Everyone knows that retaining service workers over the holidays is hard. Some may decide they’d rather be shopping than working, while others adopt a “career change” as their New Year’s resolution. Regardless, as a small employer, you’re the one who has to pick up the slack.

But although holiday slumps are common, they’re not inevitable. In fact, if you address the challenge head-on, you can get ahead and keep your workforce intact into 2026. Based on our experience working with businesses across the Hudson Valley area for decades, here are four tips to improve talent retention over the holidays.

Key Takeaways

• Empowering employees with scheduling autonomy during the holidays shows respect for their personal lives and can reduce turnover.
• A one-size-fits-all approach doesn’t cut it. Tailored wellness programs and flexible benefits help employees feel supported when it matters most.
• Encouraging and enforcing paid time off (PTO) usage, while setting clear boundaries around work expectations, is key to preventing burnout and preserving morale.

Why Do Small Businesses Struggle to Retain Talent over the Holidays?

All businesses struggle to retain talent over the holidays; it’s one of those facts of life we all know to be true. But for small- and mid-size companies, a sudden surge in resignations is more than an inconvenience. It can cause serious problems: service disruptions, customer dissatisfaction, and the need to invest time and resources in replacing them.

Several factors cause service workers to exit over the holiday season, especially in retail and hospitality:

• Increased workload and burnout as employees try to satisfy higher commercial demand during the holidays
• Staffing shortages as companies struggle to attract part-time or seasonal workers to offset the increased demand, which can increase burnout among existing team members
• Tension between work obligations and personal commitments as employees request paid time off to travel or spend time with family
• Economic pressures keep smaller and mid-sized companies from offering more competitive wages, bonuses, and benefits that can help retain employees

4 Ways to Retain During the Holidays

Service workers are already prone to turnover, especially during a season where emotions are high and people are, let’s face it, likely to be difficult to work with. So what can you do to keep your team engaged, fend off burnout, and increase the chances of keeping them on board? Here are four strategies to start implementing today.

1. Empower Autonomy in Work Scheduling

By empowering autonomy in holiday work scheduling, employers can take a step toward respecting employees’ personal commitments and, in so doing, work to build trust with them. This, in turn, can help to enhance retention, especially during seasons when stress levels are at their peak:

• Implement intuitive self-scheduling platforms so employees can input their availability, preferences, and even pick or trade shifts when manager involvement is not needed
• Enable flexible shift options, where employees can choose shifts that line up with their personal lives and peak productivity times
• Use data-driven demand forecasting to ensure business needs are met (a simple example would be a restaurant adjusting evening shift start times on weekends)
• Offer on-call backup lists or automated alerts for sudden absences, enabling employees to jump in and choose shifts when there’s the opportunity to pick up more hours

Key for an autonomous employee scheduling model to work is open communication and policy clarity. Obviously, it’s important to meet scheduling needs and maintain workload coverage, but you can do so in a way that makes employees feel like their life outside work matters.

2. Personalized Well-Being Support

Caring about your employees as people, beyond the value they offer to the business, can go a long way to improve retention. It demonstrates you care for their individual well-being.

In 2025, however, well-being support goes beyond healthcare benefits. It requires a more comprehensive, holistic approach that’s tailored to each employee.

Mental Health and Wellness Programs	Includes access to therapy, meditation apps, and wellness days targeted to prevent burnout during challenging times like holidays.
Dynamic Well-Being Interventions	Rather than static programs, AI well-being programs continuously monitor workforce health indicators through anonymized data and real-time feedback to intervene with timely wellness.
Personalized Career and Development Support	Well-being also encompasses career fulfillment. AI-driven platforms deliver customized learning paths, coaching, and internal gig opportunities tailored to employees’ skills and ambitions.
Flexible Use of Wellness Funds	Employer-funded lifestyle spending accounts (LSAs) are an increasingly popular employee wellness strategy, which employees can spend flexibly on wellness, childcare, mental health, professional development, or even healthy food.

 

If you want to tailor these benefits to specific employees, this requires the use of AI-driven platforms that analyze employee data to build personalized benefits packages. This can be a heavy lift for the average SMB, which is one reason to partner with a workforce solutions firm who can handle benefits for part-time, contingent, and seasonal employees.

3. Encourage and Enforce PTO Usage

Another powerful retention strategy, especially around the holidays, is to not only encourage but enforce PTO usage. Employees who use their PTO are 41% and 25% (among men and women, respectively) less likely to voluntarily turn over, according to a 2025 study.

Unfortunately, nearly half of workers let some of their PTO go unused, citing concerns about workload coverage, job dedication, or saving time off “for a rainy day.” In other words, for whatever reason, people don’t feel comfortable using all their time off.

As an employer, there are several strategies you can take to encourage and even enforce PTO use, including schedule PTO planning sessions and using scheduling tools and platforms that show available PTO, upcoming holidays, and blackout periods to enable PTO transparency

In the end, offering PTO alone isn’t enough. Leaders must also create an environment where employees feel comfortable enough to take PTO, otherwise the risk of losing people remains.

4. Address Workload and Boundaries Firmly

Finally, if you’re truly committing to respecting employee autonomy, well-being, and time off, that means leaders and managers must follow through on those commitments. That means making and enforcing boundaries, like:

• No “on call” expectations while team members are on PTO
• Setting clear digital boundaries to limit after-hours emails, messages, or work requests
• Respecting time-off requests, and not penalizing or having backlash against employees who take their time
• Proactively distributing workloads during employee time off to ensure coverage without overburdening remaining staff
• Modeling boundary respect by not setting emails or expecting responses during off-hours or holidays and setting the tone for the whole team

This helps employees take genuine time off, which helps to reduce burnout and stress around an already intense season. However, as mentioned above, this strategy only works well when PTO is planned in advance and workloads are planned out and distributed equitably to avoid overburdening any one employee.

Final Thoughts

The holidays don’t have to mean a revolving door of burned-out, checked-out employees. With the right strategies, you can turn this seasonal challenge into a long-term retention win.

Of course, implementing these solutions can be time-consuming for a small or mid-sized business that’s already stretched thin. That’s where Ethan Allen HR Services comes in. Whether you need help managing scheduling systems, creating PTO policies, or building flexible benefits programs, our team becomes your team.

Learn more about Ethan Allen’s HR Services here.