2025 Midyear Attraction and Retention Strategies are a top priority for organizations navigating a stabilizing yet uncertain labor market. Attraction and retention remain two of the most important aspects of running an organization in 2025, as employers strive to find and keep skilled workers amid economic uncertainty, inflation, and rising health care costs.
Zywave’s 2025 State of the Market Survey found that employers ranked attraction and retention as their fourth-highest business challenge, just behind economic uncertainty, inflation, and rising health care costs.
While most employers do not expect drastic changes to the labor market like those seen in recent years, some skepticism remains. This article highlights five leading strategies employers are pursuing to boost employee attraction and retention in the second half of the year.
About 60% of employers still struggle with attracting and retaining employees in 2025, according to Zywave’s survey.
Also, 65% of employers expect these challenges to “stay about the same” in 2025. Of those who expect change, only 9% expect conditions to improve, whereas almost 20% expect them to become worse.
1. Focusing on Employee Engagement
With employee engagement reports showing levels near a record low, employers have an opportunity to engage employees to retain more employees and support overall business health. According to a report from Gallup published in early 2025, the percentage of engaged employees fell to 31% in late 2024 from 33% in 2023. It was the lowest level of employe engagement recorded in a decade. Similarly, a recent report from Glassdoor found that employee confidence reached a record low in May 2025.
While employees are now more likely to stay in their current jobs, they may not be satisfied with their role or their employer. This means employers may face lower productivity and a damaged workplace culture, which can lead to attraction and retention difficulties.
Engagement efforts may be employers’ go-to strategy right now since this approach can have fewer cost requirements than other key strategies like significant compensation raises, which isn’t feasible for all organizations. Employee engagement can help win over workers but can also bring benefits to employers who want a happy and committed workforce.
2. Raising Employee Compensation
Compensation remains a critical factor in winning over workers. While significant pay raises won’t be feasible for all employers, they remain one of the best ways to attract and retain talent. Employers will likely continue increasing wages to keep up with inflation and remain competitive in the labor market.
Estimates show that employers were planning 3%-4% wage increases in 2025. Although this is down from previous years in a worker-friendly labor market, this figure still exceeds the most recent inflation readings. Furthermore, WTW’s most recent survey revealed that U.S. employers forecast average wage increases of 3.5% in 2026. As employers execute their 2025 strategies and begin planning for 2026, compensation will remain critical for winning over workers.
3. Offering L&D Opportunities
Employers who strategically leverage learning and development (L&D) opportunities (e.g., career pathing, mentoring and microlearning) can create resilient and high-performing work environments where employees thrive and grow while meeting organizational goals and needs.
In 2025, L&D opportunities surrounding technology and artificial intelligence (AI) are gaining traction. Efforts to upskill employers in skills currently in demand can help employees grow their careers while benefiting employers. Rather than hiring high-demand skill sets, L&D programs targeted at in-demand skills can help employers address skills gaps and meet their organizations’ needs.
4. Redesigning Onboarding and Orientation Programs
An employee’s first 90 days are arguably the most important period for retention. As such, employers are finding that redesigning or building structured onboarding and orientation processes is a low-cost way to engage and retain employees more effectively.
5. Using Skills-based Hiring
Skills-based hiring has been a growing trend for years, and this survey revealed that it’s become a common attraction and retention strategy for employers. Now, many are expanding their talent pool by hiring for open positions based on skills rather than education or experience. Many employers in this survey shared concerns about the lack of qualified candidates; skills-based hiring may help them find solid candidates they weren’t considering before. It may also help employers hire workers who have in-demand skills, such as AI proficiency, but lack college degrees or long lists of qualifications.
While finding, hiring and keeping talent are crucial, many of the strategies that employers are exploring also have the potential to drive better organizational outcomes.
Attracting and retaining employees continues to be a top business challenge for most employers. For the remainder of the year, employers should understand how the market is shifting while focusing on new talent strategies. The best actions will vary by workplace, as employers are challenged to meet the desires of today’s workforce while pursuing feasible strategies that make sense for their organization.
These findings highlight why 2025 midyear attraction and retention strategies must focus on engagement, compensation balance, and long-term workforce planning.
Employers can stay one step ahead by understanding today’s labor challenges and monitoring talent trends. This can inform strategies to effectively meet the unique needs of current and prospective employees.
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