Employers brace for higher churn as replacement costs climb and pay pressures build into 2026
Employee turnover now costs employers an average of $30,680 per departure, adding pressure to already tight labour budgets and benefits plans, according to a new Express Employment Professionals-Harris Poll survey.
Almost one in three hiring managers across the country (28 percent) expect employee turnover to increase this year, as per the survey, underscoring growing concern about retention in a competitive labour landscape.
Larger organizations express the most anxiety, with 37 percent of companies with 100 or more employees expecting turnover to rise, compared with 22 percent of small businesses with 10 or fewer employees.
Among employers that anticipate higher turnover in 2026, 29 percent point to increased workplace demands leading to more vacancies, while another 29 percent cite a competitive job market, up from 23 percent last year.
Employers also attribute expected churn to demographic and compensation pressures: 26 percent link it to employees retiring, and 24 percent expect potential turnover because workers may find better pay and benefits elsewhere.
Most hiring managers (67 percent) say wages are likely to rise in 2026, while 27 percent foresee no change, according to the same survey. Job seekers take a more cautious stance: only 39 percent expect wages to increase, and 51 percent believe pay will stay the same this year.
Mercer’s Canada Compensation Planning Survey reports that total wage growth has remained relatively flat, with the average total projected salary increase in 2026 estimated at around 3 percent.
Bob Funk Jr., CEO, president and chair of Express Employment International, said the findings show that “strong company culture isn’t just good for people. It’s good for business.”
He added that “when employees feel supported and connected to a healthy work environment, turnover naturally declines,” and that in a year when replacement costs keep rising, culture has become “one of the most financially sound investments any organization can make.”
