Employee retention is a metric that measures a company’s capability of keeping high-performing employees and preventing turnover—and it is an important aspect of any successful business. Apart from increasing engagement, productivity, and job satisfaction, strong employee retention can save your business money by negating the need for turnover-related expenses.
Some important stats to remember:
- Nearly 1 in 5 workers quit in their first year.
- 76% of employees are more likely to stay with the company if promoted from within.
- Companies with high employee engagement have lower turnover rates.
By keeping an eye on current employee retention statistics, such as those we cover below, you can stay ahead of the trends and keep your employees happy within your company.
1. Employee Tenure Averages 4.1 Years (BLS)
Average employee tenure has dropped a bit in the past decade (from 4.6 years in 2012 to 4.1 years in 2022). Men have slightly higher average tenure than women (4.3 years vs 3.8 years), and tenure can vary widely by industry, primarily due to the average age of the workforce within that industry.
2. Voluntary turnover could reach 24% or more in the coming years (Gartner)
Before COVID-19, companies saw voluntary turnover rates of about 20%. According to Gartner, for the foreseeable future, companies should expect their turnover rates to increase by about 4%. This increase is a result, at least in part, of employee expectations that changed during the pandemic, including the availability of remote or hybrid work arrangements.
3. 93% of companies are concerned about employee retention (LinkedIn)
This might seem high, but consider that this number includes every industry, as well as both voluntary and involuntary turnover. Voluntary turnover is often higher in smaller and newer companies, as they grow fast and work to find the right culture.
If you’re seeing high employee turnover rates as an established business it’s time to look internally, perhaps at your employee management process.
4. The total separation rate in 2021 was 47.2% (BLS)
That sounds terrifyingly high—but consider that this employee retention metric from the Bureau of Labor Statistics includes all industries throughout the country and is not adjusted for seasonal employees. However, if your organization’s turnover is at, or near, these levels, you may have some work to do.
NOTE: At the time of this article, 2022 data had not yet been released by the Bureau of Labor Statistics.
5. Retail trade saw higher turnover in their organizations by the end of 2022 (BLS)
With turnover much higher than normal, it can be a struggle to hire and keep great employees. Companies have to work to engage employees and provide them with the benefits they seek, like flexibility in their work location and schedule. It’s also important for companies to recognize the limits of employees. Too much pressure and work, combined with not enough hours in the day, leaves employees feeling unsatisfied and dejected.
Learn how to calculate your business’s employee turnover.
6. Replacing an employee costs up to twice the amount of the employee’s salary (Enrich)
While lower-level positions are usually easier to fill, higher-level positions can be extremely costly to fill when an employee leaves. This expense comes from the actual salary, training and onboarding time, plus job board fees and lost productivity.
7. More than half (59%) of American workers experience at least moderate levels of burnout (Aflac)
According to research, more than half of US workers are at least moderately burned out. This number is significantly higher than reported post-pandemic. Burnout comes mostly from having too much work to do, being treated unfairly, poor management, and a lack of clarity about what the employee’s role requires.
8. 47% of employees think work is stressing them out (Officevibe)
Partly from burnout, workers think their workplace contributes to their higher levels of stress. Wellness programs are great, but just reminding employees to meditate before they start their workday or offering a gym membership isn’t enough. Employers need to treat the whole employee, including taking a hard look at an employee’s learning style, manager, workload, and personal and professional goals.
9. Nearly 1 in 5 workers quit in their first year (BambooHR)
It’s often agreed that it takes several months before a new hire is up and running. Your company may be evaluating them and their productivity, making internal decisions about whether the employee was a good hire—and they’re also doing the same to you. In that first year, they’ll learn if the work is what was described during the interview, how their manager treats them, and if they’re really passionate about the work they’re doing.
Our new hire checklist can help ensure you get your employees off to a good start with your organization.
10. 57% of employees wouldn’t recommend their workplace to a friend (Officevibe)
This should alarm every business. In addition to missing out on some great employees (word-of-mouth referrals often lead to the best employees), this stat doesn’t bode well for retention. If your employees can’t recommend your company as a good place to work, are they going to stick around for the long term?
11. 48% of workers leaving their jobs change industries (McKinsey)
For many people making a job change, it’s about more than just escaping a particular workplace. It’s often about doing something else that they’re more passionate about.
You can work to retain some of these employees by offering learning and development opportunities, especially if you have roles that might interest them more.
12. 82% of workers have considered quitting because of a bad manager (GoodHire)
Keep a close watch on your management team, especially if you have employees leaving frequently who report to the same manager. People management skills are important and, crucially, they can be taught. Invest in your managers and you’ll see higher retention.
13. 31% of employees wish their manager communicated better (Officevibe)
Especially in remote environments, workers have a strong desire for clear and transparent communication from their manager. They want to know how their work is contributing to the overall success of the company and if they’re on the right track. While formal monthly performance reviews might be too much, regular informal check-ins are imperative to a healthy workforce.
Learn about engaging remote employees with our guide.
14. 73% of remote workers would look for a new job if their company mandates a return to the office (Harris Poll)
This shows how important it is for employees to have some control over where they work. Employees overwhelmingly feel that they’re as productive working remotely as in an office—if not more so. For companies that can support remote workers, it’s a great way to improve employee engagement.
Our remote work statistics article has more information you need to know about the popularity of remote and hybrid work models.
15. Only 12% of employees think their company had a good onboarding experience (TeamStage)
Onboarding employees is a time-consuming process. But to be done right and effectively, it simply has to be longer than one or two days. Speeding up the process is utterly ineffective and will leave new hires without a clear understanding of their role in the organization.
Check out our article on employee onboarding best practices to help reduce your turnover.
16. 39% of employees want more flexible working hours (WorkHuman)
We know employees want flexibility in where they work but now, according to WorkHuman, we also know they want flexibility in when they work. Not everyone is productive from 9 to 5; some people are naturally night owls. This is why, if their work allows, you might consider letting employees work when they work best and shift your performance focus to one of results. Interestingly, more respondents (39%) would prefer flexibility in work hours over a raise (28%).
Need help creating a flexible work schedule policy? Read our article, which includes a free downloadable policy template.
17. 26% of employees prefer fully remote work (PWC)
According to a PWC survey, 56% of workers are able to work remotely. Of all employees, 26% would prefer full-time remote work, but only 18% said their employer is likely to adopt that model. Additionally, 11% would prefer to work full-time in person. If a company is able to operate without employees in the office, a remote environment may increase employee productivity, engagement, and happiness.
18. 76% of employees are more likely to stay with the company if promoted from within (LinkedIn)
Employees want to see their growth potential in your company. If you have a clear culture of promoting from within, giving employees high internal mobility, you will typically see employees with tenure twice that of companies with low internal mobility. Internal promotions and advancements also result in employees who are three-and-a-half times more likely to be engaged.
19. Companies with high employee engagement have lower turnover rates (Wellable)
It is reported that highly engaged workers are 87% less likely to leave their companies. This shows the crucial importance of having engaged employees and, ultimately, high employee retention.
Bottom Line
Employee retention is affected by a lot of factors that you can control—your company’s culture, employee engagement, and your overall onboarding process. Although turnover is inevitable, there are several things you can do to limit it. By taking note of the prevailing employee retention metrics in today’s workplace, you can take some precautions and move your business in the right direction.
