Retention in 2026: What actually keeps people engaged?

Our recent Summer 2026 What the Buck? market survey shows professionals are feeling more confident than last year.

That doesn’t always show up immediately in resignation numbers. But it’s there. And we’ve seen this before: when confidence lifts, movement follows.

Right now, retention feels… manageable.

Our latest What the Buck? data shows that 24% of employers say retaining high-quality talent is “much easier or easier” than it was this time last year (down significantly from 2025). Meanwhile, the proportion of employers who say retention is “about the same” has increased this year.

We’re seeing a similar pattern in hiring. Fewer employers feel “very confident” about filling roles, with more employers shifting into the “somewhat confident” category. Hiring hasn’t become harder overnight but there’s more caution beneath the surface.

And retention is no different because while things may feel steady right now, the fundamentals haven’t changed:

• the right talent is still hard to find (candidates with the right mix of capability, experience and commercial impact)
• expectations are still rising on both sides (employers and candidates)
• and competition has grown (not just locally, but globally)

Employee retention may feel manageable now but as demand for high quality talent grows, we anticipate retention challenges will intensify once again.

What keeps people engaged at work?

One of the biggest shifts we’re seeing is in what actually keeps people engaged.

For a long time, retention conversations were led by salary increases but that’s no longer the case.

Today, the priorities look different:

• Flexible working arrangements remains the #1 employee driver (consistent with last year).
• Supportive leadership & management has moved into 2nd place.
• Salary increases has dropped to 3rd.
• Recognition & appreciation of work are becoming increasingly important.

Salary still matters, but it’s become the baseline not the differentiator. Or in other words: Salary gets people in the door but it doesn’t keep them there.

Leadership quality, management capability, and the day-to-day employee experience are becoming far more important drivers of engagement and retention.

The good news for businesses? In this environment, organisations that invest in strong leadership and meaningful recognition can compete just as effectively (if not more so) than those relying on pay alone.

From the candidates POV

In a market where there’s been a lot of uncertainty, many people are taking a more considered approach to their careers. People are still open to moving but they’re being more selective.

Candidates are not just asking: “What’s the salary?”

They’re also asking questions like:

• Will I be supported by my manager?
• Is there room to grow here?
• Does this align with where I want to go long-term?

Which means candidate decisions are more considered and intentional.

Why most retention strategies don’t work

When retention becomes a problem, the default response is reactive (counteroffers, salary increases, offering additional benefits…) and while these might work in the short term, they rarely address the real issue:

• lack of development
• misalignment with leadership
• unclear expectations (uncertainty or lack of clarity)
• or a better long-term fit elsewhere

This is the shift we’re seeing in the market. The organisations that are getting retention right are the ones that know that the right hire stays longer, and that starts with getting the right match from day one.

The organisations that hold onto their best people are the ones who got the hiring decision right in the first place – those who hired for long-term fit, set clear expectations from day one, and built the kind of leadership environment that makes people want to stay.

If you’d like to explore what’s happening across the NZ job market in more depth, our Summer 2026 What the Buck? report is out now – register here for a copy.

As always, if you’re thinking about hiring (or your next career move), our specialist consultants are ready to support you.

To get more insights like this, subscribe to our newsletter or follow us on LinkedIn for the latest updates.