When it comes to work and companies, people come and go, right?
Sure, that’s true, but it’s also an issue.
Welcoming new employees is fun, but losing trusted, valuable members is a real bummer. In this article, you’ll find some eye-opening employee retention statistics you need to act on right now and some action points.
Employee Retention Statistics
Here are some key employee retention statistics that provide insights into the challenges and trends in retaining talent:
1. 31% of employees have quit their job within the first 6 months of starting. (Source)
During the early days of a job, new employees carefully assess whether they’ve made a great choice or a huge mistake. They’re comparing the reality of the company culture and environment to how it was described during the hiring process—starting with how they’re on-boarded.
It’s important to make your employees feel like a part of the company. Make your new hires feel that they belong there not only by introducing them to their co-workers but also to executive management like CXOs. Also, define their roles and responsibilities clearly.
2. 16% of Gen Z and Millennial employees have quit a job because they felt the technology provided by their employer was inadequate. (Source)
Millennials and Gen Z are extremely comfortable with technology. As a result, they have certain technological expectations when selecting – and staying – at a workplace. Younger employees are willing to walk away from a job with bad tech. Provide the latest technologies and the right tools to improve their work effectiveness.
3. 80% of employees felt more engaged when their work was consistent with the core values and mission of their organization. (Source)
Make sure you deliver your company’s mission and vision to your employees in an understandable manner and conversational language. Your company values and mission are the foundation, core, lifeblood, fuel, and heart of your company culture.
Your employees shouldn’t have to guess what the company culture is. Let them know what you stand for and help them achieve their goals.
Things to address:
- Define company culture
- Discuss ideas with the team you are managing
- Gather feedback and iterate on how you build culture at your company, and with those you are managing
4. On average, a higher retention rate can maximize a company’s profits up to four times. (Source)
Employee departures can also have a negative impact on the culture of teammates who are in the company. Whenever a coworker walks out the door, people notice. Some might even start wondering if they should start looking for a new job too.
A high employee retention rate means maximizing profits. Employees who have been with a company longer can have better performance and knowledge of company processes.
5. Companies with optional remote work have a 25% lower turnover. (Source)
Statistics and research show that employees want the option to work remotely and flexible work options. Among the reasons for leaving a job, employees often cite difficulties in maintaining work-life balance.
You can provide your team with one or two work-from-home days per week. It will make people happy and they will feel productive without any office distractions or meetings.
6. 90% of workers said they are more likely to stay at a company that takes and acts on feedback. (Source)
Asking your employees’ thoughts on work-related matters shows that you respect and value their input. A proactive approach to collecting feedback is a mutually beneficial practice. It increases employee engagement and employee performance. Plus, you could end up with some really great ideas that improve your business.
7. 22% of employees stated that they left a company for professional development. (Source)
Invest in employees’ professional development by helping them with necessary resources. You could provide them with free access to a professional course that helps them be better at their jobs. Alternatively, you can also organize workshops and seminars to help them stay aware of the latest industry technologies and trends.
You can also encourage passion projects. Give them the time and opportunity they need to pursue their passion projects.
8. Employee turnover costs anywhere from 16% to 213% of annual salary depending on the position. (Source)
Hiring a new employee takes time, resources, and money. New employees are often brought on board at a higher salary. When an employee leaves your company, they take with them their knowledge, skills, and experience. Even after a new replacement is hired, it takes time and training for that employee to be fully productive.
Schedule regular 1:1 meetings with your employees and team to understand their needs and concerns.
9. 46% of HR leaders say retention is their greatest concern. (Source)
HR leaders say that employee retention is incredibly important and they are constantly looking for ways to improve their retention rates.
Ask yourself these questions:
- What are some common threads that you see in those who leave the company?
- Are team member conflicts common?
- Can you take steps to make sure everyone’s treated well?
Also, studying retention data and tracking metrics can help you get the bigger picture in terms of why exactly you’re having a retention issue.
10. Companies with a standardized on-boarding process experience 50% greater productivity from new hires. (Source)
New employees want to become valued members of the team. That’s where the on-boarding process comes in! Great on-boarding programs help employees familiarize with the company’s culture and values. New hires want opportunities to get to know their peers and managers
You can also introduce the buddy system which enables new hires to have a co-worker in the form of a mentor or buddy to guide them through their initial days in the workplace. The practice also applies to companies with employees working remotely.
11. Employees whose managers consistently acknowledge them for good work are 5x more likely to stay at the company. (Source)
Not getting enough recognition is one of the primary reasons for employees to move on to greener pastures. It’s an open acknowledgement and expressed appreciation for employees’ contributions to an organization.
When you recognize employees for their efforts, they feel appreciated and motivated to work harder the next time. When employees feel appreciated, they stay. They become loyal to the company.
12. 90% of employees are more productive with gamification, with 72% of them reporting it inspires them to work harder and 95% enjoying it. (Source)
Make it fun. Games, trivia, joy—sometimes these aren’t exactly what’d you associate with the workplace.
But why not? Employees spend so much time at the workplace. Shouldn’t it also be important to let off some steam, laugh, and have fun with your coworkers? Consider conducting team-building activities and games to bring more human connection.
13. HR experts report that employee burnout is responsible for at least 50% of the annual turnover. (Source)
There is no doubt employees are an organization’s biggest asset. Therefore, as an employer, employee well-being should be your top priority.
Where do your employees fall on a burnout spectrum?
Are they experiencing reduced professional efficacy?
Are they having feelings of energy depletion or exhaustion?
Are they present, but not productive?
An early sign of burnout is that an employees’ attitudes and moods change.
You can implement an employee wellness program to prevent burnout and stress. Doing an internal survey is a great way to determine what kind of things your employees want and would value.
14. Employee happiness is 23.3% more correlated to connections with co-workers than direct managers. (Source)
Team members work together and spend most of their time with each other – they have more interpersonal contact than their manager. Colleagues have an incredible influence on company culture and peer retention. This shows that who you work with is becoming more important than who you work for.
15. 77% of companies focus on employee experience to increase retention. (Source)
Today, more organizations are looking at everything they do through the lens of employee experience. Employee experience is everything an employee observes, feels, and interacts with as a part of their company. Do things with and for your employees, not to them.
Surveys help you analyze areas in your workplace which are doing well and where you need to improve. It shows employees that you care about their opinion and will work towards bringing the necessary changes.
16. It takes two years for a replacement employee to reach the same level of productivity as the previous worker. (Source)
Companies may need to wait an average of two years before they see the same level of productivity as past employee! Unfortunately, certain employers will only learn the value of employee turnover the hard way.
No matter how much experience someone has coming in to the new position, adjustment is going to take a great deal of time:
- Time spent getting acclimated and understanding their first tasks
- Time spent asking questions and trying to figure out where things are
- Time spent feeling uncomfortable about whether they’re doing their job right
- Time spent figuring out the products and services of the company
17. 35% of workers say they’ll quit if they don’t receive a pay raise. (Source)
The pay is certainly not everything, but it seems to be pretty important. 35% of employees say they would leave their job if they don’t receive a pay raise.
It’s up to you to decide what’s more profitable: raising their pay or dealing with costs of low retention.
Sit down with each employee and ask questions like:
- Where do you see yourself professionally in a year?
- What about five years?
- Are you happy with the work you’re doing now?
- Is there a specific management position that you’re interested in for the future?
By answering these questions, your employee communicates their goals and you have a chance to align those goals with the next promotion.
18. 67% of job seekers seriously consider inclusion and diversity when choosing their next workplace. (Source)
Workplace diversity and inclusion impact employee retention. People prefer a work environment where diversity is supported. Try building a diverse team where everyone feels like their voice is heard and respected.
Run a pulse survey and track what employees think. Ask questions like these:
- Do you feel that you can voice an opposing view or argument without fear?
- I am comfortable talking about my background and cultural experiences with my colleagues. (on a scale of 1 to 10)
- The organization publicly communicates information about its diversity goals. (on a scale of 1 to 10)
- Racial, ethnic, and gender-based jokes are not tolerated at this firm. (on a scale of 1 to 10)
19. 32% of job seekers have left a job within 3 months due to the company culture. (Source)
If you want to increase your employee retention rates, you should probably work on the company culture and work environment as well as provide a realistic job preview.
Managers need proper training to know how to handle employee communication, the right practices to put into place, and listening strategies. Invest in training for your managers, and give them the resources and support they need to achieve this communication-friendly environment.
20. Bad hiring decisions are responsible for up to 80% of employee turnover. (Source)
As an organization, you can not afford a bad hire. The cost and productivity problems continue even after you dismiss the employee because you need to go through the process again and find a replacement.
The four steps to hiring winning talent are:
- Define what you’re looking for
- Plan for effective interviews
- Conduct successful interviews
- Make personnel selections
HR managers should make use of employee background check services when they need to check candidates for a position.
21. Employee recognition programs can reduce the turnover rate by up to 31%. (Source)
It’s not easy to retain your employees, but employee recognition programs can help. EngageWith is an employee recognition and rewards platform that enriches your company culture. It virtually brings recognition and fun within your Slack and MS Teams workspace.
22. Ninety-five percent of employees believe they can help leaders understand why they left their organization. (Source)
You can understand the reasons why employees are leaving by conducting exit interviews. These interviews provide an opportunity to obtain honest feedback and insights from the employee who is leaving your company.
23. Only 35 percent of exiting employees said they experienced transparent communication throughout all levels of the organization.
Communicating things effectively to employees is important. When leaders and managers don’t communicate things consistently, employees feel uninformed and misaligned. As a result, employees may fill in the gaps, lose a sense of connection, or become uninspired.
24. Three out of four employees say they resigned voluntarily. (Source)
Recognition can help you to fight with great resignation. When an employee is recognized and appreciated for their contribution to the company, it motivates them on a personal level to continue contributing their talents to the firm.
25. More than half (63%) of employees who have worked for their current employer for a decade say they are open to a new opportunity. (Source)
What can a company do to keep its loyal workers motivated and engaged?
You can give special benefits to employees who have worked for you for more than five years. It’s always a good idea to foster an environment where the employees feel supported.
26. According to the U.S. Bureau of Labor Statistics (BLS), 4.25 million people quit their jobs in January 2022, up from 3,3 million in 2021. (Source)
The top 5 industries with the highest employee turnover rates include Construction, Manufacturing, Wholesale Trade, Retail Trade, and Transportation.
The top 5 Industries with lower average employee turnover rates include Mining and Logging, Information, Finance and Insurance, Real Estate and Rental and Leasing.
27. Employees at companies with high internal mobility (that hire/promote from within) typically stay almost 2x longer. (Source)
Internal mobility is when your current employees move from one job to another at the same organization. Internal mobility has an ROI that’s easy to quantify: higher employee engagement and retention. If internal mobility isn’t on your employee development program list, then it should be.
28. Around 78% of the reasons employees quit could have been prevented by the employer. (Source)
Work Institute identified seven categories that can be labelled as preventable:
- Career development
- Work-life balance
- Manager behavior
- Job characteristics
- Employee well-being
- Employee benefits and compensation
- Work environment and company culture
29. More than half (54%) of employees globally would quit their jobs if not provided post-pandemic flexibility. (Source)
There are several reasons why employees want flexible working hours. They think it improved their work-life balance and mental health and helped them grow in their careers. However, as an employer, you must create new workplace policies that give employees more control over how they work and where they work from.
30. The cost of replacing an individual employee can be two times the employee’s annual salary. (Source)
Losing your best employees can break down team morale. Externally, it can mean lost customer relationships. What can you do? Train your managers and leaders to have frequent, meaningful conversations with team members to understand their challenges, frustrations, goals, and their future plans.
31. The #1 operational priority for organizations is retaining their talent (this is even above revenue). (Source)
Employees who have been with the organization for an extended period are often more productive and efficient. High turnover can disrupt workflows and hinder overall productivity.
Recruiting and training new employees can be expensive. Retaining existing talent reduces the need for frequent hiring and onboarding, saving the organization both time and money.
Tools for Your Employee Retention Strategy
You may find it tough to adjust to your employees’ needs and reduce the employee turnover rate – there are some tools that managers and leaders can leverage to meet these needs better and improve employee engagement.
How can you develop an employee feedback strategy at your organization? You can leverage employee engagement, pulse, and listening surveys. This is a valuable tool that gives insight into the employee’s needs. You can use employee engagement software to conduct employee pulse surveys.
You must create an organizational culture that prioritizes employee recognition. Peer-to-peer recognition and appreciation from managers and leaders help you make your employees feel valued and reduce turnover. Use an employee recognition tool that allows employees to share recognition company-wide.
Employee Exit Interviews
Whether your organization experiences high or low employee turnover, an exit interview can help you uncover insights into why employees are leaving so you can make informed decisions for culture improvement and tackling turnover.
Employee Retention FAQs
Employee retention is crucial for several reasons. It helps maintain institutional knowledge, saves costs associated with recruitment and training, fosters a positive work environment, and contributes to overall organizational stability and success.
Factors contributing to turnover can include inadequate compensation, lack of career growth opportunities, poor work-life balance, unsatisfactory work culture, ineffective leadership, and limited recognition or appreciation.
Employee satisfaction can be measured through surveys, feedback sessions, and regular performance reviews. It’s important to assess factors such as job satisfaction, work-life balance, career development, and communication within the organization.
Competitive benefits and perks, such as health insurance, retirement plans, flexible scheduling, and wellness programs, can significantly contribute to employee satisfaction and retention by enhancing the overall compensation package.
Exit interviews can provide valuable insights into the reasons behind employee turnover. By understanding the factors that led to an employee’s departure, organizations can make informed decisions to improve retention strategies.
Did you find this information helpful?
We hope you found these stats useful and that your employee retention efforts will benefit from this information.
Take these employee turnover statistics and tools into account before crafting the best strategy for your company. Do you have any other statistics? Please drop them in the comment section below.
Do you want to use the data? Please cite the source as Springworks and link to https://www.springworks.in/blog/employee-retention-statistics/
Originally published on Feb 25, 2021 1:41 PM, updated Jan 29 2024