40 Employee Turnover Statistics to Know
The fight for top talent is on and shows no sign of stopping. With unemployment currently at 3.6 percent, it’s all the more vital for employers to hang onto their top employees. Turnover — both voluntary and involuntary — is unavoidable; a healthy turnover rate is par for the course.
Still, there are steps you can take to prevent voluntary turnover and keep your employees engaged. Understanding the root of turnover is the first step to effective recruiting. Read on to learn 40 of the most impactful employee turnover statistics out there.
Table of Contents
- General Employee Turnover Statistics
- The Cost of Employee Turnover
- The Effect of Employee Engagement on Turnover
- How Management and Leadership Influence Turnover
- Company Culture's Impact on Turnover
- Promote Employee Recognition to Reduce Turnover
- Importance of Professional Development Opportunities
- How Onboarding Affects Turnover
- Perks And Benefits That Influence Turnover
General Employee Turnover Statistics
1. Between 60-70% of all employee turnover is voluntary.
You don’t have to say goodbye to your top performers. In fact, the more employees you lose is a direct result of your decision not to make improvements. Your employee retention strategy must be clearly outlined while remaining highly adaptable. Collecting and incorporating employee feedback is vital to creating an effective action plan that reduces turnover.
2. 80% of all employee turnover is a result of poor hiring decisions.
Despite your need to fill roles quickly, the wrong hire can cost you more in the long run. Take the time you need to carefully create a candidate persona, train your hiring managers, source candidates and evaluate applicants. Taking longer to fill the role with the most qualified candidate is far better than rushing to hire an OK candidate.
3. The average annual turnover rate is 19%.
This estimate represents all turnover — voluntary and involuntary. Keep in mind that turnover rates vary greatly by industry and even more from company to company. As a result, regularly calculate your turnover rate to keep tabs on how you’re doing.
4. Approximately 3 million U.S. workers leave their job each month.
And yes — that’s voluntary turnover. This is a serious cause for concern for employers and recruiters. Remember, though, that turnover is unavoidable; every organization will experience unwanted separations at one point or another. Still, with roughly 2% of the entire U.S. workforce being turned over on a monthly basis, employers need to get serious about their retention strategy.
5. 63% of CFOs report an increase in employee turnover over the past three years.
Turnover is on the rise, which means you probably have a good chance at bringing in a top performer from another company, but you’re more susceptible to losing your own employees. In order to combat the turnover swell, you must A) keep your current employees engaged, and B) improve your employer brand to attract new, great talent.
The Cost of Employee Turnover
6. CFOs believe lost productivity, new hire training and recruiting are the most costly consequences of employee turnover.
An employee separation is a financial vacuum for businesses. Not only are resources consumed as internal and external recruitment costs — i.e., the cost-per-hire — but businesses suffer every day a position remains unfilled in the form of lost productivity, depleting employee morale and project delays. While intangible costs are difficult to calculate, they are key aspects of a mounting cost-of-vacancy.
7. Companies with low turnover rates bring in four times higher profits on average.
Conversely, a high rate of turnover negatively impacts your profit margins.
8. On average, it takes one to two years for a new employee to be fully productive in their role.
The consequences of employee turnover can last up to two years. Think about how many projects you could finalize, products you could launch and profits you could bring in during that time. Losing top performers due to voluntary turnover directly impacts your bottom line long after you hire their replacement.
The Effect of Employee Engagement on Turnover
9. A highly engaged workforce can reduce a company’s turnover rate by 25-59%.
Employee engagement is the degree to which an individual is invested in, motivated by and committed to the work they do and organization they work for. Thus, the more engaged an employee is, the more likely they are to stick around for the long haul. Disengaged employees, on the other hand, will be quick to leave and can cause serious damage to your overall engagement levels.
10. 69% of disengaged employees would quit their current job for a 5% pay raise elsewhere.
It doesn’t take much to attract or drive out disengaged employees. Engaged employees, on the other hand, require much more convincing due to the fact that they’re passionate about and invested in their company. Highly engaged employees say they would need a 20% pay raise to leave their current role.
11. Organizations with historically high turnover rates saw a 25% reduction in turnover after improving their employee engagement efforts.
How Management and Leadership Influence Turnover
12. 92% of workers believe having empathetic leaders is critical to strong retention.
No one wants to work for a demanding boss with unrealistic expectations. Empathetic leaders — those who are understanding, care about their employees and promote flexibility — are the kind of managers people want to work for. It should come as no surprise that more than 90% of individuals factor this into their decision to stay at a company.
13. 48% of employees say that if leadership asked for their feedback and acted on it, it would help to reduce voluntary turnover.
The simple act of asking employees for their feedback demonstrates empathy and compassion. On top of that, it gives employers the opportunity to make improvements to the organization before small problems become big ones and drive team members away. Frequent employee engagement surveys are an effective way of collecting feedback without overexerting resources.
14. At a minimum, managers account for 70% of the variance in employee engagement scores.
In short, an employee’s level of engagement is primarily determined by their direct manager. If the relationship is positive, the employee is more likely to be engaged in their role and loyal to the company for longer.
15. Organizations that implement regular feedback experience 14.9% less turnover.
Establishing a consistent cadence of employee feedback sessions can improve the quality of communication between managers and their direct reports. Ultimately, this helps to strengthen the employee-manager relationship, which can effectively reduce turnover and its associated costs. Additionally, conduct regular stay interviews and implement an exit interview program to understand what your employees value and what’s driving them away.
16. Employees are twice as likely to be disengaged if they’re ignored by their manager.
Alternatively, a poor relationship with the direct manager will drive the individual toward disengagement. Employees want to communicate regularly with their managers, even if it’s not to receive praise for a job well done. In fact, 82% of workers say they appreciate constructive feedback, regardless of if it’s positive or negative.
17. Roughly 50% of employees would leave their job if they felt unappreciated by their direct manager.
Employees interact with their manager on a regular basis. If the employee perceives a lack of respect and feels undervalued during the majority of their work interactions, they’re not going to stick around. It’s as simple as that.
18. 77% of employees with bad managers say they hope to leave their job soon.
19. Employees who rate their managers poorly are 4 times more likely to interview for other positions when compared to their peers.
The old adage is true: people don’t leave jobs, they leave bosses. A direct manager largely influences an employee’s career growth and day-to-day responsibilities. Bad managers do not foster engagement and pose a barrier to the employee’s success. As a result, an ineffective manager is a major cause of turnover.
Company Culture’s Impact on Turnover
20. 32% of new hires who quit within the first 90 days cite company culture as the reason for leaving.
A toxic company culture is easy to suss out. The way you do business, treat your employees and how they treat one another are all obvious elements of your office culture. Keep in mind that some onboarding programs can take upward of 90 days, which means new hires won’t even be fully acclimated before they decide to hit the road.
21. Not liking their organization’s culture makes employees 24% more likely to quit.
While hiring solely for culture fit will lead to a culture of carbon-copy employees, you must look out for the warning signs that indicate a prospective employee would not agree with your type of organizational culture. During the interview process, confirm that they share your core values, believe in your company mission and are passionate about the role.
22. 77% of job seekers would evaluate a company’s culture prior to submitting a job application.
23. 56% of employees rank company culture as more important than salary.
Today, in a job seeker’s market, employers must be prepared to negotiate salary with top candidates. Still, be mindful of that fact that for over half of employees, culture trumps compensation. Dedicating resources to build a strong company culture can help you attract top talent and minimize added payroll expenses.
Promote Employee Recognition to Reduce Turnover
24. 79% of employees who quit their jobs cite a lack of appreciation from their employer as a key factor in their decision to leave.
In addition to a competitive salary and exciting benefits package, highlighting employee achievements is a great way to show your appreciation. Employees want to know their efforts aren’t going unnoticed and that their contribution is valued; it’s a critical aspect of employee engagement. Failing to recognize employees could drive them out the door and towards a more supportive employer.
25. Roughly two-thirds of full-time employees report feeling burned out on the job.
Turnover can lead to employee burnout, putting your company at risk for additional turnover. When one employee leaves, their responsibilities fall to their teammates which, if the workload is too large, can drive them to look for other jobs.
26. 37% of employees claim recognition is the most important form of employer support.
Keep in mind, however, that not every employee is going to respond well to public recognition — 43% prefer to receive praise privately, so be flexible with how you choose to highlight your team members’ achievements. Consider acknowledging your employees during one-on-one meetings, in employee spotlights, via anonymous shoutouts or through a company-wide communication channel.
Importance of Professional Development Opportunities
27. 42% of millennial employees say learning and development opportunities are the most important factor when considering a job opportunity.
Before they’re even in the door, job seekers are scouting your learning and development opportunities. This is particularly relevant for young professionals who are eager to grow and successfully launch their careers.
28. 43% of employees report leaving their company due to career path constraints.
While some employees might be content in their current role for years to come, most want to grow and advance. In fact, when considering job offers, 54% of job seekers say career growth opportunities are more important than compensation.
29. 93% of employees would stay at their job longer if the organization invested in their careers.
Just as a lackluster employee development strategy is a driver of turnover, creating growth opportunities positively influences retention. Encourage managers to prioritize career pathing with direct reports, implement a lunch and learn program or offer a professional development stipend. Investing in your employees’ growth upfront can save you a ton in lieu of vacant roles.
30. Employees are three times more likely to look for another job if they feel the organization does not support their career growth.
Even if they aren’t currently advancing in their role or career, employees want to know that their employer is committed to their growth. Continued learning is important in developing technical and soft skills that make good employees great ones, and preparing individuals for more senior roles.
31. Employees are 20% more likely to hold the same job in a year if they feel like they are advancing in their career.
Just like a lack of growth opportunities will send employees packing, helping your team members grow in their roles and develop their careers will encourage them to stay. Lunch and learns, mentorship programs and training sessions are all effective employee engagement ideas.
32. 87% of millennials say that access to professional development opportunities is a key factor of their decision to stay in their role.
Millennials are notorious for job hopping. However, 56% of millennials believe that an employee should stay at the same company for more than 20 years. Why, then, are they constantly on the move? A majority are looking for opportunities to grow that they aren’t getting from their current employer.
How Onboarding Affects Turnover
33. 69% of employees are more likely to stay at the company for three years if they experience a good onboarding process.
Effective onboarding is crucial to ensuring employees have the tools and resources to succeed in their role. Not only should you carefully review responsibilities, expectations and office policies, but you should also introduce them to elements of your company culture.
Train them in your core values and mission statement so they are empowered to engage with their peers in a purposeful way. Employees don’t stick around simply because they enjoy the work; the employee experience — office space, organizational culture and colleague relationship — all influence retention.
34. Poor onboarding makes new hires eight times more likely to become disengaged.
An onboarding experience in which employees are only instructed in their role and not made to feel like part of the team will disengage employees. Again, the emotional connection employees feel to their organization influences their productivity, happiness and desire to stay.
35. 91% of employees who received effective onboarding and training feel strongly connected to their company and work.
36. 46% of workers say their organization’s training opportunities make them more inclined to stay at the company.
Incorporating training courses into your onboarding process shows that you support and value your employees. Additionally, it sets them up for success in their new role. When employees have the tools and resources they need to do their job effectively, they’re more likely to engage with their work.
Perks And Benefits That Influence Turnover
37. U.S. employers that offer and support remote work opportunities experience 25% lower turnover rates.
With the gig economy on the rise, employers can’t afford to not offer remote work to employees. Doing so can actually improve their overall retention rates: 76% of employees claim they would be more loyal to their current employer if flexible work options were offered. Not only can telecommuting opportunities lower your overhead costs, you can minimize payroll expenses; 28% of workers say they would take a pay cut for the opportunity to work remotely.
38. 67% of employees with a company-provided wellness scheme report being more engaged with their employer’s goals and mission.
Happy and healthy individuals are more engaged as employees. Including wellness offerings in your benefits package shows that you value your people and care about their overall health and happiness. This organically fosters engagement and encourages them to truly invest in the long-term success of the company.
39. 96% of employees who volunteer say their workplace culture is positive.
Volunteering encourages employees to connect on a more personal level while contributing to causes they’re passionate about. Furthermore, it gives the organization a purpose beyond profit margins, which makes employees less likely to leave their job, even for a 10% pay bump.
40. 88% of highly engaged employees say they have the flexibility to choose where in the office they’d like to work depending on their tasks.
As long as the assignment is done well, it shouldn’t matter where in the office your employees are working from. Staring at the same wall or computer screen all day can be pretty dreary and cause a creative rut. If remote work isn’t a possibility for your organization, give your employees the opportunity to choose their workspace in the office. Doing so will naturally encourage engagement.
Remember, turnover varies by industry and every company is unique; your turnover rate may be influenced by some of these factors more than others. Collect regular feedback to shed light on the source of turnover within your office, and get in the habit of regularly calculating turnover rate.