How to Improve Employee Retention in Remote European IT Teams

IT companies lose people faster than most other sectors. For example, in the US, the tech industry ranks among the top 3 for employee turnover, averaging 13.2%–18.3% in 2025. If you hire remote talent from Europe, you also face additional challenges. To address high turnover, let’s explore why and how to increase employee retention in steps.

Why is turnover higher in the IT industry?

Three main factors drive tech employees to leave: better offers elsewhere, limited growth opportunities, plus burnout and isolation. 👇

Better offers elsewhere

According to ISACA’s 2025 Tech Workplace and Culture Survey, 1 in 3 technology professionals changed jobs in the past two years. Meanwhile, 74% of companies report difficulty retaining IT talent. The main reasons include higher compensation, more challenging projects, and improved work–life balance at competing employers.

Limited growth opportunities

Career advancement remains one of the top reasons tech professionals leave their jobs. ISACA found that 30% of IT employees cite “no upward career path” and 24% report limited career opportunities. Similarly, the 2025 Job Seeker Nation Report shows that 31% of workers quit due to a lack of career growth.

Burnout and isolation

Tech roles continue to carry high stress levels. In Europe alone, 73% of IT professionals reported work-related stress or burnout in the survey by ISACA. Globally, Auvik’s IT Trends Industry Report found that 60% are experiencing at least moderate burnout. Heavy workloads, tight deadlines, and resource shortages are among the main causes.

How much does IT turnover actually cost?

Replacing skilled tech talent is far more expensive than most companies expect, between 50% and 200% of their annual salary, depending on role complexity and seniority.

For a software developer earning $120,000 per year, the total replacement cost typically ranges from $60,000 to $180,000 or even higher for senior engineers.

What these costs include:

• Recruitment and hiring expenses: Employee placement involves job ads, recruiter fees, IT job interviews, and onboarding.
• Lost productivity: It takes several months for a new hire to reach full productivity.
• Knowledge loss: When team members leave, they take with them critical product knowledge, architectural expertise, and client context.
• Team morale: Frequent departures erode trust and increase the workload for those who remain.

As you already know, the key to solving turnover is increasing employee retention. But first, let’s bring clarity to the term itself.

What does employee retention mean?

Quick definition: Employee retention is a company’s ability to keep skilled professionals engaged and committed over time.

Benefits of employee retention

For businesses with remote European teams, improved employee retention helps solve the biggest challenges of distributed work: employee departures, productivity loss, and constant re-hiring. It ensures project stability, preserves technical knowledge, and strengthens collaboration across borders.

Another benefit of employee retention is that it helps you reduce costs, protect client relationships, and build a more reliable international team.

How do you measure employee retention?

A core metric to measure is the employee retention rate. It shows the percentage of employees who stay at your company over a set time period (usually 1 year). Here’s the formula:

Retention rate = ((Employees at end of period – New hires during period) ÷ Employees at start of period) × 100

Example: You start the year with 100 employees, hire 20, and end with 105. Your retention rate is 85%.

How to calculate employee retention rate:

• Count employees on January 1: 100
• Count employees on December 31: 105
• Subtract new hires made during the year: 105 – 20 = 85
• Divide by starting count: 85 ÷ 100 = 0.85
• Multiply by 100: 85%

What is a good employee retention rate?

Employee retention rates above 90% are generally considered strong. In other words, an annual turnover below 10% indicates a healthy, stable workplace.

Approximate benchmarks by company stage:

• Startups (0–50 people): IT employee retention of 80–88% is normal due to rapid change and evolving roles.
• Growth-stage companies (50–200 people): 85–90% signals increasing stability and improving culture fit.
• Mature tech companies (200+ people): 90–94% is a solid target, showing a sustainable and engaged workforce.

But if, after calculating employee retention rate, you see it dropped below 80%, it’s a sign that deeper issues need immediate attention.

How do you improve employee retention? Let’s sort it out next.

How to improve employee retention in 2026

To increase employee retention, consider the following methods:

• Offer competitive compensation for European markets – to ensure employees feel fairly paid and valued.
  

• Create clear career paths – to give employees a sense of growth and long-term opportunity within the company.
  

• Embrace remote work flexibility – to let employees balance work and life, increasing satisfaction and commitment.
  

• Prevent burnout with work-life boundaries – to protect employee well-being and maintain consistent engagement.
  

• Build the connection across borders – to foster relationships, collaboration, and a sense of belonging in remote teams. 👇

1. Offer competitive compensation for European markets

Problem 👉Compensation continues to be the biggest HR challenge, even more than recruiting or retention, cited by 44% of HR leaders.

Action steps 👇

• Review salaries quarterly against market rates in your employees’ locations.
• Consider cost-of-living adjustments when setting salaries.
• Provide home office stipends ($500–$1,000 annually) for remote workers.
• Offer transparent salary bands to build trust.

2. Create clear career paths

Problem 👉94% of employees say they are more likely to stay at a company longer if it invests in their careers.

Action steps 👇

Structure career progression explicitly:

• Define levels (e.g., Junior → Mid → Senior → Lead).
• Document the skills required for each level.
• Share promotion timelines (typically 18–24 months between levels).

Next, invest in skill development. The best retention plans for employees include training budgets and mentorship programs.

Offer:

• Online certification budgets ($2,000–$5,000 per year).
• Conference attendance (virtual or in-person).
• Internal mentorship programs pairing juniors with seniors.
• Quarterly skill-building workshops.

Special consideration: Remote professionals quit managers, not companies. Effective managers communicate expectations transparently, offer constructive feedback regularly, and establish clear work-life boundaries.

3. Embrace remote work flexibility

Problem 👉 27% of employees across Europe consider flexibility, including work hours, a top factor when deciding to change jobs. 

Action steps 👇

• Allow choosing working hours within core overlap times (e.g., 10 AM — 2 PM CET).
• Provide asynchronous communication tools (Slack, Notion, Loom).
• Schedule meetings only during agreed core hours.
• Avoid surveillance tools, as they create distrust and drive turnover.

4. Prevent burnout with work-life boundaries

Problem 👉Fully remote workers report the highest engagement (31%) among work arrangements. Yet only 36% of them say they are “thriving” in life overall, compared with 42% among hybrid or on‑site‑remote‑capable workers.

Warning signs include:

• Employees work beyond contracted hours regularly.
• Late-night or weekend messages become normalized.
• Annual leave goes unused, depriving employees of rest and recovery.
• Team members show disengagement or reduced job performance.

Action steps👇

Set explicit boundaries:

• No-meeting Fridays for deep work.
• Required minimum vacation (20–25 days annually in Europe).
• “Right to disconnect” policies after the end of the workday.

Offer wellness support:

• Programs focused on overall employee wellness, such as physical, emotional, financial, social, community, and intellectual wellness.
• Mental health days (separate from sick leave).
• Employee Assistance Programs (EAPs): confidential counseling, stress management resources, and guidance for personal or work-related challenges.
• Virtual fitness or meditation app subscriptions.

Track workload proactively: Monitor pull request volumes, meeting hours, and project deadlines to identify overloaded team members before burnout occurs.

5. Build the connection across borders

Problem 👉Remote employees are more likely to report experiencing anger, sadness, and loneliness than hybrid and on-site workers. Physical distance can create mental distance.

Action steps 👇

Regular team interactions:

• Weekly team video calls (cameras encouraged but optional).
• Monthly virtual social events (game nights, coffee chats).
• Annual or bi-annual in-person team gatherings in Europe.

Foster peer recognition: Acknowledgment from colleagues significantly enhances employee retention in remote work contexts.

Create channels for:

• Shoutouts for great work.
• Cross-functional collaboration.
• Knowledge sharing sessions.

Promote transparent communication: Many IT professionals feel like they aren’t included in important business decisions. It makes them believe that company leaders see them as disposable.

Share:

• Company roadmap updates.
• Financial performance (when appropriate).
• Strategic decisions and reasoning.
• Individual impact on business goals.

Now that we know the methods, the question arises of how to use them and how to increase employee retention step by step. Learn below 👇

Your action plan for increasing employee retention

Our estimated plan to improve employee retention has three steps (note you should adjust it based on your specific situation):

• Assess and benchmark – to identify risks to employee retention and key drivers of turnover.
• Implement quick wins – to address immediate issues with salaries, career growth, and work-life balance.
• Build long-term systems – to create sustainable retention through manager training, feedback, and data-driven programs. 👇

Days 1-30: Assess and benchmark

Days 31-60: Implement quick wins

Days 61-90: Build long-term systems

When should you use a specialized tech recruiter?

Consider an outsourced recruitment agency if:

👉 You struggle to fill certain technical roles. Share those positions with the agency and dig into the root cause together. They understand market dynamics and can show how your situation stacks up against similar companies.

👉 You’re hiring across multiple European countries. Specialized agencies understand local labor laws, compliance requirements, and regional salary expectations. They also embrace cultural nuances in hiring and retention.

👉 You lack internal HR expertise for remote teams. Agencies provide valid ideas for employee retention and salary benchmarking data. Additionally, recruiting professionals offer candidate pre-screening for remote work fit and onboarding support.

👉 Your internal team lacks bandwidth. The global median time to hire is around 38 days, and for specialized roles, it can take even longer. Agencies accelerate this timeline significantly.

What to expect from a specialized agency:

• 90%+ probation pass rate (vs. 70-80% industry average).
• Candidate replacement guarantees.
• 80-85%+ employee retention after 12 months, and more.

Final thoughts

In summary, you can prevent turnover with the right employee retention planning. If you’re hiring remote IT professionals from Europe, success requires:

1. Competitive compensation matched to European markets (not US rates).
2. Explicit career paths that work for remote employees without office visibility.
3. True flexibility in work arrangements and hours.
4. Proactive burnout prevention with enforced boundaries.
5. Intentional connection across borders and time zones.

Ready to work toward increased employee retention?

Start with your retention rate calculation today. Then tackle your biggest gap, whether that’s compensation, career development, or something else. The companies that thrive aren’t those with the biggest budgets, but those that create daily moments of connection, recognition, and purpose.

Feeling that you need recruitment help? DNA325 has 9+ years of experience connecting US and European companies with IT talent across Europe. We prioritize finding the right long-term fit for you, so 79% of placed candidates remain with our clients for more than a year. 

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Frequently asked questions about employee retention