overall well-being. This can include flexible work arrangements, generous paid time off, and wellness programs.
• Open Communication: Creating a culture of open and honest communication, where employees feel comfortable sharing their ideas and concerns, is crucial for building trust and fostering a sense of belonging.
• Employee Input: Seeking and acting upon employee feedback demonstrates that their opinions are valued and that they have a voice in the organization.

Case Study: Basecamp

Basecamp (now 37signals) has always taken a people-first approach. Even when controversial decisions were made — like moving away from internal social-political discussions — their transparency and commitment to their core team values never wavered.

They’ve built an environment where employees are consulted on big decisions, their feedback shapes product direction, and their individuality is respected. This long-term mindset has resulted in extremely low turnover rates — and employees who’ve been with the company for over a decade.

Takeaway:

Include employees in key conversations. Recognize not just their output, but their input — their opinions, creativity, and emotional contributions.

6. Empowered

Control breeds commitment.

Micromanagement kills morale. Empowered employees, on the other hand, feel trusted to own outcomes. They operate with a sense of autonomy, pride, and creative freedom.

How to do this ?

• Autonomy and Ownership: Empowering employees to take ownership of their work and make decisions gives them a sense of control and responsibility.
• Decision-Making Authority: Providing employees with the authority to make decisions within their areas of expertise can increase their confidence and engagement.
• Resources and Support: Ensuring that employees have the resources and support they need to succeed in their roles is essential for empowerment.
• Delegation: Effective delegation allows managers to empower their team members, giving them opportunities to grow and develop new skills.
• Trust and Accountability: Empowerment requires trust in employees’ abilities and a clear understanding of accountability.

Case Study: Atlassian

Atlassian, the software company behind Jira and Trello, gives teams a high degree of autonomy. They encourage “ship-it” days where teams can build and deploy solutions without red tape. Managers serve more as coaches than commanders.

This empowerment leads to innovation — many features in Jira and Confluence were born out of ideas from junior engineers and product managers. With a culture built on ownership, Atlassian boasts both high retention and high employee engagement.

Takeaway:

Let people own decisions, make mistakes, and learn. Build a framework for autonomy rather than dictation.

7. Trusted

Trust is a silent contract that keeps people loyal.

Trust means giving employees the benefit of the doubt — in how they manage time, deliver results, and even handle setbacks. When employees feel trusted, they reciprocate with loyalty and accountability.

How to do this ?

• Trust in Leadership: Employees need to trust their leaders to be honest, transparent, and have their best interests at heart.
• Trust Among Colleagues: A culture of trust among colleagues is essential for effective teamwork and collaboration.
• Open and Honest Communication: Open and honest communication is the foundation of trust. Leaders and employees should feel comfortable sharing information, ideas, and concerns.
• Integrity: Maintaining high ethical standards and demonstrating integrity in all actions is crucial for building and maintaining trust.
• Consistency: Consistent behavior and decision-making from leaders and colleagues help to build trust over time.

Case Study: Automattic

Automattic, the company behind WordPress.com, is 100% remote and has been for years. Founder Matt Mullenweg believes deeply in the power of trust. Employees set their schedules, choose their tools, and work independently — often across time zones.

Despite being spread globally, Automattic maintains tight-knit teams. The secret? Trust and asynchronous collaboration tools. Employees aren’t micromanaged. They’re expected to perform — and they do, often going above and beyond.

Takeaway:

Hire people you trust. Then let them prove you right. Establish check-ins, not checkpoints.

8. Grow

Growth is the most powerful form of retention.

Stagnation is a dealbreaker. Employees — especially younger generations — crave continuous development, new challenges, and upward mobility.

How to do this ?

• Career Development: Providing opportunities for employees to advance their careers within the company is essential for long-term retention. This can include promotions, lateral moves, and opportunities to take on new challenges.
• Learning and Development: Investing in employee learning and development through training programs, workshops, and conferences demonstrates a commitment to their growth and can increase their job satisfaction.
• Internal Mobility: Facilitating internal mobility allows employees to explore different roles and departments within the company, providing them with new challenges and growth opportunities.
• Succession Planning: Having a clear succession plan in place shows employees that there are opportunities for advancement within the organization.
• Personal Growth: Supporting employees’ personal growth and development, such as through tuition reimbursement or wellness programs, can also contribute to their overall satisfaction and loyalty.

Case Study: LinkedIn

LinkedIn has an internal slogan: “Next Play.” Coined by CEO Jeff Weiner, it refers to the company’s commitment to helping employees define their next career step — even if it’s outside LinkedIn.

They invest heavily in learning — from LinkedIn Learning to leadership development tracks. As a result, employees feel like their career is advancing, not stagnating — and LinkedIn consistently ranks as a top employer for career development.

Ironically, by preparing employees to leave, they’ve helped them stay longer.

Takeaway:

Give your team learning budgets, cross-functional projects, promotion pathways, and new responsibilities. Growth doesn’t always mean title change — it can mean skill expansion or leadership opportunities.

Finally, Culture is the Glue !

Retention doesn’t come down to perks, ping-pong tables, or free snacks. It comes down to respect, growth, and meaning. In startups, where the grind is real and the future is uncertain, these eight factors become your defense against talent churn.

In today’s talent-driven economy, investing in people isn’t just HR’s job — it’s the CEO’s strategic advantage.