Employee Turnover Costs Escalate for Canadian Businesses in 2026
A significant new survey reveals that Canadian companies are facing mounting financial pressures from employee turnover, with costs rising and expectations pointing toward increased departures in the coming year.
Survey Highlights Growing Turnover Concerns
According to the Express Employment Professionals-Harris Poll survey conducted in late 2025, nearly one in three hiring managers across Canada (28%) anticipate employee turnover will increase in 2026. This concern is particularly pronounced among larger organizations, where 37% of companies with 100 or more employees expect turnover to rise, compared to just 22% of small businesses with 10 or fewer employees.
The financial impact of this trend is becoming increasingly substantial. The average cost of employee turnover has climbed to $30,680, up from $29,234 in the previous year. This represents a significant expense for companies already navigating a competitive labour market.
Key Drivers Behind Expected Turnover Increase
Employers who anticipate higher turnover in 2026 cite several primary factors:
- Increased workplace demands leading to more vacancies (29%)
- Competitive job market conditions, rising from 23% last year to 29% currently
- Employee retirements accounting for 26% of expected turnover
- Better compensation and benefits offered by competing employers (24%)
Wage Expectations Diverge Between Employers and Job Seekers
As companies respond to these labour market pressures, wage increases appear likely in 2026. Most hiring managers (67%) report that wages are poised to increase, while only 27% expect no change.
However, job seekers hold a more reserved view of compensation trends. Only 39% expect wages to increase, while 51% anticipate they will remain the same this year.
Supporting these employer expectations, Mercer's Canada Compensation Planning Survey indicates that while total wage growth has remained relatively flat, the average total projected salary increase for 2026 is estimated around 3%.
Company Culture as Strategic Investment
Bob Funk Jr., CEO, President and Chairman of Express Employment International, emphasized the importance of workplace culture in addressing turnover challenges. "These findings reinforce something leaders have known intuitively for years — strong company culture isn't just good for people. It's good for business," Funk stated.
He added, "When employees feel supported and connected to a healthy work environment, turnover naturally declines. In a year when the cost of replacing a single employee continues to climb, culture has become one of the most financially sound investments any organization can make."
Survey Methodology Details
The Job Insights survey was conducted online within Canada by The Harris Poll on behalf of Express Employment Professionals from November 3 to 19, 2025, among 504 Canadian hiring decision-makers.
A companion Job Seeker Report was conducted online within Canada by The Harris Poll from November 7 to 21, 2025, among 502 adults ages 18 and older.
These findings highlight the growing financial and operational challenges Canadian companies face in retaining talent, with implications for business strategy, compensation planning, and workplace culture development throughout 2026.
