When it comes to work and companies, people come and go, right? Sure, that’s true, but it’s also an issue. According to the latest employee retention statistics, companies can’t continue to afford to lose people and recruit new ones to replace them.
If you’re uncertain of what employee retention is — it’s the number of employees a company managed to keep in a specific period of time. The turnover rate is the ratio between old and new employees — sometimes also called an attrition rate.
Fresh talent is always welcomed. But at a certain point, the costs of hiring-replacing circuits can easily skyrocket.
Why does it happen so often and what can be done? We’ve got the most recent and incredible statistics about employee retention to examine this issue.
Crucial Stats on Employee Retention (Editor’s Choice)
- 65% of employees think they can find a better position elsewhere.
- Employee retention rates hit a record low in March 2020.
- By 2030, low retention will, on average, cost the US $430 billion annually.
- Good retention can maximize company profits up to 4 times.
- 87% of HR experts consider employee retention among the highest priorities.
- 20% of turnover happens in the first 45 days of work at a new company.
Employee Retention Stats: What You Need To Know
There are several factors contributing to low retention, but let’s start with basic stats as an introduction.
1. 31% of employees have quit their job within the first 6 months of starting.
A new employee needs to be pushed in the right direction, while being properly acknowledged for their work and talent. If engagement and appraisal don’t really match up with an employee’s early expectations, they will soon check out. It’s one of the reasons why businesses are starting to worry about employee loyalty statistics data.
Seasoned employees are usually more sought-after and they’re quick to see if their current workplace is going to satisfy their professional needs.
2. More than 50% of employees feel they would be able to find another job in the next 6 months.
The fact that retention of employees is becoming more and more difficult is only underlined by the belief of employees that they would land on their feet. More than half of employees feel they could find another job if their company laid them off, which says a lot about their confidence and motivation.
Are employees confident with reason or are they simply not motivated enough in their current work?
3. Only 25% of employees feel connected to their company's mission.
Among the heaps of bland statistics on good employee retention, this one stands out. When an employee can identify with the company’s mission, they’re passionate and engaged, pushing themselves to work harder and smarter. Only 25% of them feel this way as they go to work, which is something companies need to work on.
4. 65% of tech employees think they can find a better position.
Just because an employee isn’t showing clear signs of leaving the company, that doesn’t mean they’re not actively looking. The majority of workers are very aware of how their job benefits compare to others in the market, employee turnover statistics show.
With no clear action from the employer to keep them engaged, employees in fast-changing industries, like technology, will likely leave eventually, contributing to a company’s low employee retention rate.
5. In 2019, the national average turnover rate was 36.4%.
The number of people in the workforce in the US is increasing each year and has never been this high. But, the turnover rate is increasing each year as well. Employee retention statistics for 2018, show that the turnover rate was 27%, while the average turnover rate in 2019 stood at 36%. Since 2010, the turnover rate has increased by a staggering 88%.
6. On average, an employee will stay with the company for 4.2 years.
Can an employee ever be truly loyal to their organization? Well, perhaps there’s a reason why we separate family and friends from work. There are certain limitations to one’s expression of loyalty in the professional world.
Employee loyalty statistics show that the average tenure of an employee is 4.2 years, depending on the industry. For example, managers usually have the longest tenure — 6.4 years.
7. By 2030, the US is going to lose $430 billion annually due to low talent retention.
High turnover is expensive and the current data indicates that it’s only going to become more expensive in the future. Based on the employee turnover rate by country 2018, experts predict that the US will have to deal with the largest increase in turnover costs.
By 2030, the US will lose a whopping $430 billion annually, compared to costs of $147.1 billion in China, for example.
8. On average, a higher retention rate can maximize a company's profits up to 4 times.
Obviously, turnover costs can add up. Statistics on good employee retention all point to a logical conclusion: a high retention rate means maximizing profits. It’s important to remember that it’s not all in the number of employees leaving or being laid off.
Maximizing profits through a higher retention rate also means focusing on the type of employees who stay with the company — those who have been with a company longer can have better performance and knowledge of processes.
9. 87% of HR experts consider retention to be among the highest priorities in the next 5 years.
That sounds like a fairly high and concerning percentage, right? Well, even though a huge majority of HR experts view higher retention as a high priority issue, 20% of them also think that retention is only going to become even more low, based on current employee retention data.
They’re emphasizing a lack of funding in many companies, outdated and manual technology, and the lack of executive support in reducing the turnover.
So what is really happening in the work market right now that turnover and retention rates are skyrocketing? Keep reading for a closer look at the current employee retention stats.
Statistics On Employee Retention: A Detailed Overview
As you take a further look into employee retention, it’s becoming more and more obvious that each day on the job matters. Time is incredibly valuable when you want to ensure high-performing employees stay with the company.
10. 20% of turnover happens in the first 45 days of work at a new company.
Some experts now suggest approaching a new job as if you’re approaching dating a new person. It makes sense, on both ends: do you like the challenges of the job and will you grow in your workplace? Is your new employee a smart hire who will positively affect your annual employee retention rate? In the first 45 days, 20% of both sides answer these questions with a “no”.
11. The turnover rate is 10 times higher for employees leaving within the first year.
Statistics on employee retention indicate that most employees start to rethink their jobs as they approach their work-anniversary. But they are 10 times more likely to leave around their first anniversary than 5 years down the line.
12. On average, an employee's leaving will cost the company 33% of their annual salary.
When an employee leaves a company, it takes time to recruit and train a new one. The training process is costly, and followed by lower work productivity. If the median employee’s salary is $45,000, the average turnover cost can be around $15,000, employment turnover statistics indicate.
13. The cost of replacing a trained employee can be more than 200% of their salary.
With the increase in the average turnover rate, the costs of turnovers increased as well. While the previously mentioned cost of replacement of 33% of the employee’s salary is an average, the real cost depends on the industry and range of the job. According to data on the cost of employee turnover in 2019, the cost of turnover in executive positions can go up to an incredible 213%.
14. Companies with optional remote work have a 25% lower turnover.
Right now, more than half of US companies offer the option of working remotely. Statistics on good employee retention rates show that employees want the option to work remotely at least once a week. Among the reasons for leaving the job, employees often cite difficulties in maintaining work-life balance. Not surprisingly, the option of remote work can significantly affect the turnover rate. In fact, remote working statistics show that 68% of employees worldwide say they are successful in working from home.
15. 60% of companies don't have clear goals set up for new employees.
When it comes to a good retention strategy within a company, setting up clear goals for new employees is one of the major steps. According to statistics on employee development and retention, 60% of companies indicate they usually don't include this step when hiring new people. Without clear expectations and a deadline, it’s hard to recognize and reward employee’s work down the line.
16. 63% of CFOs say that employee turnover has increased in the last 3 years.
CFOs themselves confirm the current state of concerning employee retention statistics. Being in executive positions, they report witnessing the loss of productivity and company morale, all due to high turnover rates. When it comes to turnover costs, they agree that the lost productivity presents a higher cost with low job retention rates.
17. On average, companies in Europe have 4% lower turnover rates.
In the period from 2015 to 2019, statistics on employee retention showed lower turnover rates for companies in Europe. Compared to the US, companies in Europe, the Middle East, and Africa had around 4% lower turnover rates, according to attrition statistics. Still, experts predict that Europe’s rates will soon come close to average rates in the US.
18. In March 2020, the turnover rate reached a record high with 9.7%.
As you probably know, the COVID-19 pandemic has had a significant impact on the job market. Due to lockdowns and decreased economic activity, employee retention statistics for 2020 are looking a bit bleak. The average turnover rate was especially high in March, at the beginning of imposed lockdowns.
What Do Employees Need to Stay?
All of the employee retention stats above indicate that employee turnover inevitably happens at some rate. But higher rates can be prevented. Before coming up with solutions, the following stats go to show how employees feel about their jobs and their employers.
19. 44% of employees would accept a job in another company if offered a 20% higher pay.
The pay is certainly not everything, but it seems to be pretty important. According to Gallup statistics on employee retention and work from home, almost half of people employed would leave their job for a raise of 20% on what they already make. It’s up to companies to decide what’s more profitable: raising their pays or dealing with costs of low retention.
20. 79% of employees wouldn't take a better paying position in a company with questionable ethics.
The majority of employees won’t turn a blind eye to a company's bad ethics, even if they’re offered a better paying position. And that’s despite the fact that 25% of employees feel disconnected from the company's mission and philosophy. When it comes to securing good employee loyalty statistics within a company, where the company stands ethics-wise matters to employees.
21. Recognizing employees will make them more likely to stay with the company.
Acknowledging employees for their work is the staple of the good retention strategy. It’s basic behavioral psychology: when people are praised for good work, they’ll continue to do more good work and start to feel like they belong in their workplace, statistics on reducing employee retention indicate.
22. 80% of employees report they would look for another job after 1 really bad day at work.
It’s hard to say what constitutes a really bad day at work but recent job retention rate data indicate that a large majority of employees would leave their job due to 1 bad day. Keep in mind that such bad days are usually results of accumulated dissatisfaction which can, to a major extent, be prevented.
23. 31% of Millennials expect to leave their job within two years.
The Millenial population, traditionally, largely contributes to a low employment retention rate. That said, the percentage of Millennials who said that would likely leave their job within two years has fallen compared to 2019 where it stood at 49%. This generation of workers is unfortunately at risk of burning out at work, with 44% of them feel stressed out all the time.
What Needs To Be Done: Coming Up With Employee Retention Strategies
For many companies, dealing with low employment retention rates is not going to be successful unless they come up with a solid strategy. These things are essential when considering ways to keep employees happy and high-performing:
24. Experts in HR report that employee burnout is responsible for at least 50% of the annual turnover.
Some companies who turn to HR experts for help report they’ve done all the important steps in recognizing their employees’ hard work and they still deal with high turnover. According to employee retention in America, at least half of them are simply overworked, regardless of the praise they receive.
25. Improved management transparency can lead to up to 30% higher retention.
As we’ve noted, employees strongly value good company ethics. Transparency is one of the essential steps in the process. When a company improves transparency towards its workers they’ll feel included and more connected to the company’s goals. This step can secure a significantly higher employee retention rate.
26. The happiness of an employee is 23.3% more dependant on their co-workers than on their supervisors.
You’ve heard the saying: a happy worker is a good worker. According to recent studies, their happiness depends a lot more on their co-workers than it does on their managers. In an effort to maintain a healthy employee retention rate, big companies take extra care of their everyday culture and morale. It’s good that co-workers compete, but a toxic company culture will probably lead to higher turnover.
27. A good onboarding experience can make a difference — 69% of employees are more likely to stay with the company.
Employee engagement and retention statistics point to the first 6 months as the most important period for new employees. That’s why good onboarding can make all the difference. A warm welcome and fostering good relationships with the new employees matters.
28. When an onboarding process involves e-learning, the retention rate can increase by up to 60%.
Statistics for staff training and new employee retention also report that e-learning can enhance all the other good work companies are doing during the onboarding. This way, employees have control over their learning process and they can overview the training process if they want to.
29. Highly engaged employees are 75% less likely to look for another job.
In chasing low turnover, employee engagement and retention statistics reveal the core of the issue: well-engaged employees are far less likely to look elsewhere for what they need. To begin with a higher engagement strategy, companies need to develop tools for measuring engagement by soliciting feedback and satisfaction reports.
30. Young professionals want new challenges: 93% of them left their last employer voluntarily.
However we frame the young generation of workers, employers are dealing with a paradox, according to statistics on job retention rates. On one hand, this generation of employees is the closest to burnout while also yearning for new challenges.
This is an important next step for combating low employee retention rate statistics in the future: balancing job satisfaction through various benefits with just the right amount of new challenges.
Leaving turnover rate to chance is probably one of the worst things a company can do. Eventually, the costs of dealing with low employee retention rates will seriously affect the company's profits, work culture, productivity, and general morale.
These stats on employee turnover indicate that the job market is undeniably more diverse and more competitive than ever before. The loyalty of high-performing and committed employees needs to be earned. Take these employee retention statistics into account before crafting the best strategy for your company.