Employee retention is a metric that measures a company’s capability of keeping high-performing employees and preventing turnover—and it is an important aspect of any successful business. Apart from increasing engagement, productivity, and job satisfaction, strong employee retention can save your business money by negating the need for turnover-related expenses.
With the below employee retention statistics, you can stay ahead of the trends and keep your workers happy within your company. This article also contains tips to help you encourage employees to stay longer and reduce turnover rates.
Key Takeaways:
- 31% of new employees quit in their first six months.
- 76% of employees are more likely to stay with the company if promoted from within.
- Companies with high employee engagement have lower turnover rates.
Retention & Turnover Trends
1. 93% of companies are concerned about employee retention
This might seem high, but consider that this number includes every industry, as well as both voluntary and involuntary turnover. Voluntary turnover is often higher in smaller and newer companies, as they grow fast and work to find the right culture.
(LinkedIn)
2. Employee belief that now is a good time to look for a different job declined significantly in 2023
According to Gallup, 56% of US workers agree that now is a good time to find another quality job and leave their current organizations. While the number is still big, this is much lower than the record-high 70% recorded in mid-2022. This decreasing trend in turnover statistics is a result, at least in part, of the cooling job market and changes in employee expectations, including the availability of remote or hybrid work arrangements.
(Gallup – Employee Retention and Attraction report)
3. Voluntary turnover rates at the end of Q1 2024 decreased slightly
In the private sector, the total voluntary exit rate for March 2024 was only 2.3%, which is 0.2 percentage points lower than the rates in February, according to data from the Bureau of Labor Statistics (BLS). The March 2024 rate is even lower than the turnover percentage recorded in March 2023 (2.3% versus 2.7%).
(BLS – March 2024 Total Separations report)
4. Leisure and hospitality saw more employee turnover at the end of Q1 2024
Despite the slight decrease in total voluntary rates, job retention statistics show higher turnover rates in the leisure and hospitality industry as compared to other industries, according to BLS data. It recorded a turnover rate of 5.9%, which is 2.6 percentage points higher than the average employee turnover rate for that period.
Businesses with high turnover rates may find it difficult to hire employees if many workers are searching for better opportunities and recruiters are looking at the same talent pool to attract candidates. Companies have to work to engage employees and provide them with the benefits they seek, like flexibility in their work location and schedule. It’s also important for companies to recognize the limits of employees. Too much pressure and work, combined with not enough hours in the day, leaves employees feeling unsatisfied and dejected.
(BLS – March 2024 Total Separations report)
5. Companies with high employee engagement have lower turnover rates
A Gallup report states that high-turnover businesses with highly engaged workers have 18% less turnover. Meanwhile, companies with highly engaged employees and low turnover rates get 43% less turnover. This shows the crucial importance of having engaged employees and, ultimately, high employee retention.
(Gallup – Employee Engagement survey)
What Business Leaders Should Know Stats
6. 41% of organizations use diversity, equity, and inclusion (DE&I) programs to improve employee retention
Companies with diverse and inclusive workplace cultures are more likely to have employees who are empowered to become better versions of themselves. They feel more engaged when they believe the organization supports their diversity and values their work contributions. This ultimately helps to boost worker productivity and retention.
(LinkedIn)
7. Employee tenure averages 4.1 years
Average employee tenure has dropped a bit in the past decade (from 4.6 years in 2012 to 4.1 years in 2022). Men have slightly higher average tenure than women (4.3 years vs 3.8 years), and tenure can vary widely by industry, primarily due to the average age of the workforce within that industry.
(BLS – Employee Tenure report)
8. 31% of employees quit within the first six months
It takes several months before a new hire is up and running. While you take that time to evaluate new employees and decide whether they are good hires, new employees are also doing their own assessments of your company. In that period, they’ll learn if the work is what was described during the interview, how their manager treats them, and if they’re really passionate about the work they’re doing.
If new employees are unhappy, more than 30% are likely to resign within their first six months. Further, staff turnover statistics show that nearly one in five of those workers quit during the first month.
(BambooHR – Employee Engagement Statistics report)
9. 91% of employees who had effective onboarding programs feel more attached to their work
New hire onboarding contributes to retention, according to employee retention data from TeamStage. Running a highly effective one is a time-consuming process. But to be done right, it simply has to be longer than one or two days. Speeding up the process is utterly ineffective and will leave new hires without a clear understanding of their role in the organization.
(TeamStage)
10. Replacing an employee can cost up to three to four times the amount of the position’s salary
While lower-level positions are usually easier to fill, higher-level positions can be extremely costly to fill when an employee leaves. This expense comes from the actual salary, training, and onboarding time, plus job board fees and lost productivity.
(SHRM – The Real Costs of Recruitment report)
11. 46% of employees wouldn’t recommend their workplace to a friend
This should alarm every business. In addition to missing out on some great employees (word-of-mouth referrals often lead to the best employees), this stat doesn’t bode well for retention. If your employees can’t recommend your company as a good place to work, are they going to stick around for the long term?
(UKG)
Why Employees Leave Stats
12. Low compensation and the lack of career development are common drivers of employee turnover
The top two reasons that workers leave their jobs are inadequate pay and not having career development and advancement opportunities, with 74% and 61% of HR professionals choosing the said reasons, respectively. This is followed by the lack of workplace flexibility, unsustainable work expectations, and having uncaring and uninspiring leaders.
(SHRM – Better Workplaces on a Budget Recommendations report)
13. 82% of workers have considered quitting because of a bad manager
Keep a close watch on your management team, especially if you have employees leaving frequently who report to the same manager. People management skills are important and, crucially, they can be taught. Invest in your managers and you’ll see higher retention.
(GoodHire)
14. 92% of job seekers will choose a company with learning and development opportunities over a company that doesn’t offer them
In addition to a flexible work environment, job seekers are looking for companies that offer training and upskilling opportunities to enhance their careers. When you create your job ads, be sure to include learning and development as one of the perks of working at your company.
(IMC)
15. 73% of remote workers would look for a new job if their company mandates a return to the office
This shows how important it is for employees to have some control over where they work. Employees overwhelmingly feel that they’re as productive working remotely as in an office—if not more so. For companies that can support remote workers, it’s a great way to improve employee engagement.
(Harris Poll)
16. 48% of workers leaving their jobs change industries
For many people making a job change, it’s about more than just escaping a particular workplace. It’s often about doing something else that they’re more passionate about.
(McKinsey)
17. Burnout can contribute to employee turnover
According to research, more than half (59%) of US workers are at least moderately burned out and nearly 30% of these workers are highly likely to look for better job opportunities. Employee burnout comes mostly from having too much work to do, being treated unfairly, poor people management, and a lack of clarity about what the employee’s role requires.
(Aflac)
If employee burnout is not addressed, it can push workers to leave the organization for a healthier work environment. (Source: Adobe Stock)
18. 23% of workers who experience workplace stress want to quit
Partly from burnout, workers think their workplace contributes to their higher levels of stress. Wellness programs are great, but just reminding employees to meditate before they start their workday or offering a gym membership isn’t enough. Employers need to treat the whole employee, including taking a hard look at an employee’s learning style, manager, workload, and personal and professional goals.
(American Psychological Association)
19. Employees are 9.1% more likely to resign if a team member quits
Resignations can be contagious. When an employee quits, another team member will likely do the same within 135 days of the first resignation, according to research from Visier. Further, compared to teams with six to 10 employees, two-member teams are 25.1% more likely to experience this phenomenon.
(Visier)
What Will Influence Employees to Stay Stats
20. Frequent and meaningful work recognition impacts job commitment
Employee recognition can have a positive effect on engagement, productivity, and retention, especially if this is given frequently. Based on an Achievers Workforce Institute (AWI) report, workers who are recognized at least monthly are 22% less likely to look for job opportunities that offer better pay. Even those who receive below local market rates are 33% more likely to say they are not searching for new jobs, provided they are recognized at work at least monthly.
(Achievers Workforce Institute)
21. Employees stay longer if they feel valued and supported at work
While compensation may be one of the reasons why workers quit, this isn’t always the case. According to AWI, 72% of employees will stay in a job where they feel cared for, valued, and supported as opposed to one that pays 30% more than their current salaries.
(Achievers Workforce Institute)
22. 39% of employees want more flexible working hours
We know employees want flexibility in where they work, but now, according to WorkHuman, we also know they want flexibility in when they work. Not everyone is productive from 9 to 5; some people are naturally night owls. This is why, if their work allows, you might consider letting employees work when they work best and shift your performance focus to one of results. Interestingly, more respondents (39%) would prefer flexibility in work hours over a raise (28%).
(WorkHuman)
23. 26% of employees prefer fully remote work
According to a PwC survey, 54% of workers are able to work remotely. Of all employees, 26% would prefer full-time remote work, but only 18% said their employer is likely to adopt that model. Additionally, 11% would prefer to work full-time in person. If a company is able to operate without employees in the office, a remote environment may increase employee productivity, engagement, and happiness.
(PwC)
24. Hybrid work options would entice workers to stay longer than a year
51% of US workers thought having access to hybrid work options would help prevent quick quitting, according to research from Skynova. However, while employees across all generations (such as millennials and Gen Zs) chose this option, only 37% of employers agree that it will keep workers at a company longer. Instead, 73% of employers believe higher pay would entice employees to stay (but only 24% of employees concur).
(Skynova)
25. 75% of employees are more likely to stay with the company if promoted from within
Employees want to see their growth potential in your company. If you have a clear culture of promoting from within, you will typically see workers with a slightly higher tenure than companies with low internal mobility. Employees with internal promotions and career advancements within their second year in an organization are highly likely to stay (75%) compared to those who didn’t get to change roles (56%).
(LinkedIn)
How to Improve Employee Retention
Many factors affect staff retention but coming up with a retention strategy can minimize voluntary turnovers and make employees feel valued at work. Here are a few strategies to help you get started:
- Develop a company culture that is built on trust, aligns with your overall business goals, promotes staff recognition and development, and fosters open communication.
- Create and conduct a step-by-step employee orientation program, which includes the basic tools and support employees need to adjust to their new roles.
- Offer competitive compensation and benefits packages to help you retain and attract top talents.
- Run employee surveys regularly as these will provide insights into your workforce’s engagement and satisfaction levels.
Bottom Line
Employee retention is affected by a lot of factors that you can control—your company’s culture, employee engagement, and your overall onboarding process. Although turnover is inevitable, there are several things you can do to limit it. By taking note of the prevailing employee retention statistics in today’s workplace, you can take some precautions and move your business in the right direction.
References:
LinkedIn, Gallup (Employee Retention & Attraction report, Employee Engagement survey), BLS (March 2024 Total Separations report, Employee Tenure report), Wellable, BambooHR, TeamStage, SHRM (Real Costs of Recruitment report, Better Workplaces on a Budget Recommendations report), UKG, GoodHire, IMC, Harris Poll, McKinsey, Aflac, American Psychological Association, Visier, Achievers Workforce Institute, WorkHuman, PwC, Skynova
