Key factors for employee retention and satisfaction – and compliance

As we speed into a new year, it is beneficial to take some time to consider the ways in which we can use legal tools available to strengthen our staffing and ensure that our employment relationships are as strong as they can be.  

Considering how we can support our workforces going into the new year and ensure that they are feeling values and supported will have several benefits including improved workplace culture, increased productivity, and positive brand ambassadorship (which attracts even more solid talent). While these aims may appear to be more in the “workplace culture” or “employee health and wellness” category, they very much involve legal considerations and risk mitigation benefits.  

Employee retention is a critical challenge for Canadian organizations, especially in a labour market defined by diversity along with rapid technological and legislative changes, and increasingly high expectations for workplace culture and employee safety and well-being. Ensuring employees feel well-treated isn’t just a matter of ethics — it’s a strategic imperative that directly impacts productivity, innovation, and your bottom line. Furthermore, ensuring a safe, fair and equitable workplace is a legal requirement in Canada. 

Here are some key considerations to bear in mind: 

Continue to foster diversity, equity and inclusion (DEI) 

Despite commentary to the contrary, DEI remains a critical facet of your effective workplace strategy. It is an expectation in Canada’s multicultural society and must remain reflected in its workplaces. Employees expect respect for their backgrounds and identities, and human rights laws that protect those rights are getting stronger, not weaker. 

Those organizations that move to dismantle DEI or water it down do so at their own peril. By backtracking on DEI initiatives, organizations actually create increased risk of discrimination complaints. By doing away with a proper and defined DEI program, organizations do away with the focal point necessary to ensure that they are making fair workplace decisions without any intentional or unintentional biases. DEI programs create a clear framework with checks on innate or explicit bias, and discriminatory decision-making to ensure that hiring, promotions, work allocation, compensation, and other issues are dealt with fairly. This minimizes the potential for complaints of discrimination, violations of pay equity legislation, and the like. 

DEI initiatives are a key to increased engagement, retention, and employee satisfaction. When employees feel their perspectives and identities are valued and respected, they are more likely to stay and contribute meaningfully. However, DEI initiatives are also a legal guardrail in the sense that they provide a very effective check on discriminatory decision-making and minimize the risk of claims and complaints.  

Practical steps to fostering your DEI efforts: 

• Implement regular DEI training and awareness programs for staff. 

• Ensure that your hiring, promotion, and compensation practices are fair and transparent in 2026 and let people know how so. 

• Create employee resource groups and forums for open dialogue. 

Invest in professional growth and development 

Continued improvement, education, and growth remains a key motivator for many Canadian workers. Employees who see a future for themselves within an organization are less likely to leave. Canadian companies that prioritize ongoing learning and development not only enhance employee skills but also signal a commitment to their long-term success. While there is a strong business case for offering professional growth and development opportunities, it is also important to ensure that these programs are offered in a way that is fair and mutually beneficial for both the employer and the employee.  

How to fairly foster growth and development: 

• Going into 2026, ensure that you offer trainings, workshops, and access to industry certifications where possible. 

• Support mentorship and coaching programs (whether internally and/or externally). 

• Encourage employees to set and pursue career goals with support from inside the organization including resources to help them achieve these goals. 

• When offering significant opportunities for education or professional development, ensure that you are not just effectively making your staff more marketable candidates on the open market. Consider whether you would like to tie such support to a written “earn out” or “repayment” agreements. In these written agreements, employers agree to provide the employee with a particular amount of financial support for their development, while the employee agrees to remain with the organization for a particular time or else they will have to repay all or some of the funding. Such agreements are a great legal tool to ensure a fairness, mutual benefit and protection for both employers and employees. 

Prioritize psychological safety and wellbeing 

As we move deeper into a new year, psychological safety is more than a buzzword; it is an expectation. As mentioned above, employers have a statutory obligation to provide a safe and healthy workplace for all employees. 

By proactively creating a workplace where employees feel safe, comfortable expressing ideas and raising concerns, and making mistakes without fear of retribution, you increase their inclusion and cohesion with the organization. Furthermore, you will be taking a proactive step that will minimize the potential for allegations of a toxic workplace, constructive dismissal, or workplace harassment or bullying. 

Steps to prioritize psychological safety and wellbeing: 

• Review and update policies against bullying, harassment, and discrimination (or put them in place if you haven’t already). 

• Provide access to mental health resources and employee assistance programs. 

• Train managers to recognize signs of stress and intervene supportively. 

• Document the above steps and formalize them. Doing so ensures that you will have evidence about the steps you have taken to ensure worker safety and wellbeing, but it will also help these processes to become part of the innate fabric and processes of the organization.   

Offer competitive terms (not just bonuses) 

As you will undoubtedly have experienced, employees are motivated by different things. While historically a monetary bonus was a very effective incentive, it no longer has the impact that an extra week of time off might have for employees.  

Therefore, while employees expect fair pay for work, be sure to consider what may motivate staff. It may not be simply more money. Opportunities for education, paid time off or other perks may very well help reward and incentivize staff.  

Considerations: 

• Ensure that you are competitive in terms of providing compensation that meets or exceeds industry standards and adjust it as needed. 

• Provide perks and benefits that reflect employee needs, such as additional paid time off, educational or other opportunities, improved health coverage, retirement plans, and wellness programs. 

• Use fair and transparent policies and contract terms to ensure that these additional perks are mutually fair and will not be abused or lead to unnecessary payments. 

• Communicate openly about compensation policies and changes, and let staff know that these considerations and the workforce are important to the organization. 

By continuing to foster DEI initiatives, support employee growth, prioritize wellbeing, and celebrate their staff and their accomplishments, companies can create workplaces where employees want to stay and thrive. Creating clear and fair contractual language and policy terms will then help to ensure that the organization’s intentions are documented, which will minimize legal risk and ensure that the obligations and terms only apply as and when intended.