Employee turnover is a substantial blow to any business.
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Regardless of the stage of your organization, retaining talent has become an increasingly critical objective in 2023.
High employee turnover rates can harm a company's growth, productivity, and bottom line. To help reduce employee turnover--or merely to understand it-- it is important to look at the data. Employee turnover statistics help us understand its causes, costs, and impact on businesses-- and the economy at large.
Think the impact of an employee leaving is merely the cost of a job posting? Think again. Employees leaving means costs of replacement and training and hard-to-measure effects on the remaining employees' morale and productivity. If your company suffers from high employee turnover you are at a disadvantage, if you excel at retention-- the benefits go beyond what can easily be quantified.
But in this article, we are looking to quantify, through employee turnover statistics, the nature of staff churn. By examining employee turnover statistics overall and by specific industries and companies, we shed light on the factors driving employee departures and how they impact businesses—regardless of size.
General Employee Turnover Statistics
1. The Average U.S. Turnover Rate is Nearly 50%
- On average, a U.S. company will experience a total separation rate of
47%
in its workforce every year for turnover— voluntary and involuntary.
2. Over 45 Million U.S. Workers Quit in 2021 (and More Did in 2022)
- 47.4 million US workers quit in 2021, and over
50 million people quit
in 2022.
3. 70 Percent of All U.S. Employee Turnover is Voluntary
- In 2022, quitting accounted for a staggering
70%
of all job separations, marking the country’s highest recorded level ever.
4. More Than 4 Million U.S. Employees Leave Their Job Each Month
5. More Than 35% of U.S. Employees Who Quit Didn’t Have Another Job Lined Up
- Jobseekers took more risks in 2021, with
36%of employees quitting
without securing a new job.
6. The Median Number of Time at a Company is Less than 5 Years
7. Burnt Out Employees Are 2x More Likely to Convince Co-Workers to Quit, Too
- Workers who are fed up with working conditions can have cascading effects. Employees are
two times more likely
to convince a co-worker to quit.
Employee Turnover Cost Statistics
8. Replacing an Employee Can Cost up to 4x Their Annual Salary
- The costs of replacing an individual worker can range from
half to four times
the employee’s annual salary. That means, if you’re hiring for a job that pays $60,000, you could be spending upwards of $180,000 to fill that role.
9. It Takes up to 2 Years for an Employee to Be Fully Productive in a Role
- On average, new employees typically require
one to two years
to reach full productivity, leading to potential delays in comparison to previous employees. Losing top performers due to voluntary turnover can have long-lasting impacts on a company's bottom line.
10. Turnover Rates Can Cost a Company Upwards of $2.5 Million Annually
Employee Turnover Rates per Industry
Employee turnover varies per industry. Since 2021, while the overall rate has hovered around 47%, here’s a more specific breakdown per sector (in the U.S.):
11. Average turnover rate: 47% (2022)
- Construction: 53%
- Manufacturing: 39%
- Trade, Transportation, and Utilities: 54%
- Information: 37%
- Financial activities: 29%
- Professional and Business services: 63%
- Education and Health services: 38%
- Leisure and Hospitality: 82%
- Government: 20%
12. Average turnover rate: 47% (2021)
- Construction: 57%
- Manufacturing: 40%
- Trade, Transportation, and Utilities: 55%
- Information: 39%
- Financial activities: 29%
- Professional and Business services: 64%
- Education and Health services: 37%
- Leisure and Hospitality: 85%
- Government: 18%
13. Similarly, the following industries have the highest percentage of hiring difficulty:
- Transportation Equipment: 75%
- Health Care Services: 66.3%
- Logistics: 62.2%
- Other Non-Manufacturing: 60.9%
- Other Manufacturing: 60.6%
- Insurance/Reinsurance: 58.0%
- Services (Non-Financial): 57.8%
- High Tech: 56.8%
- Mining & Metals: 53.3%
14. The Fast Food Industry Has an Astoundingly High Turnover Rate
- Fast food employee turnover statistics are eye-popping. The industry has a staggering 147% turnover rate.
15. Retail Employee Turnover in the U.S. is over 50%
- Retail employee turnover statistics are among the highest in the United States. According to a 2023
BLS report
, the average retail employee turnover rate in the US is roughly 60%.
Turnover Statistics From Major Companies
16. Amazon’s Employee Turnover Costs the Company $8 Billion
- The giant online retailer has an annual employer turnover rate of 150%, double the industry average. According to
leaked documents
, employee turnover costs the company and its shareholders $8 billion per year.
17. Meta Experiences an Annual Turnover Rate of About 15%
- Meta, the parent company of Facebook, WhatsApp, Instagram, and Threads has an annual
turnover rate
of approximately 15%.
- In November 2022, the company reduced its workforce by 13%, cutting 11,000 jobs and enacted a hiring freeze for the first quarter of 2023.
18. The Average Employee Tenure at Apple is Less Than 2 Years
- Apple, one of the largest companies in the world, struggles to retain its employees. The tech company’s
average employee tenure
is less than two years: only 20 months (1.7 years).
19. United Airlines Has an Employee Turnover Rate of Less Than 10%
- United Airlines says its team members stay on board (pun intended) to “build careers” and has an impressive 7% turnover rate. The
airline says
it remains a “destination for lifelong careers, with an average tenure of 16 years of service for United employees.”
A Company Culture's Impact on Turnover Statistics
20. Over 30% of New Hires Quit Within the First 90 Days
- A significant portion of new hires (
34%
) left their job in 2022 within the first 90 days, citing company culture as a key reason for their departure.
21. Toxic Workplace Culture 10x More Likely To Drive Employees Away Compared to Salary
- Toxic company culture is a more significant predictor of turnover than compensation. It's a whopping
10.4 times more
powerful in predicting attrition rates within an industry, compared to salary.
22. 3 in 4 Job Seekers Consider Company Culture Before Applying to Jobs
23. Over Half of Job Seekers Value Company Culture Over Salary
Management, Leadership, and Turnover Statistics
24. Nearly 80% of Employees Believe Strong Leadership Decreases Turnover
- Strong leaders who understand their employees and promote flexibility are more likely to retain talent. In fact,
79% of employees factor
“empathetic leadership into decisions to stay at a company.”
25. Regular Employee Feedback Results in 14.9% Lower Turnover
- Companies that conduct regular
employee feedback
sessions experience a 14.9% reduction
in turnover rates.
26. More Than 80% of Employees Would Quit Due to a Bad Manager
- Bad management can prompt employees to consider quitting. In a
survey
, 82 percent of full-time U.S. employees said they would leave their jobs due to poor management.
27. More Than Half of Quitting Employees Say Management Could Have Prevented Their Departure
- Over half of voluntarily exiting employees (
52%
) believe that their manager or organization could have taken steps to prevent their departure.
Employee Recognition: Your Not-so-Secret Weapon in the War Against Employee Turnover
Employee turnover statistics provide a comprehensive overview of the dynamics at play within today's workforce. Turnover is not merely a statistic; it represents the ebb and flow of talent within organizations. Each data point serves as a valuable piece of the puzzle, revealing the reasons behind employee departures and offering insights into the strategies needed to reduce turnover and enhance retention.
One key strategy to implement to reduce employee turnover? Introducing a great employee recognition program. Recognizing employees increases their sense of value and feeling that they are being appreciated, increasing their job satisfaction and commitment.
When individuals are recognized for their contributions and achievements, they are more likely to feel engaged and motivated in their roles, leading to higher retention rates.
Employee recognition also fosters a positive workplace culture, improving overall morale and team cohesion. As a result, employees are less inclined to leave their jobs in search of better opportunities, ultimately reducing turnover and contributing to a more stable and productive workforce, and in turn, reducing the chance that your company contributes to the negative turnover statistics of the future.
Original Post by: jspuhler in Recruiting Software Blog, November 4, 2015
Employee turnover is expensive. Job churn boosts hiring, onboarding, training, and engagement costs. Depending on the level and skill of an employee at separation, you could pay from half to twice the cost of their annual salary to land a good replacement candidate.
In August, the Bureau of Labor Statistics (BLS) reports there were 2.7 million quits in August of this year. Quits are voluntary separations undertaken by an employee. The number of quits remained steady in the last few months, with a slight uptick over a 12-month span. Employees quit for a lot of reasons, oftentimes because they find more engaging, appropriate, or higher-paying work.
After an employee quits, it is easy to focus on dollars lost, and the restart of the hiring cycle. Instead, step back and consider the composition of the workforce you are trying to build.
What you lose by job churn
If you are a start-up, you may run on fewer than 15 employees. It is easy to see when a particular hire is creating more friction than value. Larger, or more established, companies are likely to carry a poor-performing hire for a long time—particularly if his or her performance is good, even if that employee’s fit with your company culture is bad.
A couple of bad actors, especially in management positions, can directly impact job satisfaction for high performing, good-fit talent. When a valued employee quits, the results reverberate throughout the workforce in ways that include:
- Loss of information: When talent walks out the door, they take more than specific job knowledge. They take the reciprocity acquired while they were within your workforce—relationships, efficiencies, and institutional knowledge. These assets are irreplaceable and must be redeveloped by the new hire, over time and with job-specific training.
- Morale: When a well-regarded employee leaves, it impacts those on their team and in their office. It is human nature for remaining employees to wonder about the workplace, and whether they should also be looking elsewhere. For some, it may be a reminder of their own dissatisfaction. Depending on a decision to replace the employee, remaining workers may be pressed to take on more. Team members overwhelmed by extra responsibility become less engaged—eventually taking their own walk out the door.
- Overall productivity: When a well-trained, well-liked employee quits, regardless of their position, it is a loss to the overall productivity of a company. If they were on the customer front line, the churn is more visible, and disruptive.
- Hiring cycle: You know the costs of the recruiting and onboarding journey. If a good employee quits, it is a loss across the board.
Change happens. But when it happens too much, it is time to take a look at your hiring and retention processes. Notes the Wall Street Journal, “hiring the right people from the start, most experts agree, is the single best way to reduce employee turnover.”
Create an adaptive workforce
The loss of any employee offers opportunity. For poor performers, there is a good chance to correct the situation with a new hire. When skilled talent quits, it requires a look at engagement.
There has never been a better time to take advantage of HR tech tools. Reduce time spent on repetitive and detail tasks by using high quality staffing software. Use your software to fine tune choices, maintain records, and keep recruiting efforts organized.
Spend more time with managers, and administrators, to create a holistic plan for building a workforce that meets your present and developing needs. Recruiting is never finished—it evolves into engagement of the talent you put in place. As we discussed in an earlier article, key drivers of engagement include:
- Company concern for careers: Provide training, career planning, and skills refresher courses at all levels of your organization. In addition to growing a skilled workforce informed about compliance and regulatory issues, you create a culture that shows value for the individual journey. Individual engagement is essential in the current job market.
- Competitive pay: A competitive salary, benefits, and bonus package builds engagement. Everyone takes note of fair, appropriate compensation packages that include health, and life insurance, as well as opportunities for retirement contributions. For some, lack of job flexibility, like telecommuting, can be a deal breaker.
- Company culture: Create, and maintain, a company culture that invites employees to care about the bigger picture. When your employees feel your company is a great place to work—they are less likely to look elsewhere.
Employee turnover is not always a bad thing. Whether it is a loss—or gain—keep your hiring practices sharp as you work to build a relevant, adaptive workforce for your company.
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