40+ Employee Retention Statistics, Trends & Facts Unveiled [2024]

December 8, 2023 0 Comments

Ever wondered how top companies keep their talent?

Want to crack the code to boost morale and keep your A-team?

It is worth noting that 50% of new hires back out even before starting their new job.

If companies focus on employee upskilling and career development, they can retain 9x employees longer. 

Hiring rates are increasing and so are the turnover rates leaving 50% of employers with low retention rates across the world.

Unlock the secrets to workforce stability with the latest employee retention statistics, facts and trends.   

Top Employee Retention Statistics: Editor’s Pick

average retention time is 4.1 years worldwide
  1. Higher retention rates tend to maximize company profits by up to 4 times. [17]
  2. Supportive leaders and an inclusive work environment improve employee retention by 300%. 
  3. 50% of new hires back out even before starting their new job. [6]
  4. Government jobs have always had the highest retention rates. [1]
  5. The entertainment and hospitality industries have the lowest retention rates. [1]
  6. The replacement cost per person amounts from $15k to $240k per person. [20]
  7. 75% of US workers do not want to stay at their jobs for more than five years. [23]
  8. Companies can retain 9x if leaders focus on upskilling. [15]

Employee Retention Rate By Industry

Curious to know which industry has cracked the code to their employee retention and which is still lagging.

It is not shocking to note that Government jobs have always had the highest retention rates. [1]

The next in line is Finance and Insurance, with a 24.6% separation rate. [1]

The entertainment and hospitality industries have the lowest retention rates. [1]

List of Common Retention Rates Based on Industry

IndustryEmployee Separations 
Government 18.6%
Finance and Insurance24.6%
Manufacturing28.6%
Educational Services29.8%
Wholesale Trade29.6%
Arts/Entertainment79.5%
Leisure and Hospitality79.0%
Accommodation and Food Services78.9%
Construction65.0%
Professional and Business Services63.5%

Employee Retention and Turnover Statistics

The average retention time is 4.1 years worldwide. [7]

One out of every two organizations has a turnover rate greater than 15% and 1 in 5 has a rate greater than 30%. [3]

20% of frontline workers are planning to leave their current job within the next three to six months. [5]

50% of new hires back out even before starting their new job. [6]

As remote work improves retention and provides flexibility to employees, companies that offer remote work have 25% lower employee turnover rates than others. [18]

Improving transparency in management results in 30% higher retention rates. [19

The reasons behind 75% of employee turnovers are preventable and under employers’ control. [20]

25% of people belong to the high employee retention risk group. [22]

Cost of Employee Retention Statistics

61% of employers face difficulty in employee retention

With 61% of employers facing difficulty in employee retention, recent data proves that retention saves a bunch of money for companies. [2]

The average cost of employee turnover is 1-2 times the employee’s salary. [2]

Lower retention rates cost an employee $1 trillion a year. [23]

The cost of employee turnover exceeded $700 billion in 2021. [16]

33% of an employee’s yearly salary is equal to the amount required to replace them. [20]

The replacement cost per person amounts from $15k to $240k per person. [20]

Higher retention rates tend to maximize company profits by up to 4 times. [17]

Factors Affecting Employee Retention 

Why do employees leave?

Factors affecting employee retention include lack of proper onboarding, toxic work culture, lack of flexibility, lack of career development plans, and upskilling for employees.

60% of companies admit that they did not set any clear goals for new hires. [21]

Resulting in 32% of employees quitting in the first 45 days. [21]

40% of employees quit because of the poor performance of seniors. [21]

Transparent onboarding improves retention by 23%. [17]

Employees who feel valued for their work are 34% less likely to leave their jobs. [21]

Here are the major reasons behind low retention rates.

  • Changing careers or switching domains is the reason for 22% of employees who quit. [20]
  • Lack of training and resources in the workspace also discourages employees (11%).
  • Work-life imbalance due to inflexibility at work (11%).
  • Work overload and burnout (26%).
  • No career growth, upskilling, and learning hinder the career development of employees and they tend to leave the job.
reasons behind low employee retention

Average Retention Rate of US

75% of US workers do not want to stay at their jobs for more than five years. [23]

Out of 1000 employees surveyed, 31% quit their jobs in less than six months of hiring. [23]

Over half of the enterprises worldwide struggle with personnel retention. [23]

Gen Z and millennials are 53% more likely to leave their jobs in the US. [4]

The US workforce in the technology and hardware industry is 60% more likely to leave their jobs. [4]                                            

Top Employee Retention Strategies

How are employers maintaining their retention rates?

Curious to know their secret tips and tricks?

supportive leader improve employee retention by 300%

Here we have curated a list of top employee retention strategies that leaders in the job market recommend:

Develop a strong onboarding process

82% of employees have improved retention by implementing a good onboarding program. [2]

80% of new hires with bad onboarding, plan to leave especially remote workers. [8]

Build a helpful company culture

Toxic work culture has been the top reason behind employee attrition and is 10 times more important than compensation. [9]

34% of CHROs are working on improving company culture to retain a talented workforce. [10]

Employees should feel included

According to the Diversity Inclusion Report 2022, employees who feel included and their work worthy, are 2.4 less likely to leave. [11]

Organizations with no inclusive environment experience 1.6 times more employee turnover. [12]

Provide flexibility

88% of global leaders strongly recommend flexibility at work to improve retention. [13]

47% of employees are actively seeking a new job because they want more flexibility, especially after experiencing remote work during the pandemic. [6]

Provide employee development opportunities

The best way to improve employee retention is by providing upskilling and learning opportunities. Concern over career growth has always been the top reason for resignations. [14]

Companies can retain 9x if leaders focus on upskilling. [15]

Give and ask for employee feedback

Can regular and constructive feedback make employees stay? Yes!! 

Businesses that ask and appreciate employee feedback, impact retention rates by +326%. [15]

FAQs

What is employee retention?

Employee retention refers to an organization’s ability to keep a talented workforce and their ability to stop employees from leaving. It includes the efforts and initiatives taken by employers, like proper onboarding, inclusive work culture, and others. 

Why is employee retention important?

It is important for an organization to keep employee retention rates high, as employee turnover is costly. It takes 50% of an employee’s salary to hire a new employee. Employee retention helps boost productivity and morale. It reduces overall costs by maintaining a good customer experience.

What are some effective employee retention strategies?

Effective employee retention strategies recommended by leaders include developing a strong onboarding process, building a helpful company culture, and providing flexibility and employee development opportunities. 

The best way to improve employee retention is by providing upskilling and learning opportunities. Concern over career growth has always been the top reason for resignations. 

Conclusion

It is crucial to maintain high retention rates for a company to grow. Good retention rates not only help employers cut down on replacement and hiring costs but also improve productivity and work culture.

Major reasons for low employee retention include changing careers or switching domains. 11% of employees admit that lack of training and work-life imbalance due to inflexibility at work discourages them.

No career growth and upskilling hinder the career development of employees and they tend to leave the job. Employee Retention is highly dependent on the company’s onboarding process and work culture. The best way to improve employee retention is by providing upskilling and learning opportunities to employees.

Sources

  1. U.S. Bureau of Labor Statistics. Annual average job openings rates by industry 
  2. PRNewswire. Integrated Benefits Institute Study 2023
  3. Ajg.com. 2023 US Workforce Trends Report Series: Organizational Wellbeing
  4. Ey. com. Work reimagined survey
  5. Forms.workday.com. Frontline worker research report
  6. Gartner HR Survey, 2023 Retention in past 5 months Bureau of Labor, 2022
  7. TINYPulse. 17 Surprising Statistics about Employee Retention
  8. Paychex.com. The Effect of Poor Onboarding on New Hires, Paychex, 2023
  9. Sloanreview. Toxic Culture Is Driving the Great Resignation, MIT Sloan Management Review 2022
  10. PRNewswire. The Conference Board 2023
  11. Bcg.com. Diversity, Inclusion, and Belonging in the Workplace, BCG 2022
  12. Hr McLean. Demystify the Design Thinking Mindset, McLean & Company, 2022
  13. US Targus. 2023 Global Workplace Study, Targus
  14. Centrical. 2023 Global Operation Leaders Insight Survey, Centrical
  15. Octanner. 2024 Global Culture Survey
  16. Work Institute.  2022 Retention Report
  17. Well. ee. How to Improve Employee Retention With Higher Employee Engagement
  18. Owl Labs. State of remote work
  19. Hubspot Pulse Employee Retention Report. The real story behind your employees leaving
  20. HR Dive. Turnover costs employer $15,000 per worker
  21. HBR. To retain new hires, spend more time onboarding
  22. Dailypay. Employee retention rate 
  23. Gallup. Turning around your turnover problem

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