19 Employee Retention Statistics for 2023
Charlette has over 10 years of experience in accounting and finance and 2 years of partnering with HR leaders on freelance projects. She uses this extensive experience to answer your questions about payroll.
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.
By keeping an eye on current employee retention statistics, such as those we cover below, you can stay ahead of the trends and keep your employees happy within your company.
1. Employee Tenure Averages 4.1 Years (BLS)
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.
2. Voluntary turnover could reach 24% or more in 2022 (Gartner)
Before COVID-19, companies saw voluntary turnover rates of about 20%. According to Gartner, in 2022 and for the foreseeable future, companies should expect their turnover rates to increase by about 4%. This increase is a result, at least in part, of employee expectations that changed during the pandemic, including the availability of remote or hybrid work arrangements.
3. Companies with under 40% turnover are considered low-turnover businesses (Gallup)
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.
If you’re seeing high employee turnover rates as an established business, however, it’s time to look internally, perhaps at your employee management process.
4. The total separation rate in 2021 was 47.2% (BLS)
That sounds terrifyingly high—but consider that this employee retention metric from the Bureau of Labor Statistics includes all industries throughout the country and is not adjusted for seasonal employees. However, if your organization’s turnover is at, or near, these levels, you may have some work to do.
5. 49% of executives saw higher turnover in their organizations post-pandemic (SHRM)
With turnover much higher than normal, it can be a struggle to hire and keep great employees. 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.
Learn how to calculate your business’s employee turnover.
6. Replacing an employee costs up to twice the amount of the employee’s salary (Gallup)
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.
7. 49% of US employees were burned out post-pandemic (McKinsey)
Following the pandemic, about half of US workers are at least somewhat burned out. According to McKinsey, this is likely an underrepresentation of the actual number. Burnout comes mostly from having too much work to do, being treated unfairly, poor management, and a lack of clarity about what the employee’s role requires.
8. 47% of employees think work is stressing them out (Officevibe)
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.
9. Almost 40% of workers who quit do so in their first year (Work Institute)
It’s often agreed that it takes several months before a new hire is up and running. Your company may be evaluating them and their productivity, making internal decisions about whether the employee was a good hire—and they’re also doing the same to you. In that first year, 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.
Our new hire checklist can help ensure you get your employees off to a good start with your organization.
10. 57% of employees wouldn’t recommend their workplace to a friend (Officevibe)
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?
11. 48% of workers leaving their jobs change industries (McKinsey)
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.
You can work to retain some of these employees by offering learning and development opportunities, especially if you have roles that might interest them more.
12. 82% of workers have considered quitting because of a bad manager (GoodHire)
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.
13. 31% of employees wish their manager communicated better (Officevibe)
Especially in remote environments, workers have a strong desire for clear and transparent communication from their manager. They want to know how their work is contributing to the overall success of the company and if they’re on the right track. While formal monthly performance reviews might be too much, regular informal check-ins are imperative to a healthy workforce.
Learn about engaging remote employees with our guide.
14. 56% of remote workers would look for a new job if their company mandates a return to the office (Owl Labs)
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.
Our remote work statistics article has more information you need to know about the popularity of remote and hybrid work models.
15. 51% of employees think their onboarding experience was subpar (Officevibe)
Onboarding employees is a time-consuming process. But to be done right and effectively, 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.
Check out our article on employee onboarding best practices to help reduce your turnover.
16. 54% of employees want flexibility on work times (EY)
We know employees want flexibility in where they work but now, according to EY, 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 (54%) would prefer flexibility in work hours over work location (40%) if they could only choose one.
Need help creating a flexible work schedule policy? Read our article, which includes a free downloadable policy template.
17. 71% of employees open to looking for a job are unhappy with their company’s flexibility (Future Forum)
According to Slack’s Future Forum, respondents are overwhelmingly unhappy with their organization’s level of flexibility in their work hours and location. These employees are also more likely to be job searching and will take a new job that better aligns with their flexibility desires.
18. Companies promoting from within have employees that stay twice as long (LinkedIn)
Employees want to see their growth potential in your company. If you have a clear culture of promoting from within, giving employees high internal mobility, you will typically see employees with tenure twice that of companies with low internal mobility. Internal promotions and advancements also result in employees who are three-and-a-half times more likely to be engaged.
19. Companies with low employee engagement have higher turnover rates (Gallup)
If a company has low employee engagement, it can expect turnover rates of 18% to 43% higher than companies with high engagement rates. This underscores the crucial importance of having engaged employees and, ultimately, high employee retention.
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 metrics in today’s workplace, you can take some precautions and move your business in the right direction.
