The global competition for talent has entered a new phase: the fight against workforce disengagement. Employee engagement globally dropped to 21% in 2024, costing the world economy an estimated $438 billion in lost productivity.

In larger economies, a disengaged employee means reduced productivity. But in Malta, where the talent pool is limited, disengagement is a crisis, because replacing skilled professionals takes time, is costly and disrupts both operations and client relationships.

Therefore, understanding what drives employee retention is now essential. It directly impacts profitability, operational consistency, and long-term competitiveness.

This guide outlines key employee retention factors, and practical steps that can help employers in Malta build workplaces where talented people choose to stay.

The True Cost of Losing Employees

Many organisations underestimate the full cost of staff turnover, often focusing only on recruitment fees.

  • Direct costs: recruitment, advertising, onboarding, and training.

  • Indirect costs: reduced productivity, lower morale, and the loss of institutional knowledge. When the workload increases for other employees in the team, this can have a ripple effect if a replacement is not found immediately, leading to more people from the same team leaving.

The greatest impact often lies in what’s hardest to measure - the experience, client relationships, and practical know-how that leave with departing employees.

In small markets like Malta, reputation carries real weight. Word spreads quickly, and once a business becomes known as a place where people rarely stay long, attracting and keeping talent becomes slower and more costly.

The Top Employee Retention Factors

Employee loyalty today depends on a modern, multi-dimensional value proposition that goes beyond salary. Below are the five key retention factors shaping 2026.

1. Fair Pay and Transparency

Pay remains fundamental, but it’s not the only driver of job changes. According to the KonnektTalexio Candidate Survey 2025 conducted by Esprimi, salary and benefits ranked as the top motivator for 65% of respondents when considering a job change in Malta.

However, flexibility (51%) and career advancement opportunities (46%) closely followed, showing that financial rewards alone don’t secure loyalty. The same survey found that location flexibility and company reputation also heavily influence application decisions, highlighting that employees in Malta value balance, growth, and trust just as much as pay.

2. Career Growth and Development

Career progression is one of the strongest motivators for job movement in Malta. The KonnektTalexio Candidate Survey 2025 by Esprimi found that 46% of respondents listed career advancement among the top three reasons for considering a job change, just behind salary and flexibility. When employees can’t see a path to grow, they begin to look elsewhere.

That shows that internal mobility becomes a strategic advantage. Investing in clear career paths, mentoring, and training helps retain skilled employees and reduces reliance on a limited external talent pool. Growth opportunities don’t just fill skill gaps but they give people a tangible reason to build their future within the organisation.

3. Recognition and Manager Quality

According to the Gallup's State of the Global Workplace: 2025 Report, managers are responsible for up to 70% of team engagement, and disengaged leaders rarely manage to retain engaged teams.

Recognition plays a major role: employees who genuinely feel appreciated are less likely to leave.

Regular, meaningful recognition, especially peer-to-peer, builds both motivation and connection. However, the biggest opportunity lies in developing managers, as coaching and leadership training deliver the strongest return on retention.

4. Flexibility and Work-Life Balance

Flexibility is now a core expectation. The KonnektTalexio Candidate Survey 2025 found that flexibility and remote working ranked as the second most important factor (51%) when considering a job change, just after salary and benefits. It was also among the top perks of choice, with 74% of respondents preferring flexible working hours and 62% valuing remote work options in their ideal job offer.

These findings show that flexibility directly shapes how attractive an employer appears in Malta’s market. Companies that design roles around clear communication norms, purposeful collaboration, and supportive management can meet this demand without losing productivity.

In 2025, the real question isn’t where people work but it is how you help them perform and feel supported, wherever they are.

From experience working closely with candidates, flexibility has become so important that many are willing to move even for a slightly lower salary if the role offers better balance and trust.

5. Culture, Belonging, and Purpose

Company culture is one of the strongest factors influencing job choices in Malta. Our study found that company culture, reputation, and leadership quality were key considerations for 19% of respondents when deciding to change jobs, while team dynamics and relationships were the main reasons people preferred working for local companies.

In Malta’s multicultural market, where foreign professionals make up around 40% of the workforce, belonging and appreciation are vital for retention. Creating a workplace where people feel included, supported, and connected reduces turnover and strengthens long-term commitment.

Purpose adds an additional layer. When employees understand how their work contributes to a meaningful goal, motivation and engagement rise, turning culture from an abstract concept into a tangible business advantage.

At Konnekt we see that what pushes people away, regardless of pay, is the feeling that they are not being heard. When employees feel ignored, especially when their feedback is meant to help the organisation improve, disengagement accelerates.

How to Identify Your Retention Gaps

You can’t fix what you can’t measure. Start by running a retention audit that combines both data and employee feedback.

Step 1 – Quantitative Data (What’s happening):

  • Overall turnover rate
  • Voluntary vs. involuntary exits
  • First-year attrition
  • Regrettable turnover (high performers)

Step 2 – Qualitative Data (Why it’s happening):

  • Pulse and engagement surveys such as Talexio Team Voice
  • Stay interviews with key employees
  • Exit interview analysis to identify recurring themes

Patterns such as high turnover under a particular manager or consistently low “belonging” scores are clear warning signs. This kind of diagnostic approach turns HR data into a predictive tool, allowing you to act before resignations begin.

Turning Insight into Action

Understanding why people stay is only half the challenge - hiring people who are likely to stay is the other half.

Retention-focused hiring begins long before a contract is signed. In our work at Konnekt, we see the difference it makes when the recruitment process stays aligned from the very start. Clear expectations about work environment, flexibility, career paths, and salary drastically reduce the risk of early turnover.

At Konnekt, we regularly communicate with both the employer and the candidate to ensure long term success for both.

  • Hiring for Growth: We identify candidates whose career goals align with your organisation’s development opportunities.
  • Hiring for Culture: Our approach looks beyond technical skills to assess purpose and cultural fit.
  • Setting Realistic Expectations: We make sure every candidate understands the role and working environment clearly, reducing the risk of early turnover.

What also differentiates our approach is what happens after a candidate joins. The first months are critical, and staying connected with both sides during that period helps prevent misunderstandings, encourages integration, and strengthens long-term commitment.

The most powerful retention strategy remains simple: listen to your people. Staying close to market data, understanding shifting employee expectations, and adapting quickly to new ways of working give companies a real competitive edge, especially in a market as tight as ours.

Author: Nicole Hili, Recruitment Specialist at Konnekt, dedicated to helping people find roles where they can succeed. She believes recruitment is more than filling vacancies - it’s about building strong relationships and creating opportunities for long-term success.