Knowledge Center

Turnover and Retention

Turnover

In the United States, Employee Turnover Is On the Rise1

Nearly 59 million employees left their jobs in 2015.2

  • In the same year, almost one quarter (33.4 million) of US employees voluntarily quit their jobs.3
     

  • Almost two-fifths (37%) of US employees are thinking about leaving their jobs, an increase of 33% since 2011.4

Turnover is high for women in STEM. Almost one-third (32%) of United States women indicate that they are likely to quit their private sector science, technology, and engineering jobs in the next year, making them 45% more likely than men to quit.5

Working conditions and culture drives turnover. A study of over 1,000 women former engineers revealed the top reasons for leaving the field:6

  • Almost half of the women surveyed stated that they were leaving engineering due to working conditions, such as low compensation, too much travel, or lack of advancement.7
     

  • Nearly one in three (30%) women specified organizational climate as their reason for leaving.8
     

  • Approximately one-fourth (23%) of women cited a need for more time with family as a reason for leaving.9

 

Globally, Talent Is Increasingly Scarce10

In 2015, the percentage of talent shortages reported by global employers was at a seven-year peak (38%).11

  • Employers in Japan, Peru, Hong Kong, Brazil, and Romania reported the most difficulty filling open jobs.12
     

  • Talent shortages among Asia-Pacific employers are higher than the global average, and may particularly be an issue for employers in Japan (83%), Hong Kong (65%), India (58%), and Taiwan (57%).13
     

  • While most nations are short on skilled trade laborers, employers in India are finding the most difficulty filling positions in accounting/finance and information technology.14
     

  • In 2012–2013, the retail industry in Canada faced the highest rates of voluntary turnover (20.6%) compared with the national average of 7.3%.15

Only one in ten (10%) global employers are reaching out to previously untapped talent pools, such as women or young people, to fill employment gaps.16

Employers at the global level who are exploring alternate work options are the most likely to increase attention on improving their talent pipeline.17

 

Turnover Costs Businesses Time, Money, and Performance18

The median amount that organizations spend to replace an employee is about one-fifth (21.4%) of that worker’s salary, meaning it would cost about $10,700 to replace a worker earning $50,000 a year.19

  • Replacement costs can be as high as 50%-60% of an employee’s annual salary,20 with total costs associated with turnover as high as 150%–200% of an employee’s annual salary.21

 

People Leave Jobs Due to Push and Pull Factors22

“Pull” factors are external influences that attract employees to a new job opportunity.23

There is little companies can do to change pull factors.24

  • Pull factors include jobs that offer:25
    • Greater compensation.
    • More freedom.
    • Interesting and challenging work.
    • A better geographical location.

“Push” factors are internal, leading dissatisfied workers away from organizations.26

Companies can control push factors.27

  • Push factors include:28
    • Workplace bullying, intimidation, or harassment.29
    • Limited career opportunities or advancement.
    • Excessive workloads.
    • A lack of competitive recognition or awards.
    • Work demands taking time away from family life.

 

Mothers Are Pushed and Pulled, Rather Than "Opting" Out30

Children’s needs (44%) and childcare costs (35%) were among the top reasons mothers left their jobs in a survey from 2011.31

However, several “push” factors also contribute to mothers leaving work, including:32

  • A lack of flexibility (12%).

  • No part-time options (8%).

  • Requirements to work more than 40 hours per week (7%).


Retention

In 2014, the median length of time US workers stayed with their employers was almost five years (4.7 years for men and 4.5 years for women).33

Employees Stay Longer as They Get Older34

Older employees (ages 55 to 64) have a median tenure (10.4 years) over seven years higher than younger workers (ages 25 to 34).35

In 2016, slightly less than half (44%) of Millennials surveyed expect to leave their current employer in the next two years.36

  • A majority of Millennials believe they will leave their current company by 2020 across all of the various countries and regions surveyed, including: the United Kingdom (71%), Latin America (71%), the United States (64%), Canada (61%), Western Europe (60%), and Japan (52%).37

 

Workplace Flexibility May Improve Retention38

In 2012, over two-thirds (67%) of surveyed Americans specified work enjoyment and a work-life fit as reasons they remained in their current jobs.39

Workplace flexibility often leads to talent retention, cost savings, job satisfaction, reduced stress, and fewer negative employee behaviors such as absenteeism and accidents.40

Family-friendly workplaces offer a competitive edge for companies. Over half of stay-at-home mothers stated they would search for an employer with a positive reputation for working mothers (58%) and family-friendly policies (63%).41

  • In order to retain and secure career paths for working mothers, companies can also provide a culture of trust, flexibility, allowances such as the use of paid sick leave to care for sick children, and predictable working hours.42

 

Inclusive Leadership Can Reduce Turnover43

Highly diverse groups may suffer from turnover when stereotypes and favoritism divide people into in-groups and out-groups.44

Inclusive leaders form high-quality relationships based on shared power, mutual trust, respect, and obligation.45

  • Inclusive leaders both value their employees’ unique diversity and also find a common ground to foster a sense of belongingness.46

Four leadership behaviors are linked to feelings of inclusion: EACH (empowerment, accountability, courage, and humility).47

  • When employees feel included, they report higher levels of innovation and team citizenship.48
     
  • When inclusive leaders develop high-quality relationships with employees, employees feel more empowered, develop new skills and responsibilities, and are less likely to leave.49


Additional Resources

Cathy Benko, Robin Erickson, John Hagel, and Jungle Wong, Beyond Retention: Build Passion and Purpose (Deloitte University Press, March 7, 2014).

Petri Bockerman and Pekka Ilmakunnas, “Job Disamenities, Job Satisfaction, Quit Intentions, and Actual Separations: Putting the Pieces Together,” Industrial Relations, vol. 48, no.1 (January 2009): p. 73-96.

Jennifer Cheeseman Day and Barbara Downs, Opting-Out: An Exploration of Labor Force Participation of New Mothers (U.S. Census Bureau, 2009).

Brooks Holtom, Terence R. Mitchell, Thomas W. Lee, and Marion B. Eberly, “Turnover and Retention Research: A Glance at the Past, a Closer Review of the Present, and a Venture into the Future,” The Academy of Management Annals, vol. 2, no. 1 (2008): p. 231-274.

Lynda Laughlin, Maternity Leave and Employment Patterns of First-Time Mothers: 1961-2008 (U.S. Census Bureau Current Population Reports, October 2011).

 “New Calculator for Employers Tallies the Full Cost of Employee Turnover,” Center for Economic and Policy Research press release, May 12, 2015.

 

How to cite this product: Catalyst. Quick Take: Turnover and Retention. New York: Catalyst, August 12, 2016.