150 Employee Turnover Statistics: Causes, Cost, and Prevention Data

150 Employee Turnover Statistics: Causes, Cost, and Prevention Data

150 Employee Turnover Statistics: Causes, Cost, and Prevention Data
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Employee turnover refers to the number or percentage of workers who leave an organization and are replaced by new employees during a defined period. It is a critical metric for human resources and management professionals, as high turnover can be costly and can indicate various underlying organizational issues.

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  • By the end of 2023, over one-third of employees are expected to leave their jobs voluntarily. 3
  • Among executives who depart from their company, 70% do so voluntarily, while 30% experience involuntary departures. 3
  • A significant majority (77%) of employees aged 65 and older retire every month. 15
  • Employee turnover has resulted in a substantial economic burden exceeding $630 billion for various industries in the United States. 3
  • Financial reasons are the primary factor for job resignation, with 66% of individuals citing it as their main motive for quitting. 9
  • State of Employee Turnover Statistics

    Employee turnover has been substantial in recent years. Recent research has unveiled that the rate at which employees leave their jobs, whether by choice or due to circumstances, continues to be rapid, particularly in the United States.

    • The annual employee turnover rate in the United States is about 6,058.1
    • Research has shown a slightly higher average unemployment rate at 3.9%.2
    • By the end of 2023, over one-third of employees are expected to leave their jobs voluntarily.3
    • The overall number of employee departures increased to 5.5 million. This includes resignations, layoffs, retirements, transfers, and dismissals.4
    • Every year, 18.9 million Americans exit the labor market or switch professions.4
    • The US experiences a quit rate of 2.3% and a discharge rate of 1.2%. This means 3.4 million resignations and 1.8 million discharges.4
    • The annual voluntary employee turnover rate in the United States stands at 13%, while the involuntary turnover rate is 6%.1
    • Over the past four years, voluntary employee turnover has increased by two million annually.3
    • Approximately 3% of top-performing employees in organizations decide to resign each year.1
    • A substantial figure of 41 million employees opted to leave their jobs voluntarily.1
    • About 2.86 million Americans chose to resign from their positions.5
    • A significant 4.4 million US workers decided to quit their jobs, comprising 3% of the US workforce at that time.3
    In the shifting landscape of employment in the United States, it's observed that an 18% annual turnover rate is experienced, with some studies suggesting even a slightly elevated rate of 20%.1 The beginning of 2023 marked a notable peak, where 3.5 million employees chose to part ways voluntarily.3

    Combining resignations with other departures shows an upward surge to 5.5 million departures.4 To the discerning business, these figures underscore a pivotal trend: the motivation and reasons behind the mobility of the workforce. With such dynamic shifts, understanding employee needs and preferences becomes paramount in designing retention strategies and effective campaigns.
    • In the production and maintenance fields, 62% of workers left voluntarily.6
    • A total of 42 million US employees voluntarily resigned, representing 27 out of every 100 employees.3
    • Among those who left their jobs, three out of four employees claim they did so voluntarily.3
    • Of the employees who chose to resign, 38% did so intending to retire.3
    • Among executives who depart from their company, 70% do so voluntarily, while 30% experience involuntary departures.3
    • For managers who decide to resign, 68% do so voluntarily, and 32% experience involuntary departures. A similar breakdown can be observed among office employees who leave their positions.4
    • Within the first year of employment, 37.9% of new hires choose to resign, and two out of three often do so within the initial six months.1
    • Regarding occupations with the highest projected separation rates, some of the top ones include lobby attendants and ushers (24.3%), recreational protective service workers (24.1%), amusement and recreation attendants (23%), coatroom attendants (23%), and costume attendants (23%).1
    • Current data reveals that production, maintenance, service, and trades employees constitute 28.4% of turnovers, followed by office and technical employees at 19.5%, managerial and professional employees at 14.3%, and executives at 7.7%.1
    • Analyzing employee turnover rates by industry in 2022, we find that the industries with the highest churn rates are retail and ecommerce at 30.7%, gaming, entertainment, and media at 22.6%, technology at 21.3%, and life science and medical devices at 20.6%.1
    • The turnover rate in the retail industry is 1.5 times higher than the general industry's.11
    • The typical duration of employment for the average employee is eight years.6
    • The median tenure for wage and salary workers is 4.1 years.5
    • On average, male employees have a tenure of 4.3 years, while female workers have a slightly shorter tenure of 3.9 years.5
    The Average Turnover Rate By Industry As Of 2023
    The Average Turnover Rate By Industry As Of 2023

    • Approximately 29% of male wage and salary workers have been with their current employer for over 10 years; a similar figure of 27% applies to female workers.5
    • Employees aged 55 to 64 have a median tenure of 9.9 years, which is three times longer than the 2.8 years of those in the 25 to 34 age group.5
    • Workers in public agencies have a median tenure of 6.5 years, nearly double that of private sector employees, who have a median tenure of 3.7 years.5
    • Among public sector workers, federal employees have the highest median tenure at 8.2 years, followed by local government employees at 6.6 years and state employees at 5.6 years.5
    • Employees in management and legal occupations have the longest median tenure at 5.8 years, followed by those in architecture and engineering at 5.1 years, and the educational and training sector at 5 years.5
    • On the other hand, employees in service occupations have the shortest median tenure at 2.9 years.5

    Numerous elements influence the typical duration of a worker's employment. These include gender, age, job role, and profession. By comprehending the impact of these variables, employers can gain insights into the anticipated length of their employees' tenure.

    The Risk of Employee Turnover Statistics

    The prevalence of voluntary turnover compared to other forms of employee separation highlights the importance of understanding employees' sentiments long before they resign. Indeed, the decision to leave a company is rarely made impulsively. Instead, it is a matter that employees ponder for days, weeks, or even months.

    Data indicates that some workers actively seek new job opportunities or are open to resigning if the right opportunity arises. Frequently, the decision to depart is also influenced by the accumulation of workplace issues they have encountered during their tenure.

    • Only 33% of employees are willing to remain in their current positions.9
    • A significant 64% of workers contemplate leaving their jobs, with 13% constantly thinking about it.10
    • At any given time, 51% of employees actively seek new job opportunities.11
    • In their professional journeys, 40% of workers have made impulsive decisions to resign at least once.10
    • A substantial 73% of workers are willing to investigate new career paths, and 33.1% are actively searching for a new employer.5
    • Surprisingly, more than half (63%) of employees who have spent a decade with their current employer are open to fresh opportunities.5
    • A significant majority (77%) of employees aged 65 and older retire every month.15
    • A growing number of employees, 52%, plan to seek new job opportunities in 2023, an increase from 37% in the previous year.9
    A noteworthy undercurrent of restlessness is detected within the workforce; only a third of employees are content in their current roles. With 64% of workers teetering on the edge of resignation and over half already seeking fresh horizons, it paints a vivid picture of an unsettled workforce landscape.11

    Engagingly, even those with a decade's commitment to their employers haven't cemented their loyalties, indicating an openness to change. This speaks volumes: Employee value propositions and brand narratives must be innovatively reframed, catering to an increasingly fluid workforce.
    • Additionally, 17% of employees are uncertain about leaving but remain receptive to exploring new prospects.9
    • Nearly half of the workforce won't consider resigning until they secure a new job, while 22% believe they can quickly find an alternative position if they quit beforehand.10
    • Furthermore, 36% are prepared to leave simply because they are dissatisfied with their current role.10
    • More than half of the employees (52%) are ready to resign from their current job if another employer offers the "right" benefits.12
    • Notably, a significant portion of younger employees, particularly 94% of Gen Zers and 88% of Millennials, have initiated job searches primarily as a result of experiencing burnout.13
    • This percentage is somewhat lower for Gen Xers (82%) and Baby Boomers (37%).13

    Resignation Rate Of Employees Based On The Number Of Years Of Employment

    Number Of Years Percentage (%)
    1 Year Or Less 45%
    1 - 3 Years 20%
    3+ Years 8%

    • In a related context, 58% of Gen Zers and 55% of Millennials have transitioned to new roles due to burnout.13
    • Almost half (47%) of millennials anticipate leaving their current company in the coming years, a sentiment shared by an equivalent proportion of Gen Zers in the US workforce.15
    • Employees who are dealing with burnout are twice as likely to encourage their colleagues to submit their resignations simultaneously.13
    • Furthermore, 38% of employees acknowledge being tempted by a coworker who advocated for a collective departure from their current positions.13
    • Across various industries, the percentage of individuals actively seeking employment is at its peak (ranging from 25% to 36%) in telecommunications, technology, oil & gas, and financial services.16
    • In contrast, it is lower in education, healthcare, real estate, and government (ranging from 14% to 15%).16

    Generational disparities often shape perceptions of job dissatisfaction and the subsequent choice to resign. An analysis of gathered data on employee turnover indicates that younger workers tend to depart from their jobs more frequently than their older counterparts, with burnout frequently cited as a prominent factor.

    Cost of Employee Turnover Statistics

    Frequent employee turnover can significantly impact a company's financial resources. Each time a new employee is hired, the organization incurs both time and financial expenses for training. Furthermore, there are costs associated with providing the necessary equipment for these newcomers, including job-specific software and devices and applications like talent management systems to monitor their work.

    As a result, when an employee decides to leave a company, especially early in their tenure, it results in a financial setback for the organization. Beyond the direct expenses related to employee replacement, experts anticipate a potential shortage of talent in the coming years. This could challenge companies to secure skilled labor while adhering to their budgetary constraints.

    • Employee turnover has resulted in a substantial economic burden exceeding $630 billion for various industries in the United States.3
    • Each instance of employee departure can lead to expenses equivalent to one-third of the employee's annual earnings. Approximately 67% of these costs typically arise from indirect or "soft" factors such as reduced productivity, while the remaining 33% is attributed to direct or "hard" costs like recruitment and temporary staffing.1
    • Recent research supports these findings, indicating that the costs associated with replacing an employee amount to 33% of the employee's annual income.5
    • However, a study conducted in Canada suggests that the cost of substituting an employee can range from 75% to 200% of the employee's yearly salary.14
    • As a result, 27% of decision-makers responsible for hiring in Canada identify employee turnover as a significant challenge.7
    • Moreover, by 2030, expected talent shortages are likely to have a severe impact on businesses.16
    • The financial consequences of a talent shortage may vary, but projections suggest potential costs of $435.7 billion for the United States, $90 billion for the United Kingdom, and $147.1 billion for China.16
    • For companies dealing with prolonged job vacancies, a substantial 81% have reported adverse effects on their operations.12
    Within the U.S. industries, the ripple effect of employee turnover is palpable, amassing an economic weight surpassing $630 billion.3 Beyond the immediate tangible costs, nearly two-thirds of the ensuing expenses are intangible, rooted in dwindling productivity.

    In contrast, Canadian findings illuminate even steeper potential costs, highlighting a pressing concern shared by hiring decision-makers. By 2030, this landscape is set to intensify, with impending talent shortages poised to reshape businesses globally. Given the stark financial implications at stake, crafting a compelling employer brand and retention narrative is more crucial than ever.
    • These effects include an inability to complete work (28%), reduced employee engagement or motivation (27%), decreased staff morale (25%), revenue losses (25%), and delays in meeting delivery deadlines (22%).7
    • Reducing employee turnover is crucial for several reasons. Firstly, the cost of replacing an employee is substantial. Replacing an individual employee can result in expenses ranging from half to twice the employee's salary. This means that losing an employee with an annual salary of $80,000 can cost the organization as much as $160,000.7
    • Even with relatively low turnover rates, the financial impact on the entire company can be substantial. For instance, in a 100-person company with an average salary of $50,000, turnover and replacement costs could reach as high as $2.6 million annually.7
    Industries With Above-Average Turnover Rates In 2023

    • Turnover of high-performing employees is costly, and turnover resulting from hiring the wrong person initially is also expensive. Nearly three-quarters of companies acknowledge hiring the wrong person for a role, and each such bad hire costs companies an average of $14,900. A bad hire can negatively affect productivity, compromise work quality, and lead to rushed recruitment processes.8
    • Additionally, 66% of workers have accepted a job only to realize it was a poor fit.8
    • Half of these individuals resign within six months or less, underscoring the importance of making the right hiring decisions to prevent costly turnover.8
    • Onboarding a new hire can cost up to 25% of the annual salary.8
    • Training and development costs can vary, but on average, organizations spend about 1,000 dollars and just over 25 hours to train a new employee.8
    • The cost can exceed 213% of the annual salary for higher-level executives or specialized positions.8

    The costs associated with replacing an employee, which can be as high as two times their annual salary, highlight the importance of implementing strategies to reduce turnover and retain talent. Additionally, the impact of turnover extends beyond financial considerations, affecting productivity, work quality, and overall morale within the workplace.

    Reasons For Employee Turnover Statistics

    What are the exact reasons behind employee attrition? Data indicates that the causes vary from a mismatch in corporate culture to the pursuit of higher compensation. These explanations have remained relatively consistent in recent years, with both employers and employees acknowledging them.

    However, it is essential to note a slight discrepancy in how employers and employees perceive the factors that could lead an employee to resign. Employers view new job opportunities as more enticing reasons for employee turnover than job dissatisfaction, but the workforce tends to disagree. This suggests that employers hold the key to effectively retaining their employees.

    • The primary reason American employees left their companies was to seek better compensation (25%).5
    • This was followed by dissatisfaction with their current roles (16%) and the desire to align more closely with their employer's values (14%).5
    • Additional factors included relocation, securing full-time employment, and the need for greater schedule flexibility.5
    • More recently, research from the Work Institute highlighted that career advancement (20%), work-life balance (12%), managerial behavior (12%), job nature (10%), and personal well-being (9%) were the key factors prompting employees to resign.3
    • Another study conducted in the same year echoed these findings. The leading reasons for employee departures were identified as receiving a more attractive offer from a different organization (32%), limited growth opportunities in their current company (21%), incompatible work hours (20%), and cultural misalignment with the company (17%).9
    • Financial reasons are the primary factor for job resignation, with 66% of individuals citing it as their main motive for quitting.9
    • Subsequent reasons included the pursuit of work-life balance (25%), feeling unrecognized at work (16%), and the desire for a more pleasant corporate culture (8%).9
    • However, the employers speculated that employees left due to inadequate compensation, unmet personal aspirations, excessive workloads, limited career prospects, and a lack of recognition.15
    In seeking better compensation, 25% of American employees found reasons to leave their companies. With 16% feeling out of place in their roles, there was a pressing need to resonate with company values, accounting for 14% of departures. Concurrently, the allure of career advancement and work-life harmony became evident, contributing to 20% and 12%, respectively.

    To highlight, while employers perceived financial incentives as a primary driver, it's evident that a harmonious work culture and genuine recognition are equally significant. Embracing these insights can shape more fulfilling workplace environments, bridging the gap between employee aspirations and organizational offerings.
    • Interestingly, around 47% of HR experts believed that the allure of new job opportunities outweighed job dissatisfaction as the primary catalyst for employee departures. In contrast, over a third of the workforce reported job dissatisfaction as the stronger motivator.15
    • A significant 21% of employees cite limited opportunities for career advancement as their reason for resigning from their jobs.1
    • The absence of opportunities for skill development and career growth drives one-third of employees to leave their positions, making it a primary cause of employee turnover.16
    • Only one in four employees feel that their employers actively support their career growth, while a concerning 77% believe they are primarily responsible for their own professional development.16
    • Among employees planning to change jobs, 42% express the belief that their current employers are not fully utilizing their skills and abilities.14
    • Career development emerges as the most frequently cited reason for employees who leave their jobs within the first 90 days.3

    The Top Reasons For Employee Turnover

    Description Percentage (%)
    Career Development 22%
    Growth and Development 21%
    Schooling 18%
    Work-Life Balance 12%
    Management Behavior 11%

    • Compared to men, women are 28.5% less likely to leave their jobs due to career advancement and compensation issues. However, women are more inclined to resign if managerial behavior, work-life balance, and well-being concerns arise.3
    • A significant majority of employees (60%) indicate that subpar working conditions, a lack of supportive leadership, and uninspiring tasks can hasten their decision to resign.10
    • An alarming three-quarters of the workforce admits to experiencing burnout.13
    • Among those who have encountered burnout, 44% consistently resent their employers.13
    • Feeling unappreciated and unsupported by their employer is a primary reason for job termination, as reported by one in three employees.13
    • Furthermore, one in four employees has left their jobs due to a perceived lack of respect from company leaders, while one in five resigned because they felt the company did not adequately support their well-being.13

    Burnout is a prevalent issue affecting a significant portion of the workforce, leading to resentment and potential turnover. This highlights the importance of promoting a healthy work environment, supporting employee well-being, and addressing burnout-related concerns.

    Employee Turnover Prevention Statistics

    While a certain level of employee turnover is expected, organizations can implement measures to keep it manageable. As discussed earlier, many of the factors that frequently lead employees to resign can be addressed through proactive actions by employers, especially if identified early.

    Consequently, companies emphasize fortifying their employee retention strategies and investing in HR technology to boost employee satisfaction.

    • Remarkably, a substantial 78% of the common factors that lead employees to leave their jobs could be addressed by their employers, effectively preventing attrition.3
    • An astounding three-quarters of employee resignations had the potential to be avoided.3
    • When a workforce is highly engaged, a company's turnover rate can be reduced by anywhere from 25% to 59%.11
    • Despite 72% of HR professionals acknowledging that managing employee retention is a moderate to significant challenge, only 24% of them reported consistently seeking feedback from their staff.11
    • As a result, a significant majority of companies (87%) are now prioritizing enhancing their employee retention efforts.11
    • The need to attract and retain talent is the driving force behind 58% of decisions related to HR technology.14
    • In the United States, employees highlight that the most significant contributors to their job satisfaction include factors such as their daily commute (60%), workplace colleagues (60%), their personal interest in the job (59.9%), the physical workspace (59.3%), and job stability (59.2%).14
    • A notable percentage of workers (61%) are willing to negotiate their base pay in exchange for additional vacation days.15
    Driven by such revelations, 87% of companies are redirecting their focus to retention efforts. As the intricacies of job satisfaction emerge, from daily commutes to workspace aesthetics, it becomes evident that holistic approaches and adaptive HR technologies are vital in molding content-loyal workforces.
    • The primary reasons for employees to remain in their current jobs are work-life balance (23%), recognition (21%), compensation (19%), and maintaining a positive professional relationship with their manager (19%).9
    • More than half of employees (52%) believe that a salary increase could make them tolerate the unfavorable aspects of their current job.15
    • Benefits are considered a crucial component of compensation by 77% of employees, with 73% viewing it as a key factor in their decision to stay with their current employer.12
    • Trust in corporate leadership is why 62% of employees choose to remain with their current employers.14
    • For 44% of employees, additional financial incentives could persuade them to stay with their current employer.14
    • This is followed by the prospect of promotion (42%), increased compensation (41%), flexible work arrangements (26%), and recognition from supervisors (25%).14
    • In light of COVID-19, employees express a desire for specific benefits such as enhanced paid sick leave for those affected by the coronavirus (48%), the waiver of coronavirus testing fees (43%), and access to healthcare professionals around the clock (24%).17
    • Most employees (86%) consider health insurance a "must-have."17
    • Additionally, they place importance on dental coverage (69%), vision coverage (41%), and disability coverage (41%).17
    • Employees also emphasize the significance of coverage for critical illness (32%) and cancer (23%).17
    • A significant 64% of employees express their intention to leave their jobs, primarily due to their perception of not being heard or listened to.9
    • As a result, most companies (61.6%) are implementing surveys to assess employee sentiment, but a notable 38.4% have not yet adopted this approach.5
    • Regarding the specific surveys in use, a small percentage (15.8%) focus on measuring employee engagement, while the larger portion (52.3%) prioritize gauging employee satisfaction or happiness.7
    The Top Reasons Organizations Struggle To Hire

    • Common topics that employers seek feedback on include enhancing the overall employee experience (60%), improving company culture during the pandemic (54%), and understanding employee preferences regarding remote or hybrid work arrangements post-pandemic (52%).9
    • It is concerning that 27% of employees feel that their superiors do not act upon their feedback, and this percentage rises to 38% for employees with over a decade of tenure in their company.9
    • Only 35.3% of employees report having monthly meetings with their managers, and alarmingly, 12.2% state that they never have one-on-one meetings with their managers.16
    • While a substantial 60% of employees indicate that their company has actively sought their feedback, nearly all of them report that the organization did not take action on their concerns.9
    • In fact, only a mere 16% of employees believe that their company consistently acts on their feedback.9
    • Lastly, a mere 11% of HR teams are utilizing stay bonuses as a method for employee retention.9

    The topics on which employers seek feedback, including enhancing the overall employee experience, improving company culture during the pandemic, and understanding preferences for remote or hybrid work arrangements, highlight the evolving needs and expectations of the workforce.

    Frequently Asked Questions

    Q1. What is employee turnover?

    Employee turnover refers to the rate at which employees leave a company and are replaced by new hires. It can be categorized as voluntary (employees leaving of their own accord) or involuntary (employees being terminated or laid off).

    Q2. Why is employee turnover important to businesses?

    Employee turnover can impact a company's financial resources, productivity, and overall work environment. High turnover rates can result in increased recruitment and training costs and lose valuable talent and institutional knowledge.

    Q3. What are the main reasons employees leave their jobs?

    The reasons for employee turnover can vary, but common factors include

    • Seeking better compensation,
    • Limited opportunities for career advancement,
    • Dissatisfaction with job roles or company culture, and
    • Issues related to burnout or work-life balance.

    Q4. How can businesses reduce employee turnover?

    To reduce employee turnover, businesses can,

    • Focus on improving compensation packages,
    • Providing opportunities for career growth and development,
    • Creating a positive work culture, and
    • Addressing burnout-related concerns.

    Regular feedback and communication with employees are also key.

    Q5. What role does employee engagement play in reducing turnover?

    Highly engaged employees are less likely to leave their jobs. Engaging employees involves creating a work environment where they feel valued, motivated, and connected to their work. Companies can use various strategies to enhance employee engagement.

    Final Thoughts

    In this article, we've uncovered essential insights from employee turnover statistics. We've highlighted the powerful impact of workplace culture on employee retention and how negative environments and ineffective leadership can lead to dissatisfaction and, consequently, increased turnover.

    We've also emphasized the importance of financial compensation, work-life balance, and opportunities for career growth in keeping employees engaged and motivated. These lessons are invaluable for any organization seeking to improve employee satisfaction and reduce turnover. Nurturing a positive and fulfilling workplace culture is a worthwhile investment. Stay tuned for more enlightening discussions in the future!

    Sources

    1. Bureau of Labor Statistics
    2. Bureau of Labor Statistics
    3. Work Institute
    4. Bureau of Labor Statistics
    5. Statista
    6. Visier
    7. Principal News
    8. Achievers
    9. Zippia
    10. The Digital Group
    11. Prudential News
    12. Limeade
    13. Deloitte
    14. Monster
    15. Pew Research Center
    16. Business Insider
    17. MetLife
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