Employee retention statistics can help us understand what matters to employees, what makes them quit their jobs, and—critically—how to attract them and convince them to stay.
With workers quitting their jobs in droves in what’s being called “The Great Resignation”, it’s no surprise that employee retention is on the minds of business execs and HR leaders everywhere.
So many people are quitting their jobs right now, and what organizations can do to improve employee retention?
We were shocked to find that the vast majority of employee retention statistics cited by pages with titles like “2022 Employee Retention Statistics” are very outdated. Many of these stats are from surveys conducted back in 2015 and 2017. But the world has changed a lot since then, and so have employees’ attitudes and priorities—especially in light of the pandemic.
So, we dug deeper to surface the most recent and legitimate data on employee turnover and retention. We sought out studies with transparent methodologies and large and diverse sample sizes to get as holistic a picture as possible, taking differences in geography, demographics, industry, and role into account.
Keep reading for the latest employee retention statistics available to help you understand why employees quit and what they care about.
Note that where we’ve mentioned older stats, we’ve endeavored to make it clear.
What is employee retention?
Employee retention refers to organizations’ ability to retain or hold on to their staff. Employee retention measures seek to reduce employee turnover (also known as attrition).
There are a wide variety of reasons employees choose to leave companies. By gaining a better understanding of the reasons people quit, businesses can take action to improve retention.
Why does employee retention matter?
Simply put, not investing in employee retention is expensive.
Gallup estimates that the cost of replacing an employee is one-half to two times the employee’s annual salary.
Some of the reasons for that expense include:
Underresourcing and delays
Impact on employee morale
Loss of organizational knowledge
Loss of innovative thinkers and leaders (opportunity cost)
Impact on customer experience.
Add to that the fact that the companies need to recruit replacements in an intensely competitive—and increasingly international—labor market and retaining top talent becomes absolutely critical to remaining competitive.
The industries with the highest employee turnover rates in the U.S. include Construction, Manufacturing, Wholesale Trade, Retail Trade, Transportation, Warehousing, and Utilities, Professional and Business Services, Healthcare and Social Assistance, Accommodation, and Food Services, and “Other Services.”
Industries with lower average employee turnover rates include Mining and Logging, Information, Finance and Insurance, Real Estate and Rental and Leasing, Educational Services, Arts, Entertainment, and Recreation.
Federal Government employee turnover has remained fairly stable while State and Local Government has seen a significant increase in employee turnover in the past year.
Visier Insights’ 2021 Stop The Exit report, which analyzed more than 9 million anonymized employee records from more than 4,000 companies around the world, revealed that resignation rates are the highest among employees aged 30–45.
Interestingly, 76% of all respondents in the EY study reported being satisfied with their roles, and 93% of employees planned to stay in their current job for at least the next 12 months—in spite of their willingness to change jobs for flexible work conditions.
In knowledge fields in the U.S., people of color are higher turnover risks: 66% of Hispanic employees, 64% of Black employees, and 63% of Asian employees indicated an interest in finding new opportunities, compared to 56% of white employees.
The same study found that working parents are more likely to make a job switch than employees without children, with 62% of working dads and 60% of working moms saying they’re open to changing jobs, compared to 56% of female employees and 51% of male employees without kids.
LinkedIn Learning’s 2021 Workplace Learning Report found that employees at companies with high internal mobility (that hire/promote from within) typically stay almost twice as long as employees at companies with low internal mobility. Employees who move into new roles internally are also 3.5 times more likely to be engaged employees.
Why people quit (and why the stay)
A 2020 study by Work Insititute found that some 75% of employee turnover was preventable. To understand how, it’s important to understand the reasons why people consider leaving their jobs.
The leading avoidable causes of turnover were:
18% Career-related: Opportunities for growth, achievement, and security
10.5% Work-life Balance-related: Scheduling, travel, and remote work preferences
10% Job-related: Enjoyment and ownership in manageable work
7.7% Environment: Physical and cultural surroundings
7% Total Rewards: Compensation and benefits promised and received.
Interestingly, compensation and benefits ranked as the least important consideration for voluntary termination, with factors like the opportunity for career development and work-life balance being far more prevalent reasons for changing jobs.
EY’s global 2021 Work Reimagined Employee Survey, which surveyed more than 16,000 employees across 16 countries and from multiple industries and roles, found that 54% of employees globally said that they would consider quitting their job post-pandemic if they weren’t offered flexibility in terms of where and when they work.
9 out of 10 respondents in the same EY study want flexibility in terms of location and work hours. If they had to choose between the two, 54% would prefer setting their own hours and 40% would choose flexibility in location.
Slack’s October 2021 FutureForum survey found 93% of employees want control over when they work and 76% of workers want flexibility in terms of where they work. These figures have remained consistent over the past two quarterly pulse surveys—across all geographic areas surveyed.
Likewise, 71% of the Future Forum respondents who reported being unhappy with their current role’s level of flexibility are open to seeking a new job in the next year.
The Future Forum pulse report also found that, of knowledge workers currently working fully remotely, 44% of executives would prefer to work at the office every day. In contrast, only 17% of employees wanted to return to the office full-time.
The EY survey also found that, on average, employees would want to work remotely 2-3 days per week after the pandemic, while 22% said they would prefer to work in the office full time.
According to data from Microsoft’s March 2021 Work Trend Index 46% workers are planning to move because they can work remotely now.
In terms of how specific demographics of knowledge workers feel about workplace flexibility, Future Forum discovered that Asian respondents (87%) and Black respondents (81%) want flexible or hybrid work even more than the already high proportion white respondents (75%).
The same study found that 85% of women and 79% of men currently working fully remotely desire flexible or hybrid work.
How career growth and professional development opportunities impact retention
Back in 2018, LinkedIn’s 2018 Workforce Learning Report found that 93% of respondents would remain at a company longer if it invested in their career.
LinkedIn Learning’s 2021 Workplace Learning Report confirms that this trend still holds true. Gen Z employees in particular place a high value on learning in the workplace.
According to Deloitte’s Talent 2020 report, 42% of employees seeking a new job didn’t feel that their company was maximizing their abilities and skills.
Employee burnout is often given as a reason for high attrition rates. Prolonged stress, anxiety, and uncertainty can take a serious toll on employees’ mental health, leaving them fatigued and disengaged at work.
A study by the American Psychological Association conducted in 2014 found that burned-out employees are 2.6 times more likely to be actively seeking new opportunities and 63% more likely to take a sick day.
It’s likely that these numbers have increased significantly in recent years, particularly in light of the disruptions caused by the pandemic.
According to research conducted by McKinsey in 2021, “almost half of all employees report being at least somewhat burned out.”
A more recent Gallup study found that employees are experiencing more daily negative emotions like worry, stress, anger, and sadness than at any point in at least the past 10 years.
As an employer, it’s worth checking in on the
How employee satisfaction and dissatisfaction impacts retention
According to Future Forum’s October 2021 Pulse Report, overall job satisfaction is 62% higher among executives than non-executives, driven by higher scores for work-life balance (+78%), sense of belonging (+52%), flexibility (+51%), and work-related stress and anxiety (+114%).
In addition to being a significant contributor to turnover, employee dissatisfaction can be contagious: unhappy individuals often persuade other employees to quit. According to a 2020 survey by Limeade, more than a third of employees that they’ve been encouraged to quit their job by a coworker.
How company culture and employee engagement impact retention
In its 2020 meta-analysis report, Gallup found that teams with low engagement levels see employee turnover rates 18%–43% higher than teams with high engagement levels.
Gallup also found that luring employees away from an engaging manager requires at least a 20% pay raise, whereas poaching disengaged workers is far easier.
Other research by Gallup discovered that 52% of employees who left an organization voluntarily said that their manager or company could have done something to change their mind about leaving.
However, 51% of exiting employees (51%) reported that in the three months leading up to their departure, neither their manager nor other leadership discussed their job satisfaction or future with the company with them.
Creating an inclusive work environment is crucial to attracting and retaining talent. Glassdoor’s 2020 Diversity Hiring Survey found that for 67% of job seekers, inclusion and diversity are important considerations when deciding where to work.
Alight’s 2021 Employee Wellbeing Mindset Study surveyed 2,501 employees working at companies with more than 1,000 U.S.–based employees about the employee experience and individuals’ wellbeing priorities.
Top themes included financial wellbeing, personal health and stress management, work-life balance, and career growth.
Based on these findings, as an employer it’s worth investing in your employees’ wellbeing. To help, check out our guide to offering personalized employee wellness programs.
Onboarding and employee retention statistics
According to Work Institute’s 2020 Retention Report, around 40% of employee turnover occurs within the employee’s first year with the organization.
A number of studies have established a strong correlation between onboarding experience and employee retention:
A 2013 Aberdeen Group survey found that organizations with engaging onboarding processes retained 91% of their new hires through their first year.
Similarly, a 2015 Brandon Hall Group study commissioned by Glassdoor found that a good employee onboarding program can improve retention by as much as 82%.
While this research is by now outdated and it has proven difficult to track down more recent studies, it seems likely that this correlation holds true now more than ever, given how much employee expectations have risen and how competitive the talent marketplace is.
Failing to make a good first impression and engage team members from the outset is likely to be seen as a red flag by high-performing new hires—the same employees who are likely to have other offers lined up.
How To Address Employee Turnover Using Data Analysis
One study found that 75% of turnover is for preventable reasons. Organizations can make changes that improve retention by addressing issues that employees care about and fine-tuning the employee experience.
First, you need to quantify their employee retention and turnover rates (see below)
Next, you can use the above statistics in conjunction with your own employee’s input regarding factors that might be driving attrition, such as low employee satisfaction and engagement levels, to get to the root causes.
From there, they can propose changes that address the specific issues their employees face, whether it’s introducing remote work or flexible hours, revisiting employee benefits packages, working to improve employee engagement, or implementing an employee recognition program that rewards good work.
Setting benchmarks and measuring specific metrics using pulse surveys will allow organizations to track the success of their engagement and retention programs.
An organization’s employee retention rate expresses how many of its employees remain with the organization (typically year-on-year) as a percentage.
To find your company’s employee retention rate, use the following simple formula:
Divide the number of employees employed at the end of the measurement period by the number of employees at the start of the measurement period and multiply this by 100.
In 2021, Company X started the year with 12 employees. However, by the end of the year, only 8 of these employees remain.
RR (retention rate) = 8/12 x 100
Thus Company X has a 67% retention rate
Since only individuals who were employed at the start and end of the measured period are included in the retention rate calculation, and retention rate is typically calculated on an annual basis, it’s useful to also calculate the turnover rate—the percentage of employees that quit during that period—to get an accurate view.
What is turnover rate?
To find your company’s employee turnover rate, simply divide the number of (voluntary) separations during the measurement period by the average number of individuals employed during the same period and multiply this by 100.
While 4 out of 12 employees left Company X in 2021, it also hired 2 new people. However, before the end of the year, both of these new employees had quit and been replaced again.
TR (turnover rate) = 6/9.8 x 100
Thus Company X has a 61.2% turnover rate
It’s important to note that your retention rate and turnover rate won’t necessarily tell the same story, as demonstrated in the examples above.
This could be for a variety of reasons. For instance, you may find that your tenured employees are more likely to stay put than new hires. This could in turn stem from various causes ranging from shoddy onboarding to company culture mismatches.
While coming up with theories as to why employees are leaving is a starting point, the more data you can collect the more accurately you’ll be able to implement positive changes that have a measurable impact on employee retention.
Did You Find This Information Useful?
We hope you found these statistics insightful and that your employee retention initiatives will benefit from this information.
What do you think of these statistics? Tag us on Twitter or LinkedIn – we’d love to continue the conversation.