Retention is key in 2026. But how can you improve it?

Something that has remained constant between 2025 and the start of 2026 is a subdued jobs market. 

There were 77,000 fewer vacancies at the end of 2025 compared to the beginning, and slightly more candidates (only by decimals which is a strange picture to imagine!)  for each job, up 1.8 to 2.2 – so this has moved a little in employers’ favour.

That said, recruitment will become riskier for you as we progress through 2026 and into 2027, with the spectre of employee unfair dismissal rights kicking in after six months instead of two years. And also the growing influence of AI – an article in The Economist recently cited research suggesting that as many as one in four applications may be from a bot before long!

We think all this means that retention is key for UK SMEs in 2026. And here are some top ideas for making sure your retention skills are top tier.

Regular performance reviews

We often talk about the value of making your performance reviews more than just an annual meeting. One survey, albeit American, found that 71% of organisations are still tied to the once-a-year model. You may still have a bigger annual meeting, which may tie in with pay reviews and promotions for example. But letting things drift between then will not serve you or them well.

Instead, why not find a way that works for your business to review things more frequently? Could a once a quarter check-in work? Or upon completion of certain projects? 

This allows for you to manage performance more proactively, guiding staff before bad habits become engrained or good work goes too long without recognition. It also gives them a formal platform on which to communicate back to you. This is a building block for keeping them engaged, a fundamental part of retention.

Training and opportunities

Training can take many guises, but it is essential for improving both your employees and the wider business. In fact, it may be the answer to many “people problems”, from more effective on-boarding to a behavioural issue, launching a new service to getting someone ready for a promotion.

On that note, ensuring there are appropriate opportunities for career progression is another crucial part of retention. Because if staff cannot see a way forward with you, that’s a surefire reason for them to look for a better opportunity elsewhere.

Going back to those performance reviews, do you learn from your employees what their ambitions are, and do you talk to them about if or how they can achieve that with you? That is a good place to start. Can you coach staff towards a particular promotion? Can you do more to advertise roles internally before an external search. This may be a cheaper and more successful option, although there could be downsides too.

Fostering a positive workplace culture

If you are bumping retention up your priority list, reviewing your company culture is a good place to start; and how your team perceive your culture. Is it conducive for people wanting to stick around, or should we say the RIGHT people wanting to stick around? 

Workplace culture encompasses a lot: how success is celebrated and problems are handled, how people talk and behave towards each other, organisational priorities such as customer service, staff training, corporate social responsibility and team spirit. We could go on.  

You and your staff may already be satisfied with what you have got, but if you feel change is required, get group input before setting out on your journey. You don’t want to build the wrong culture or something inauthentic to your business!

Open communication

We’ve listed this as a separate point to underline its importance, but really open communication underpins everything we have talked about. Understanding your staff’s ambitions and obstacles, sharing your own thoughts openly on what they do well and how they can improve. Ensuring everyone knows the direction of travel at your business, and what the goals are.

Help with retention in 2026

Everything we have discussed here we can help you with. From undertaking a company culture review to offering eLearning or in-person training, to putting processes in place for internal recruitment and helping improve performance reviews, we are here to help. So if you need to improve your retention, talk to us to find out what will work best for your business.