Why Recognition is Your Best Retention Strategy in 2025

The 2025 Retention Crisis: What’s Really Driving Turnover

51% of employees plan to leave their jobs in 2025. Here’s why:  

1. Lack of Engagement: Disengagement leads to decreased job satisfaction and drives people to seek more fulfilling opportunities. Gallup reports a global engagement rate of just 21%, costing businesses an estimated $438 billion annually in lost productivity.

2. Limited Career Growth: Employees often leave when they feel their career is stagnant or opportunities for growth and advancement are limited.  

3. Poor Management: A lack of manager training and ineffective leadership often contribute to a negative work environment.

4. Compensation and Benefits: If businesses are not offering competitive salaries or benefits, employees are likely to look for better offers elsewhere.

5. Work-Life Balance: The rise of remote work has made employees more aware of the benefits of flexibility.

6. Job Insecurity: If employees feel their position is at risk or that their company is in decline, they are more likely to seek security elsewhere.  

7. Toxic Culture: Employees often leave jobs where they feel unsupported or disrespected.

8. Inadequate Recognition and Appreciation: Many employees feel undervalued, especially if they don’t receive consistent recognition, or don’t feel aligned to their organization’s purpose.

The 2025 retention crisis is a culmination of these factors, which highlight the need for companies to adapt and implement strategies that address these concerns, such as improving employee engagement, leadership, flexibility, and of course—recognition.  

Why Recognition Works When Raises Don’t

Engagement—not compensation—is the differentiator.  

Employees can shop around for a higher salary but finding an organization where they feel truly valued and engaged is much more difficult to find.

Employee engagement has become a top priority for organizations seeking to drive productivity, reduce turnover, and ultimately achieve success.  

One of the most powerful tools to boost employee engagement is employee recognition. Employees who routinely receive recognition are 2.7 times more engaged than employees who don’t.  

Managers play a significant role in this. Manager’s influence 70% of the variance in engagement, yet only 44% receive formal leadership training—this reveals a massive opportunity for more leader enablement.

Peer-to-peer recognition also drives deeper loyalty.

For example, at Wilson, engagement surveys consistently highlight Kudos as employees’ favorite form of recognition, especially when it comes from peers—not just managers.

The common theme here? Recognition works. People engage because of how they’ve been led, seen, heard, and supported through consistent, human-centric behavior.  

Real Results: How Kudos Clients Are Reducing Turnover

Oregon Community Credit Union — 95.6% Employee Retention

From fraud prevention to collaboration and milestones, Oregon Community Credit Union (OCCU) uses recognition to spotlight all wins—making appreciation a daily behavior, not just an annual event.

They also created custom badges in their Kudos platform that highlight behaviors aligned with their values like tenacity and humility, reinforcing culture while celebrating performance.  

Since 2021, over 100,000 recognition messages have been sent in their Kudos platform. OCCU has also achieved a best-in-class retention rate of 95.6% after implementing Kudos. With nearly 100% platform participation, engagement scores improved and turnover dropped.  

👉 Read more results and impact: How OCCU Fuels Engagement Through a Culture of Recognition

Uvalde Memorial Hospital — Reduced First-Year Turnover

At Uvalde Memorial Hospital (UMH), managers are expected to use their full Kudos points each month to ensure consistent recognition across roles and departments.  

UMH has seen a significant reduction in first-year turnover after emphasizing peer and manager recognition. They also scored in the 99th percentile for engagement on internal surveys.  

Engagement metrics like event participation and internal survey results consistently show upward trends year-over-year.

👉 Read more results and impact: Uvalde Memorial Hospital Uses Recognition to Build a Healthy Workplace Culture

Wilson — Built a Unified Global Recognition Culture

Wilson integrates Kudos into onboarding, recognizing new hires from the start to help build a culture of appreciation early on. Operating in over 65 countries, Wilson uses Kudos to unify their workforce.  

In internal engagement surveys, Kudos is consistently named the #1 way employees like to be recognized.  

👉 Read more results and impact: Wilson Powers a Distributed Workforce With Kudos

Highly engaged teams experience 18% lower turnover.

— Gallup Meta-Analysis

Proving ROI: Retention You Can Measure

According to the Society for Human Resource Management (SHRM), replacing an employee can cost between 50% to 200% of their annual salary, depending on the role.

We already know recognition has an undeniable impact on retention and other key performance indicators—but how do you measure it?

Demonstrating the return on investment (ROI) of employee recognition is crucial. Here’s an example of a calculation that allows you to easily quantify the ROI of recognition:

The calculation shows a substantial return on investment, emphasizing the effectiveness of recognition in creating a strong culture and fostering employee engagement.

Getting Started with Kudos

You don’t need a major overhaul to start improving retention through recognition.

Kudos takes the work out of recognition, making it simple to celebrate great work in the moment. With just a few clicks, anyone can send meaningful, personalized recognition, whether it’s for everyday wins or major achievements.  

Recognition isn’t about saying “good job” once a year. It’s about building a culture where employees feel seen, valued, and connected every day. Whether you're managing a hospital, a credit union, or a global talent team, strategic appreciation can be your most cost-effective retention tool yet.  

🎥 Watch our product demo video to see Kudos in action.