When it comes to work and companies, people come and go, right? That might be true, but it’s also an issue. According to the latest employee retention statistics, companies can’t afford to keep losing people and recruiting new ones to replace them.
If you’re uncertain of what employee retention is - it’s the number of employees a company manages to keep in a specific period. The turnover rate is the ratio between old and new employees - sometimes also called an attrition rate.
Fresh talent is always welcome. 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? Below are the most recent statistics about employee retention we’ve compiled to examine this issue.
Crucial Stats on Employee Retention - Editor’s Choice
- 45% of US employees are currently looking for a better position elsewhere.
- Employee retention rates hit a record low in March 2020.
- By 2030, low retention will cost $430 billion.
- Good retention can maximize company profits up to four 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 that lead to low retention, but let’s start with basic stats as an introduction.
1. 31% of employees quit a job within the first six months.
A new employee needs to be guided and 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 take into consideration employee loyalty statistics.
Seasoned employees are usually more sought-after, and they’re quick to see if their new workplace is going to satisfy their professional needs for career growth.
2. 41% of employees whose jobs require specialized training plan to ask for a raise in the next 12 months.
Retention of employees is becoming more and more difficult, and employees with specialized training are empowered workers, a PwC study conducted in March 2022 shows.
About half (49%) of respondents said their job requires specialized training, and 37% of these employees planned to ask for a promotion in the next 12 months, compared to only 21% of those whose jobs don’t require specialized training, according to PwC’s Global Workforce Hopes and Fears Survey 2022.
However, the same study also shows that more specialized workers are also more loyal workers - 45% of them would recommend their employer as a place to work, compared to only 29% of those whose jobs don’t require specialized training.
3. Only 28% of employees feel connected to their company's mission.
(Harvard Business Review)
When an employee can identify with the company’s mission, they’re passionate and engaged, pushing themselves to work harder. However, statistics on good employee retention indicate that only 28% of employees feel this way as they go to work, pointing to the need for companies to work on employee engagement.
It’s no wonder many employees quit their lucrative but personally unsatisfying jobs to engage in professions that will provide a sense of purpose and fulfillment, becoming human rights lawyers, for example.
4. 45% of surveyed US employees are currently looking for a better position.
Just because an employee isn’t showing clear signs of leaving the company doesn’t mean they’re not actively looking. The majority of workers are aware of how their job benefits compare to others in the market, employee turnover statistics show.
As part of the 2022 Job Seeker Nation Report survey, more than 1,500 US employees were interviewed, the results showing that 45% are searching for a new position or planning to do so in the upcoming year.
With no clear action from the employer to keep them engaged, employees in fast-changing industries, like technology, will eventually quit their jobs, contributing to a company’s low employee retention rate.
5. In 2021, the national average turnover rate was 47.2%.
(Bureau of Labor Statistics)
The number of people in the US workforce is increasing each year and has never been this high. But, the turnover rates are rising, too, though some stabilization has been seen since the momentous 56.8% in 2020. Employee retention statistics for 2018 show that the turnover rate was 44.5%, while the average turnover rate in 2019 stood at 45.1%.
6. Median tenures indicate that employees will typically stay with their company for 4.1 years.
(Bureau of Labor Statistics)
Can an employee ever be truly loyal to their organization? Well, there are certainly limitations to one’s expression of loyalty in the professional world. Employee loyalty statistics show that the median tenure of an employee is 4.1 years, depending on the industry and position. For example, managers usually have the longest tenure - about five years.
7. By 2030, the US is expected to lose $430 billion due to low talent retention.
High turnover is expensive, and it’s only going to become more expensive in the future, labor statistics have shown. Based on the employee turnover rate by country, 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, compared to $147.1 billion that China will sustain in losses due to not retaining employees, for example.
8. On average, a higher retention rate can maximize a company's profits up to four times.
Obviously, turnover costs can add up. On the other hand, statistics on good employee retention all point to a logical conclusion that a high retention rate means maximizing profits.
Still, it’s not all in the sheer number of employees leaving or being laid off. An effective retention strategy also means motivating those who have been with the company longer, as they usually have better performance and knowledge of the firm’s processes and policies.
9. 87% of HR experts consider retention to be among the highest priorities in the next five years.
That sounds like a fairly high and concerning percentage, right? Well, even though the overwhelming majority of HR experts view retention as a high-priority issue, 20% of them also think that retention is only going to decrease based on current employee retention data.
The interviewed HR managers have emphasized a lack of funding in many companies, outdated and manual technology, and the lack of executive support in reducing turnover.
So what is really happening in the labor 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 we take a further look into employee retention, it’s becoming more obvious that each day on the job matters. Time is valuable when you want to ensure high-performing employees stay with the company.
10. Up to 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, up to 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 five years down the line.
12. On average, an entry-level employee's leaving can cost the company up to 50% of the employee’s annual salary.
When one employee leaves an enterprise, it takes time to recruit and train a new one. The training process is costly and followed by lower work productivity. If the employee’s average salary is $50,000, the turnover cost can be as much as $25,000, employment turnover statistics indicate.
The cost of replacing an employee higher up the ranks can cost up to 150% of their annual salary - even more reason to increase retention.
13. The cost of replacing a trained employee can exceed 200% of their salary.
With the increase in the average turnover rate, the total cost of turnovers increased as well. While the previously mentioned replacement cost of 33% of the employee’s compensation is an average, the real cost depends on the industry and range of the job.
According to recent data on the cost of employee turnover, turnover in executive positions can cost up to an incredible 213%.
14. Companies with optional remote work boast a 25% lower turnover.
When it comes to workplace trends, more than half of US companies allow their employees to work remotely. Statistics on good employee retention rates show that employees would like to be able to work from home at least once a week.
Among the reasons for leaving their job, employees often cite difficulties in maintaining a work-life balance. Not surprisingly, the remote work option 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 employee retention strategy within a company, setting 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.
However, without clear expectations and a deadline, it’s hard to recognize and reward employees’ work down the line.
16. 63% of CFOs say that employee turnover has increased in recent years.
CFOs themselves corroborate that employee retention statistics are concerning. 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, these professionals agree that the lost productivity represents a higher cost with low job retention rates.
17. On average, companies in the US had turnover rates by one percentage point higher in 2021 compared to those in the EMEA region.
When it comes to last year’s data, 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 turnover rates that were around one percentage point lower, according to attrition statistics.
Still, experts predict that Europe’s rates will soon come close to the average rates in the US.
18. The employee turnover rate reached a staggering 20% in 2021, having doubled from the previous year.
(Bureau of Labor Statistics, Finances Online)
As everyone has noticed by now, the COVID-19 pandemic has had a significant impact on the job market. Due to lockdowns and decreased economic activity that ensued, employee retention statistics are looking a bit bleak. At 9.7%, the average turnover rate was especially high in March 2020, at the beginning of imposed lockdowns.
Moreover, with the consequences of the pandemic and shifts in employee attitudes, the turnover rate increased twofold, reaching a whopping 20% in 2021.
What Do Employees Need To Stay?
All of the employee retention stats above indicate that employee turnover inevitably happens to some extent. But there are actions that employers can take to maintain desirable levels of retention rates. The following stats go to show how employees feel about their current job and their employers.
19. 44% of employees would accept a job in another company if offered a 20% raise.
Although the pay is certainly not everything, it seems to be pretty important. According to Gallup statistics on employee retention and work from home, almost half of workers would leave their job for a raise of up to 20%. It’s up to companies to decide what’s more profitable: raising salaries or dealing with the costs of low retention.
We’re in the midst of what many have called the Great Resignation. However, others have pointed out that Americans aren’t quitting altogether, just trying to secure higher salaries and more rewarding perks, hence the name - the Great Renegotiation.
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 lucrative position. And that’s despite the fact that 25% of employees feel disconnected from the company's mission and philosophy.
When it comes to favorable employee loyalty statistics within a company, where the company stands ethics-wise matters to employees.
21. Recognizing employees will make 37% of them more likely to stay with the company.
Acknowledging employees for their work is the staple of a 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. In addition, employees would like to feel inspired and given autonomy by their team leaders.
22. Nearly 80% of employees report they would look for another job after one 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 the majority of employees would leave their job due to a single day gone wrong. Keep in mind, though, that such bad days are usually the result of accumulated dissatisfaction which can, to a major extent, be prevented.
23. 24% of millennials expect to leave their job within two years.
The millennial segment of the population largely contributes to a low employment retention rate. That said, the percentage of millennials who said they would likely leave their job within two years fell considerably in comparison to 2019 when it stood at 49%.
This generation of workers is unfortunately at risk of burning out at work, with 38% of them feeling stressed out all the time. On the other hand, 40% of Gen Zers intend to leave their jobs in the upcoming two-year period, and 46% of them feel stressed out all or most of 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. When considering ways to keep employees happy and motivated, below are some steps management can take toward boosting loyalty among staff.
24. Experts in HR report that employee burnout is responsible for up to 50% of the annual turnover.
Some companies which turn to HR experts for help report they’ve gone to great lengths to recognize their employees’ hard work yet are still compelled to deal with high turnover. So, when it comes to employee retention in America, nearly half of the workforce is simply overworked, regardless of the praise received.
25. Retention can be 30% higher owing to improved management transparency.
As we’ve noted, employees appreciate good company ethics. Transparency is one of the essential steps in the process. When a company improves transparency, employees feel valued and more connected to the company’s goals. Consequently, the employee retention rate becomes much higher owing to regular and honest communication.
26. The happiness of an employee is 23.3% more dependent on their co-workers than on their supervisors.
You’ve heard the saying: a happy worker is a good worker. According to recent studies, an employee’s 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 cooperate, as a toxic company culture will probably lead to higher turnover.
27. A good onboarding experience can make a difference, making it more likely for 69% of employees to stay with the company for at least three years.
Employee engagement and retention statistics point to the first six months as the most important period for new employees. That’s why good onboarding can make all the difference. In line with this, we can safely say that a warm welcome and building rapport with 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 positive work companies are doing during the onboarding stage. This way, employees have control over their learning process.
29. Highly engaged employees are 87% less likely to look for another job.
Employee engagement and retention statistics reveal another insight that pertains to low turnover: Well-engaged employees are far less likely to look elsewhere for what they need. But before they begin implementing a higher engagement strategy, companies need to develop tools for measuring engagement by soliciting feedback and job satisfaction surveys.
30. Young professionals want new challenges: 93% of them left their last employer voluntarily.
When it comes to the young generation of workers, employers are dealing with a paradox, according to statistics on job retention rates. On the one hand, this generation of employees is the closest to burnout while also being job seekers who yearn for new challenges.
This is an important next step for enterprises: Balancing levels of job satisfaction through benefits with just the right amount of new challenges.
Leaving the employee turnover rate to chance is probably one of the least advisable approaches a company can adopt. 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, making it necessary to earn the loyalty of high-performing and committed employees. That’s why these employee retention statistics should be taken into account before devising an optimal strategy for your company.