Employee retention statistics are here to show what US companies are doing right and what new practices they need to introduce or change in order to improve their business.
Every business should aim to replace just those employees who are underperforming. However, retaining high performing workers is an extremely difficult process. They are aware of their impact on the business, and they want to be recognized for it. Still, thousands of businesses around the world fail to do so, losing what is in effect their most valuable asset.
10 Key Employee Retention Statistics and Facts
- Almost 3.5 million American workers quit their jobs in April 2019.
- The ideal, and the US average, employee retention rate is 90%.
- 25% of millennial workers have had five or more jobs.
- 91% of millennials don’t expect to stay with the same company for more than three years.
- 24% of Gen X workers stay with their current company due to financial concerns.
- The cost of employee turnover in 2018 exceeded $600 billion.
- Replacing highly skilled workers costs 213% of their annual salary.
- Hiring a new employee typically takes 52 days and $4,000.
- Employee recognition programs can reduce the turnover rate by 31%.
- The employee recognition market in the US is worth $46 billion.
Employee Retention in 2019 Data
1. 3.48 million Americans quit their jobs in April 2019.
(Bureau of Labor Statistics)
Ever since April 2018, the number of people quitting their jobs has been increasing. During April 2018, 3.3 million Americans quit. In April 2019, the number went up to 3.48 million. For businesses across the US, this trend should be a cause for concern and a wakeup call.
2. The average employee retention rate in the US for 2019 is 90%.
(Employee Engagement, PayScale)
The average American company will replace no more than 10% of their employees this year. This figure is on par with the retention rate that the thriving organizations around the world maintain.
3. 44% of full-time employees feel burned out on occasion.
Almost a quarter (23%) of the 7,500 full-time workers included in a 2018 survey said they feel burned out at work always or very often. Burned-out employees are less confident, less productive, and, ultimately, less likely to stay with the company, employee engagement statistics from 2018 documented.
4. 49% of high-performing employees list good relations with colleagues as one of the reasons they stay with their employer.
Good relations with colleagues are the main reason high performers remain with their employers. Almost half of those surveyed listed this as one of the primary reasons behind them not switching jobs. Good salary, interesting work, good working conditions, and job security were also commonly listed.
5. Only 38% of US employers offer paid parental leave.
Just over a third of employers provide new parents with the parental leave option. Human Resources retention strategies need to address this issue.
Mothers who decide not to take advantage of their parental leave option can expect serious difficulties. In fact, just 40% of them will be provided with sufficient break time and a private space at work to support breastfeeding. The same percentage (40%) of mothers have no alternative but to miss work when their child is sick, with 56% not getting paid for doing so.
6. Millennials are the generation that’s most likely to change jobs.
Employee retention rate statistics indicate that millennials are not a generation that sticks with their first employer for the entirety of their career, regardless of the work conditions. However, six in ten millennials are open to job opportunities. Also, they’re the least engaged of all generations.
7. 91% of millennials expect to stay less than three years with the same employer.
Job retention rates for young adults suggest the millennial population has low expectations when it comes to their employers. Most of them don’t expect to stick around for long. Considering that they are the largest part of the US workforce, employers might need to hear their demands.
8. 45% of millennials would quit a job that uses substandard technology.
One of the ways employers can get this generation interested in working for them is by utilizing the latest technology. Staff retention for the millennial population heavily depends on the technological aspect; 82% of millennials say their decision to go with a certain company had their workplace tech as one of the major deciding factors.
9. Employees stay longer with a company now than they did 25 years ago.
(The United States Bureau of Labor Statistics)
In 1983, the average employee turnover was around 3.5 years. Today’s average employee stays with the same company for 5.1 years, employee retention statistics show.
10. 69% of employees would improve their performance if their efforts were appreciated.
Employees need to feel recognized for their contribution and hard work. Most them would put more effort into their work if those efforts were met with some recognition from their superiors. A survey revealed that 59% of employees report their bosses don’t show enough appreciation, which makes them feel undervalued. However, 46% of employees claim that lack of leadership communication is driving them to seek employment elsewhere.
Employee Turnover Statistics
11. Financial stability is why 24% of Generation X workers stay with their employer.
The generation born between baby boomers and millennials mostly stays with their employers due to healthcare and insurance concerns; 56% of them are worried about losing these benefits, while close to a quarter stay with their organization due to financial concerns.
12. The average turnover rate in 2018 in the United States was 44.3%.
(Bureau of Labor Statistics)
According to the newest job statistics, the turnover rate in the US is on the rise. It has increased significantly since 2014, when it was at just 40.3%.
13. The 2019 cost of turnover was over $600 billion.
With an estimated 42 million workers quitting in 2018, businesses across the US spent a fortune looking for replacements. The cost of employee turnover 2018 numbers are going to keep climbing; by the end of 2019, the cost is expected to reach $680 billion.
14. Bad hiring decisions are the main cause of employee turnover.
Hiring managers and their failure to choose the right candidate is to blame for the majority of turnover. Bad hiring decisions are responsible for up to 80% of the employee turnover.
To avoid these scenarios, hiring managers should make use of the best background check services when they need to check candidates for a position.
15. Poor performance by their superior makes employees 4x more likely to quit.
General employee retention rate statistics tell us that half of all workers would, or have quit a job because of a poor manager. 56% think managers get a promotion too soon, and 60% think managers need training. In addition, their managers’ poor work performance can be a major factor in their leaving the job; 75% of those who resign do so due to this reason.
16. Companies spend six to nine months worth of an employee’s salary to replace them.
(The Society for Human Resource Management (SHRM))
Employees leave work for many reasons; some find better-paying jobs, while others go back to school or decide to dedicate more time to their families. Whatever the reason, it’s an undeniable fact that employee turnover is costly and disruptive. Employee retention statistics for 2019 reveal replacing an employee who earns $60,000 per year can run up the company anywhere between $30,000 – $45,000 in recruiting and training costs.
17. It costs 213% of their annual salary to replace highly skilled workers.
(The Center for American Progress)
In case a highly skilled employee quits, the business is, undoubtedly, going to have to break the bank recruiting and training a suitable replacement. For those making under $30,000, the story is a little different; the employer will spend around 16% of their annual pay replacing them according to the latest employee training statistics.
18. 11 out of 100 employees in the Finance and Insurance industry stay with the same company for over 36 months.
For high-pressure jobs that come with tons of stress and reliability, turnover figures can get insane. Even with its famously high pays, the finance sector is able to retain just 11% of their employees for longer than three years.
Employee Turnover Rates By Industry
19. Industries in the US have an average turnover rate of 17.8%.
(Compensation Force Study)
Even though the rates vary by sector, the average turnover rate for all major industries in the US has managed to stay below 18% since 2016. Some industries contribute more to the low average; the turnover rate in the utilities and insurance industries, is at 8.8% and 12.2% respectively. On the other end of the spectrum, it sits at 28.6% in the hospitality industry, employment retention rate data shows.
20. The restaurant industry employee turnover rate in 2016 surpassed a massive 70%.
(National Restaurant Association)
For every 10 restaurant workers, seven left their job in 2016, costing restaurants a fortune in employee re-employing and training. The cost of losing and replacing one hourly employee can be as high as $5,864. If your restaurant is maintaining a 70% annual employee turnover rate, you’re losing $428,072. Employee retention statistics from 2018 show that things didn’t get better; the number went up to 74.9%.
21. The hotel and motel industry has a turnover rate of 73.8%.
The hotel and motel industry has a much higher turnover rate than the annual average of 10% or even the tolerable one of 15%. Having new employees all the time can make it challenging to satisfy customer expectations.
22. The highest job dissatisfaction rate is in the hospitality industry.
Close to a third (31%) of all hotel, food, and hospitality workers are not happy with their jobs. A staggering 70% of them have considered quitting. Why employees quit statistics show that the leading reasons for dissatisfaction included small salary, the lack of recognition, the lack of benefits, and the lack of advancement ability. The figures listed for this industry branch include seasonal workers, but they do not represent a cause for concern.
23. The retail industry has an employee turnover of 13%.
(The Center for American Progress, LinkedIn)
Employee satisfaction and retention is a major issue for some other industries, however:
The retail industry has a turnover rate of 13%. Turnover expenses for cashiers can range from $2,286-$4,313, and the cost to replace hourly staff can vary from $3,372-$4,291, which is not a high price to pay for businesses that replace poorly performing workers.
24. The software industry shares its turnover rate with retail.
The analysis of the tech industry found that its software portion has difficulties keeping employees; with a turnover rate of 13%, the employment retention rates for those working in the software are the lowest among all industries.
25. The healthcare industry turnover increased by 0.9%.
The healthcare industry shares its turnover issues with the finance sector mentioned in the previous section; the stressful work environment is causing workers to leave. The overall unemployment rate was 3.5% in 2019, and it wasn’t so low since 1969.
The Cost of Employee Retention
26. It takes 52 days and $4,000 for an average business to fill a position.
Between advertising available positions, checking applications, and interviewing candidates, the recruiting process represents a giant expense for companies based in the US. In addition to the money it takes, hiring new employees represents a huge time investment.
27. Millennial turnover costs the US economy $30.5 billion per year.
A report found that just over a fifth (21%) of all millennial employees have switched jobs within the past 12 months. Additionally, 60% of millennials report that they’re open to new job opportunities. When it comes to non-millennial workers, job satisfaction statistics from 2018 show that 45% of them are willing to switch jobs if a better opportunity comes around.
28. Employee recognition programs can reduce the turnover rate by up to 31%.
Job dissatisfaction takes place when employees feel unappreciated. and a little recognition can provide the solution. Data suggests companies with employee recognition programs reduce their voluntary turnover by 31%.
29. The employee recognition market is worth $46 billion.
A typical US business spends 1-2% of its payroll on gifts for employees. These employee retention benefits include various items, from thank-you cards to gold watches. However, employees are typically not awarded for their performance. Instead, the rewards are based on tenure.
30. Employee onboarding typically has a $4,125 starting point.
(bambooHR, Glassdoor, Gallup)
There’s no better way to improve employee retention than to start treating them well from the beginning. This is the reason why onboarding has become such a huge deal in the business world. It is not costly, and a typical organization with good onboarding practices can expect to improve their new hire retention by up to 82%. However, just 12% of employees find that their company has a good onboarding practice.
After going through the employee retention statistics listed above, one can’t help but wonder whether things will ever change for the average American worker. We learned that those who perform at a high level often remain unrecognized, especially in high-stress work environments.
We also learned that the majority of young adults don’t even expect to be recognized for their work. However, Human Resources is an always-evolving field, and there are always companies who excel at it. Just keep looking for them.
Frequently Asked Questions (FAQ)
What is the definition of employee retention?
Employee retention is defined as the success rate of a business in ensuring that the current staff stays with the company. Reducing turnover and keeping the talent within the organization by providing a competitive salary, together with other perks and benefits, has become an imperative for any modern business, no matter how big or small, that wants to stay afloat.
Why is employee retention important?
The importance of employee retention for any business can be seen in multiple aspects. Firstly, in-house morale is better maintained with staff who are familiar with each other, which boosts productivity. Secondly, customers can take some getting used to a new face, which can harm the sales of both B2B and B2C organizations. Finally, the time and money required to fill a position and train the new recruit is the stuff HR nightmares are made of.
What is a good employee retention rate?
The employee turnover rate, or the rate at which employees leave a business, should, ideally, be around 10%. This means that the average organization should aim to keep 90% of its employees, while getting rid of the 10% (or less) who are underperforming. However, if 10% of those who are high performers leave, the company might be in a serious mess.
What is onboarding?
Employee onboarding is a process that companies use to acclimatize their new hires to the work environment. These programs are designed to provide new employees with the skills, knowledge, and behavior that will make them effective workers.
How do you ensure employee retention?
In order to ensure that the high performing workers stay with them, companies should abide by the following employee retention rules which employee retention statistics highlight:
- Employee recruitment and vetting should be taken seriously; avoid hiring candidates who jump ship frequently.
- Employee engagement should be kept high; highly engaged employees are more likely to stay with the company.
- Employee training options should be constant; investing in your employees’ professional development shows commitment.
- Pay and perks should follow the trends; paying well and offering perks (company laptops, retreats, etc.) might be the best way to show and entice loyalty.
- Employee Engagement
- U.S. Bureau of Labor Statistics
- PR Newswire
- Work Institute
- The Society for Human Resource Management (SHRM)
- The Center for American Progress
- Compensation Force Study
- National Restaurant Association
- The Ladders