Employee retention is the organization’s ability to hold on to its talent. Therefore, companies need to adopt valuable strategies to ensure their best talent remains on their team for as long as possible.
With 33% of employees leaving within six months of being hired, companies must act fast to reduce employee turnover. Unfortunately, the latest employee retention trends indicate that the number of people who quit their jobs has increased in recent years. That being said, employers lose valuable employees and face the responsibility of hiring, training, and replacing them.
Top Employee Retention Statistics: Editor’s Choice
- In April 2021, about 4 million workers quit their jobs.
- 4.1 years is the average time an employee stays with an employer.
- 47% of HR managers believe that staff retention is their biggest problem.
- In 2020, one out of five employees changed jobs.
- The US holds a 57.3% average employee turnover rate across all industries.
- 81% of workers support flexibility in work schedules.
- The hospitality industry in the US has a turnover rate of 73.8%.
- 13.2% of technology employees leave their jobs each year.
- The UK manufacturing industry’s turnover rate reached 17.6%.
- In India, the average retention rate is between 80% and 85%.
Employee Retention Stats: How Many Employees Quit?
While every business should seek to replace underperforming employees, retaining the best workers may be challenging. Fresh talents are fully aware of their impact on the company, and they want to be acknowledged for their worth.
If the company cannot provide high-performing workers with the best employee benefits, statistics show they won’t hesitate to find a job that meets their needs.
1. In April 2021, 4 million people resigned from their jobs.
If we want to find out why employees quit, statistics are something we have to look into. One of the reasons may be that many employees think their current jobs picked during the unemployment crisis don’t meet their needs.
Moreover, as vaccination rates have increased, the consequent decline in COVID-19 cases has made work prospects better for workers. This led to 9.3 million job openings in April of the same year, so workers got a chance to negotiate for a higher salary, better accommodation or more consistent work schedule.
2. On average, an employee stays with a company for 4.1 years.
Employee loyalty statistics show that employee loyalty has slightly decreased over the past couple of years. For example, in January 2018, an employee worked at a company for an average of 4.2 years. In 2020, employee loyalty declined and will most likely continue to drop in years to come.
3. 90% of employees will most likely stay at a firm that acts on feedback.
Recent employee retention studies confirmed that almost every worker wants their employers to hear their opinions on work-related issues and act on them. This results in improved staff engagement and performance. Furthermore, actively listening to workers may lead to collecting some fantastic ideas that can help grow your company.
4. 47% of HR managers feel that employee retention is their top challenge.
Employee retention research by SHRM and Globoforce found that retaining employees is the most significant concern for almost half of human resources leaders. With many employees quitting their jobs, companies have to deal with turnover costs and a decreased availability of skilled candidates.
5. A whopping 72% of US workers experience burnout.
Overworked employees statistics reveal that they are undoubtedly much less confident and productive in the workplace and ultimately more likely to quit their jobs.
With the advent of the pandemic, employee burnout has skyrocketed up to 72%. This figure is not too optimistic, considering that only 42% of employees felt burned out before the coronavirus outbreak.
6. 23% of employees are more likely to stay if leaders clearly explain their roles.
Workers want clear instructions about what they are expected to do daily. For this reason, training and employee retention statistics imply that an onboarding strategy might be the best solution. Nevertheless, 76% of HR professionals say onboarding is still underutilized, and 24% of companies have no such strategy in place.
7. One in five workers changed their jobs in 2020.
The Institute for Business Value study shows that younger generations do not hesitate to pursue a new career path. Employee retention statistics for 2021 indicate that 25% of millennials and 33% of Gen Zers are open to new job opportunities.
While every generation has switched careers to find their best fit, millennials seem to jump on this bandwagon more slowly than their older counterparts at the same age.
8. Low respect between coworkers causes 26% of employees to resign.
Employee retention stats confirm that a toxic work environment damages an organization’s ability to retain employees, regardless of the benefits it offers.
A whopping 61% of employees agree that a good relationship between a workforce and senior management is the key to job satisfaction. Furthermore, only 33% of companies are currently satisfied with the level of respect they have in their workplace.
Statistics on Employment Retention and Turnover Rates
Employee retention refers to the percentage of workers who stay at a company over a specific period and the strategies adopted to keep them. On the other hand, turnover rates include those who leave either on their own accord or involuntarily.
What is a good employee retention rate? How much does it cost companies to lose employees? Keep reading to find out.
9. In the US, the average employee retention rate is 90%.
As a general rule, a good retention rate is considered to be 90% or higher. While the average rate in the country seems to be good news, the retail industry and the hospitality industry have a very high turnover rate. On the other hand, the best employee retention rate is seen in government, education, insurance, and finance.
10. According to the Bureau of Labor Statistics, the total turnover rate in the US is 57.3%.
What’s more, 29% of turnover comes from employers firing their workers, about 25% comes from voluntary turnover, and only 3% refers to high-performers.
Furthermore, it’s essential to calculate employee attrition, turnover, and retention rates separately, as many employees left their position but not the organization. This might happen in the case of a promotion or transfer to a different department.
11. 81% of employees agree that flexible work schedules would increase their loyalty to employers.
Work-life balance is the top priority for many US adults. For this reason, employee retention rate statistics confirm that most Americans consider work flexibility the primary factor when applying for a job.
Besides improving overall morale and reducing absenteeism in the workplace, work flexibility also boosts productivity, contributes to sustainability, and improves employee retention.
12. Losing an employee can cost a company 1.5–2 times an average employee’s salary.
The cost of turnover statistics show that the actual loss depends on the level of seniority. For instance, an hourly worker costs approximately $1,500 per employee. Moreover, technical positions can soar up to 100%–150% of a worker’s salary.
Turnover costs are not just connected to recruiting. Onboarding, training, and filling vacant positions add to the expense.
13. Every company should aim for an employee turnover rate of 10%.
Now that we have answered your question, “What is a good employee turnover rate,” it’s important to understand how difficult it is for a company to achieve that level. In fact, some of the best companies at retaining employees fall into the 12%–20% range. On the other hand, retail, hospitality, and fast food industries have the highest turnover rates across all industries.
Employee Retention and Turnover Rates by Industry
Although researchers expect top-notch retention and low turnover rates from companies, most industries find it challenging to adapt to that standard. That’s why we broke down the following employee retention facts and stats into separate sectors.
14. The hospitality industry in the US sees 73.8% of its workers frequently change jobs.
The hospitality industry has great potential to retain young generations. Yet, the nature of the job, low salaries, and scarce benefits increased the average turnover rate in 2021 by industry, with 6% of workers leaving every month. To retain talent, the hospitality industry must provide young workers with training and a supportive environment.
15. In April 2021, the retail industry had almost a million job openings.
As a result of the pandemic’s devastating effect and the empowerment of the job market, employee retention rates by industry have never been more evident.
Americans working in retail are ditching their jobs to find less stressful and more profitable positions—insurance agencies, banks, and local governments are considered the most rewarding options.
16. Restaurants have a 66.3% turnover rate.
Although 46.5% of workers in the restaurant industry quit their jobs, the average employee turnover rate should not alarm restaurant owners.
As they primarily employ teenagers and academic students with little to no work experience, restaurants will never cease to have high employee turnover. In fact, working teens alone make up 1.5 million restaurant employees.
17. In technology, the employee churn rate stands at 13.2%.
While turnover in tech does not seem to be concerning, it is still higher than in most industries. Even tech companies with a good grasp of training and onboarding processes find it challenging to retain their best talent.
According to employee retention statistics, computer games have the highest turnover rate (15.5%), followed by the internet (14.9%), computer software (13.3%), and IT and services (13%).
18. The national nurse turnover rate is 17.1%.
Depending on the region and specialty, nursing turnover rates fluctuate from 8.8% to a maximum of 37%. When discussing an employee retention rate benchmark in the nursing industry, we can see that the 2016–2026 decade estimates 438,100 new registered nurses, equating to nearly a 15% growth.
However, the figure doesn’t include 203,700 nurses added every year due to baby boomers’ retirement.
Employee Retention and Turnover Rate by Country in 2022
Apart from the industry, the country also plays a significant role in determining the average retention and turnover rates. Here are some of the most remarkable worldwide statistics and trends.
19. In 2020, the manufacturing industry in the UK hit an all-time high turnover rate of 17.6%.
In addition to the coronavirus turmoil, voluntary resignations, redundancies, and dismissals contribute to this alarming turnover rate.
For example, employee retention statistics for 2020 in the UK confirm that unskilled jobs had the highest turnover standing at 16.6%, compared to a 13.8% rate of non-manual workers.
20. Canadian organizations have a turnover rate of 21%.
Canadian workforce growth has been very similar to that of the US in recent years. Yet, statistics on low employee retention rate reveal that about 57% of the 63% interviewed Canadian companies kept track of how many employees quit. The survey showed that 12% of workers voluntarily left organizations, compared to 7% involuntary turnover.
21. India has an average retention rate of 80%–85%.
Based on multiple employee engagement and retention statistics coming from retail, insurance, banking, financial, and NGO industries, India has lower retention than average. To keep employees engaged and satisfied with their jobs, Indian companies should emphasize employee retention. One way to achieve this is to implement a thorough hiring process, prioritize work-life balance, and improve workplace communication.
Employee Retention Statistics: The Takeaway
Although employee retention in some countries and industries is way below average, it’s not all bad news. Companies can learn how to beat the odds with retention by understanding employee behavior and creating a work environment with a strong employee value proposition.
Employee happiness at work statistics show that employers should anticipate what workers value the most to satisfy their needs. Recognizing and rewarding employees is an effective way of achieving that. By doing so, employers can retain employees and save substantial amounts of money.
Frequently Asked Questions
What is a good employee retention percentage?
Employee retention requires a minimum of 90% to be considered good. In addition, companies need to aim at an average turnover rate of 10% that comprises under-performing employees. Yet, a good retention percentage varies by the industry and calculation method used. In that case, rates anywhere from 70% to 85% are considered acceptable, replacing around 20% of workers.
Job satisfaction, happiness, and excellent communication among coworkers and senior management are some of the many aspects companies need to take care of when retaining their workforce.
What is the difference between retention rate and turnover rate?
Contrary to popular belief, retention and turnover are not polar opposites. Simply put, employee retention refers to both the rate at which individuals stay with a business over a specific time and the strategies used to keep them there. On the other hand, turnover rates include all the employees leaving the company over that same period, voluntarily or not.
Apart from that, there are three critical differences—retention doesn’t include newly hired employees, some organizations exclude involuntary turnover from their calculations, and turnover is usually viewed quarterly or monthly, depending on the company’s needs.
What industry has the highest employee turnover?
With a whopping 352%, staffing is the industry with the highest turnover rate. Hotels are in second place with a turnover rate fluctuating between 60% to 300%. These statistics are expected, considering that workers in these sectors sign temporary or seasonal contracts.
The retail industry and, more specifically, the supermarket and fast-food sectors share the same average turnover rate, standing at 100%. During the Christmas holidays, an increased number of young employees (usually high school graduates or college students) join the business.
What is the average cost of replacing an employee?
Unfortunately, it’s very common for businesses to lose top talent due to a toxic work environment or lack of communication and benefits. Unfortunately, losing valuable talents translates into losing the best problem solvers, affecting the team morale at the same time.
According to the latest employee retention statistics, replacing an individual employee can cost the company an arm and a leg—from one-half to twice the employee’s annual salary.
Sources
Achievers, Built In, Bureau of Labor Statistics, Business, Ceridian, Ceridian, CNBC, CNBC, Dev Skiller, Drive Change, Great Game, HR Executive, Mercer, Notch Ordering, Randstad, Relias, SHRM, SHRM, Tiny Pulse, The Washington Post
