How does your company fare when it comes to staff turnover? Employee retention statistics can help you understand the complex reasons why people leave jobs.
Employees come and go; such is the nature of employment. But turnover - or the rate at which employees leave the workforce - can say a lot about a business’s overall performance, as well as how it treats its people.
Employee retention is a complex beast that all managers should strive to come to grips with. Understanding what motivates people to stay in a role can ultimately help you keep your best staff around for longer.
To help you get up to speed with all things employee retention, from why it’s so important to the best strategies to try, we’ve compiled all the best employee retention statistics right here. So let’s dive in.
News of the Great Resignation was impossible to avoid in 2021. In a move that shook employers to their cores, 47 million US workers voluntarily left their jobs.
Those who resigned cited a mix of reasons, from seeking better working conditions elsewhere to burnout triggered by unmanageable workloads.
The writing was on the wall for employers; people expect more from their jobs, and businesses must meet employee preferences if they want their best talent to stick around.
While the world has returned to relative ‘normalcy’ since resignations peaked in 2021, we’re not out of the woods yet, as more than half the US workforce has one eye on the door.
Research has revealed that 51% of US employees are watching out for or actively seeking new jobs. Considering just one in four employees would recommend their organization as a great place to work, this lack of loyalty shouldn’t come as a surprise.
So, why should we care? After all, employees moving jobs is par for the course.
Well, the devil is in the details: it's all about the rate at which your employees are choosing to move on. High employee turnover rates can negatively impact businesses, both in terms of time and money spent on recruitment and lost productivity, knowledge, and culture.
Between offering competitive salaries and excellent benefits, retaining your employees can be expensive. However, the cost of these incentives pales in comparison to the cost of having a high employee turnover.
Replacing staff is a costly business, according to employee turnover statistics. According to the Centre for American Progress, replacing employees costs between 16% and 213% of their salary, depending on seniority and expected employee turnover.
Gallup breaks this down further, estimating that replacing those in leadership and management positions costs around 200% of their salary. Replacing technical professionals costs 80% of their salary, and when replacing frontline employees, expect it to cost 40% of their wages.
Other reports suggest that hiring a new worker in the US costs around $4,000 and takes around 24 days, accruing unseen turnover costs in time spent reviewing applications and interviewing candidates.
Not to mention, the best talent in the market has the negotiating power to demand better salaries for in-demand skills, leading 57% of organizations to claim an inability to find the right skills at the right price in the current job market.
This makes it more important than ever to retain employees. Yet, when only 17% of businesses calculate and track the cost of their employee turnover, many don’t understand the full breadth of the issue.
Now we've covered the cost to business, we need to dig into the statistics that explain why employees churn.
According to Gallup, these are the top single reasons US employees voluntarily left their jobs in 2023:
However, this is only part of a much larger picture. When reasons for leaving are grouped into broader categories, these are the top themes researchers identified:
In terms of what US employees are looking for in their next job, this is what they consider to be very important:
Reports from across the globe have revealed other notable drivers, including:
Skills development. A UK survey found that almost one-third of employees who changed jobs within the past year did so to learn new skills.
Burnout. Burnout statistics from Limeade suggest that 40% of employees who double as caregivers are highly stressed, with 33% poised to leave their jobs.
Bad managers. A Goodhire survey found 82% of US workers would potentially quit their jobs because of a bad manager.
Mental health. The APA reported that 8 in 10 people will look for workplaces that support mental health when searching for a job.
Onboarding processes. First impressions matter! One study found that organizations with strong onboarding processes see an 82% improvement in new hire retention. Yet, HR statistics show that 88% of workers say their company doesn’t have a good onboarding process for new hires...
Purpose. People who find purpose in their work are 2.7 times more likely to stay.
Their team. Teamwork statistics show that ‘working with a great team’ was the primary reason for staying in a role for 37% of respondents.
So, what are businesses doing to ensure their best people are happy and well-supported? Well, more businesses are investing in retention, with 18% increasing their focus on retention after the pandemic.
However, too many businesses are doing very little despite being aware of the risks of failing to invest in retention strategies. While 87% of HR leaders cite improving their employee retention strategies as a priority for the coming years, 1 in 5 finds it difficult actually to focus on this.
In a similar vein, 60% of organizations reportedly found it more challenging to retain talent in 2022 than the prior year, yet only 47% of those have since introduced initiatives to improve employee retention.
This suggests that the issue isn’t that leaders don’t understand the importance of retention but that they struggle to drive meaningful change.
The good news is that a huge proportion of resignations are preventable. Two in five employees who left their jobs between 2023 and 2024 said that their manager or the business could have prevented them from leaving. Let’s look at how.
According to the CIPD, 68% of businesses that offer hybrid or remote working options say it has helped them attract and retain talent, while 35% say it has improved engagement. It also found that these are the most common steps businesses take to improve retention:
From the employee perspective, a Gallup survey asked job leavers what could have been done to retain them. These are the top responses:
Studies have repeatedly shown that good employee engagement is a massive contributor to retention. Employees who feel connected to a strong company culture are 3.7 times more likely to be engaged at work and 55% less likely to be actively looking for another job.
Despite this, 15% of the global workforce is made up of actively disengaged employees. This is a worrying trend, but there are thankfully many ways to improve engagement, including employee recognition, which has been found to lower voluntary turnover by 31%.
Considering managers account for 70% of the variance in employee engagement, which massively influences retention, it’s clear managers can and should be doing more to prevent employees from leaving.
Managers have one particularly important tool in their arsenal with the power to prevent resignations: talking to their employees. According to Gallup, 36% of leavers don’t talk to anyone before deciding to resign, and when they do, only 66% choose to talk to a supervisor.
Considering 45% of leavers reported that no effort was made to discuss their job satisfaction, performance, or future with the organization within them in the three months before their resignation, it is unsurprising that many chose to leave quietly rather than raise concerns.
Of those who did talk to their managers, only 17% percent asked what it would take to prevent them from leaving.
Technological advancements have significantly impacted the way we work and are a huge contributor to employee retention. 93% of HR leaders believe poor workplace technology negatively impacts employees’ experiences.
Firstly, employees understandably expect to be provided with the appropriate technology to do their jobs well.
Yet, nine in ten are frustrated by inadequate workplace technology. While 11% say it’s made them want to quit their jobs, one in six has left a job because they didn’t have access to the right tools to do their work.
In short, it matters that you provide your employees with the appropriate software to do their job, and don't just expect them to create workarounds and use Excel for everything.
This is the sort of thing that really frustrates people over time - prompting them eventually to go looking for a position in a more tech-savvy workplace.
Technology is especially important in the workplace for younger generations. Virgin Media found that one in four 18-to-24-year-olds say access to better technology would convince them to remain in their current roles, while 91% of Gen Z say technology influences their decision-making when selecting a new job.
Finally, technology has the power to make or break your retention initiatives and human capital management, as data collection and analysis are key.
While 63% of organizations collect some data to inform their resourcing decisions, most are missing opportunities to drive real impact.
In fact, only 28% use this data to identify retention issues, 21% use it to forecast hiring demands, and as little as 12% evaluate and improve the effectiveness of retention initiatives.
Thankfully, with the right workforce management tools, employers can get back on track and collect the data they need to make informed decisions about their workforce.
Check out some of our guides to creating outstanding employee experiences and building workplaces where staff want to stay long-term:
Unlocking Employee Engagement: How to Build a Thriving Workplace ➡️
What Can You Do to Elevate Employee Experience? ➡️
Why Employee Preferences Are Important for Business Success ➡️
