A company is only as good as the employees working for it.
Finding suitable employees is hard.
But is keeping them even harder?
Plenty of employee retention statistics suggest that companies should be focusing more on keeping their top talent.
Long-term retention strategies to improve employee retention are important in order to boost employee morale. But let’s talk numbers:
Employee Retention Statistics (Editor’s Pick):
- 75% of employees do not stay at their jobs for more than five years.
- Almost 3.5 million US workers quit their jobs in April 2019.
- 3 million people in the US quit their jobs each month.
- Highly engaged employees are 87% less likely to leave their job.
- More than half of all organizations globally have trouble retaining high-value employees.
- Bad culture breeds high turnover and low employee retention.
- 45% of employees that are referred to a company last at least two years.
Before we dive deeper into employee retention statistics, let’s break down some of the basics of the concept.
What is employee retention?
Employee retention is, simply put, the ability of an organization to retain its employees.
Employee retention is more than just numbers. Many experts consider it as the efforts employers make to retain their employees through employee retention strategies.
Why is employee retention important?
The importance of employee retention is often underestimated. It is perhaps one of the most important things that contribute to the growth and success of any and every company. All good businesses succeed through consistency, maintaining a consistent roster of dedicated employees is paramount to that.
Calculating Employee Retention Rates
You can measure your employee turnover rate by dividing the number of employees that stayed with the company during a given period of time by the total number of employees in the company at that time. Then multiply that number by 100.
What do the numbers tell us?
1. 75% of employees in the US don’t stay at their jobs for more than five years.
The latest employee retention statistics revealed that 75% of the employees said they did not stay at a company for more than five years.
The biggest driver of this trend is the booming economy. The United States has more job openings than people to fill them, this is exactly the reason why U.S. businesses lose $1 trillion every year – high employee turnover statistics.
A separate survey by the Bureau of Labor Statistics revealed:
- American workers who quit their jobs in 2018 topped 40 million (26.9% of the workforce)
- Close to two thirds (65.9%) of those surveyed said they had been with their current employer five years.
- But less than a quarter (24.5%) said they planned to remain in their place of employment for six or more years.
2. Almost 3.5 million American workers quit their jobs in April 2019.
Further data from the Bureau of Labor Statistics revealed that the number of people quitting their jobs has been increasing year-to-year.
In April 2018, 3.3 million Americans quit their jobs. The next year that number went up to 3.48 million.
For businesses across the US, this trend should be a wakeup call. It’s important for companies to understand the concept of employee retention in order to improve retention and engagement.
3. In 2018, over 3.5 million Americans quit their jobs every month.
More data from the Bureau of Labor Statistics revealed that three and a half million employees quit their jobs every month.
There are plenty of job satisfaction statistics that show the magnitude of the issue.
People leave their jobs for different reasons. The quicker organizations begin to grasp those reasons and find ways to improve employee retention the better they’ll be able to curb the loss of talent.
4. Employees that are highly engaged are 87% less likely to quit their job.
Engaged employees are those fully invested in their work and their responsibilities and are satisfied with their work experience.
Engaging employees is one of the most essential employee retention strategies. Productivity is directly linked to employee engagement statistics.
Some effective employee retention strategies include:
- Providing more positive feedback.
- Giving employees opportunities to grow.
- Challenging employees in a balanced way.
- Encouraging creativity.
- Fostering an environment of open communication.
5. More than half of all organizations globally have trouble retaining high-value employees.
A recent study by Willis Towers Watson revealed that turnover is actually a complex issue.
Although hiring is at an all-time high in the US, unemployment is the lowest it’s been since 1969. The retention rate is decreasing because workers have more than their fair share of choices. There are now about one million more job openings than unemployed workers, so turnover rates have increased for many organizations.
This is problematic, especially given the caliber of employees organizations are losing.
6. Bad company culture breeds low employee retention.
According to a Hays report, 2,000 employees were polled and it was revealed that 43% were actively seeking new employment.
Corporate culture was pointed out as the main reason.
Employees who rate their company’s culture poorly are 24% more likely to leave their organizations within the first year. This proves the importance of creating a nice working environment.
Some other symptoms of a bad company culture include:
- Poor employee-manager relationships.
- Lack of recognition.
- Undervaluing the staff.
- Burnout due to a disproportionate work/life balance.
- Lack of career progression.
- An unclear onboarding process.
7. 87% of HR leaders consider improved retention a high priority over the next five years.
According to research by Kronos and Future Workplace, 87% of HR leaders consider innovative employee retention strategies a high priority.
However, progress for many organizations has been halted by competing priorities and a lack of resources. Organizations themselves are facing a bevy of challenges such as:
- Not having the budget to match an employee’s salary expectations.
- Being unable to create a dearth of opportunities.
- Hiring the right person for the wrong role.
- Unrealistic employee expectations from the job.
8. 45% of employees that are referred to a company last at least two years.
Employee Referral Statistics show that the retention rate of referred employees after two years is 45%, compared to 20% from job boards. Simply put, referred employees stay longer with companies as compared to other hires.
Employee Referral Programs have become increasingly popular in recruiting qualified candidates. And these programs yield results:
- Referred candidates are 55% faster to hire.
- Employee referrals reduce the cost per hire.
- Referrals reduce the turnover rate.
- Employee referrals improve offer acceptance rate.
9. 68% of employees said their organization’s recognition program positively affects retention.
According to a joint survey by SHRM and Globoforce, recognition is among the strategies that help create a positive workplace culture and experience.
Employee benefits also play a critical role in improving employee retention. Offering attractive compensation packages, a lucrative rewards system, and effectively pacing workflow are likely to minimize the chance of employees leaving.
There are a number of employee retention ideas an organization can try to retain their workforce. These areas include:
- Training and development.
- Strategic onboarding processes.
- Creating a supportive workplace.
- Explicitly link rewards to retention.
10. Location Labs boasts a 95% retention rate and has never laid off an employee.
(Source: First Round)
Location Labs is a US-based mobile security company that boasts one of the best employee retention rates. They’ve retained 95% of all their employees since the company started in 2000 and have never laid a single one of them off.
Well, it comes down to two key factors: they’ve sought ways to gauge their employees’ happiness and subsequently reinforce behavior that contributes to that happiness. Because, again, a happy employee is an engaged employee and an engaged employee is a productive one.
According to COO Joel Grossman, the company understands what good retention looks like. Here are some key factors that contributed to Location Labs’ near-perfect employee retention rate.
- A high referral rate (over 40% of their new hires are by referral).
- Communication and feedback.
- Emphasizing working well together.
- Making sure employees feel empowered and productive.
- Exit interviews for when people do leave.
11. 93% of employees would stay at a company longer if it invested in their careers.
LinkedIn’s 2018 Workforce Learning Report revealed that 93% of employees would stay at a company longer if it invested in their careers. The vast majority of millennials (87%) say professional growth and development opportunities are top priorities, according to another survey by Gallup. Investing in employee career progression is essential if companies want to increase employee retention.
Here are four effective retention tools and resources for developing talent:
- Develop soft skills.
- Offer micro-learning.
- Get managers involved.
- Integrate learning into employee experience.
12. Employees with a good work-life balance are 10% more likely to stay at their companies.
Employees that have a healthy work-life balance are 10% more likely to remain at their jobs than employees that don’t. This is hardly surprising – jobs that put an unreasonable amount of strain on our personal lives are undoubtedly off-putting.
Founder and CEO of Wheelhouse DMG Aaron Burnett believes in incorporating life, joy, and passion into the work environment and blurring the lines between the professional and recreational. Thinking holistically about work and life allows for a more people-centered culture.
13. A $100,000 investment in employee retention will pay for itself if it prevents seven employees from leaving.
(Source: Work Institute)
Employee retention techniques like investing in employee retention benefits can significantly outcome the direct costs of employee turnover. Just look at what a significant outcome a small investment in retention can have:
- For every 100 employees who move their company ratings from fair or poor to excellent, 37 fewer employees would leave in the next year, amounting to $555,000 in savings.
- For every 100 employees who move their company ratings from good or very good to excellent, 26 fewer employees would leave in the next year, amounting to $390,000 in savings.
- For every 100 employees who move their growth and development ratings from fair or poor to excellent, 21 fewer employees would leave in the next year, amounting to $315,000 in savings.
- For every 100 employees who move their growth and development ratings from good or very good to excellent, 14 fewer employees would leave in the next year, amounting to $210,000 in savings.
It is worth noting that it is beneficial to focus on why employees stay as well as why they leave. Looking at how employees rate survey items such as company ratings and growth/development can also be vital in finding new ways to retain employees
14. Continual learning can increase new hire retention by 25%.
Extending the onboarding process over the first year through continual reinforced learning can increase new hire retention by 25%.
Almost 70% of employees are more likely to stay in the same company for three years if they experienced a great onboarding experience. That’s because 20% of all employee turnover happens within the first 45 days. That’s just over a month when most employees are put on a three-month probationary period.
That gives employers a little over a month to make an impact on new hires, and this starts with a great onboarding process.
There’s no magical solution to employee turnover. However, a well-thought-out employee retention process surely helps. There’s a large disconnect between what employees want and what employers are providing them with. Over 80% of employees want lifelong learning, but 40% of those say that their employers aren’t providing opportunities to upskill.
There’s an opportunity here for companies who want to keep their best employees—commit to their growth and execute a proper employee retention program.
So, what are you doing to keep your employees?
Q: How to improve employee retention?
A: Some key solutions to improving employee retention are:
- paying employees well
- offering flexible work schedules
- providing a comfortable work environment and company culture
- being generous with praise and recognition
Q: How do you retain employees?
A: Companies can retain employees for longer by giving them responsibilities that allow them to grow, showing them that they are respected and appreciated, and rewarding them when they do great.
Q: Why do employees leave?
A: Employee retention statistics show that employees leave for a range of reasons. The one at the top of the list, however, is compensation and benefits. Employees are likely to leave a company if they are not compensated well more than any other reason.