Research

Turnover and Retention: Quick Take

Apr 16, 2020

TURNOVER

The Global Talent Shortage Is Almost Double What It Was Ten Years Ago1

The greatest year-over-year2 increases in the talent shortage have been in the United States, Sweden, Finland, Hungary, and Slovenia.3

By 2030, talent shortages will significantly impact the financial and business services sector with projected shortfalls.4

  • The United States = $435.7 billion
  • United Kingdom = $90.0 billion
  • Germany = $136.9 billion
  • China = $147.1 billion
  • Mexico = $9.0 billion

US companies had an average turnover rate of 22% in 2018, with 15% attributed to voluntary turnover.5

  • The majority (81%) of employees who left voluntarily did so for a better job opportunity.6

Canadian companies had an average turnover rate of 21% in 2018, with 12% attributed to voluntary turnover.7

  • 77% of Canadian employees who left voluntarily did so for a better job opportunity.8

By 2030, India is the only country projected to have a talent surplus of skilled labor of 1.1 million workers.9

Half of US Employees Have Thought About Leaving Their Current Employer10

In 2019, the total quits rates for all industries was 27.9%, which has steadily increased since 2015, when it was 23.7%.11

A negative workplace culture can contribute to employee turnover, with three-quarters of workers surveyed saying management is responsible for setting the tone.12

  • Even with high numbers of layoffs reported with the global COVID-19 pandemic, employee turnover is still a risk for organizations that do not consider the additional support their employees may need during this time.13

People of color who experience microaggressions in the workplace are more likely to quit.14

  • More than a third (35%) of Black professionals intend to quit within two years compared with 27% of white professionals, with rates being slightly higher for Black women (36%) than Black men (33%).15
  • In the United States and Canada, workers of color who reported feeling highly on-guard due to workplace biases were more likely to quit than those who reported lower levels of feeling on-guard.16
Turnover Costs Have Almost Doubled in The Past Ten Years17

Separation, replacement costs, training, and lost productivity all add up, making it expensive to lose an employee.18

In the United States, the total cost of voluntary turnover was $617 billion in 2018.19

  • There is no agreed-upon standard to accurately measure the full cost of employee turnover. Using 33% of an employee’s salary for the US median income of $45,000, one study estimates that the average total cost for turnover in the US is $15,000/employee.20
  • One study determined that the cost of turnover due to workplace culture has been $223 billion over the past five years.21

The average cost-per-hire in the United States was $4,129 in 2016, with an average of 42 days to fill an open position.22

People Leave Jobs Due to Push and Pull Factors23

Over 77% of voluntary turnover is preventable and includes push factors such as career development opportunities, work environment, management behavior, job characteristics, compensations and benefits, and work-life balance.24

  • Career development (22%) and work-life balance (12%) are the most often cited reasons for leaving a job, and these numbers are on the rise.25
    • 25% of employees who cited career development as their reason for leaving did so for growth and development opportunities.26
Employees Are at a High Risk for Turnover Their First Year27

Over a third (38.6%) of turnover in 2018 was due to employees leaving in their first year.28

  • Almost half (43%) of new employees who left did so within their first 90 days.29
Almost Half of Younger Employees Might Leave Their Employer in the Next Two Years30

49% of Millennials reported that they would leave if they had a choice in 2019 compared with 38% in 2017.31

  • Dissatisfaction with their pay or benefits (43%), not enough advancement opportunities (35%), and lack of learning and development (28%) are the top three reasons.32
  • Generation Z (born between the mid-1990s to today) also cites dissatisfaction with pay or benefits (34%), not enough advancement opportunities (33%), and lack of learning and development (27%) as the top three reasons they might leave their employer in the next two years.33
Inclusive Leadership Can Reduce Turnover34

Diverse groups may suffer from turnover when favoritism divides people into in-groups and out-groups.35

Stereotypes of people of color in the workplace contribute to a higher emotional tax burden for workers of color, in which these employees feel “on guard” at work and may contribute to their intention to leave.36

Managers who practice both leading outward, demonstrating accountability, ownership, and allyship, and leading inward, demonstrating curiosity, humility, and courage, may increase retention.37

  • Inclusive leaders can increase employees’ experiences of being valued, authentic, trusted, and psychologically safe.38
  • High feelings of employee belonging have been linked to a 50% drop in turnover risk.39

RETENTION

The Length of Time US Employees Remained at Their Jobs Is Stable40

In January 2018, the median length of time US workers stayed with their employers was 4.2 years, unchanged from January 2016.41

  • Women stayed with their employers a median of 4.0 years, compared to 4.3 years for men.42

Tenure by occupation in the United States:43

  • Management: 6.4 years
  • Architecture and engineering: 5.7 years
  • Business and financial operations: 4.5 years
  • Computer and mathematical occupations: 4.3 years
  • Legal: 5.1 years
Older Employees Stay Longer44

Older employees (ages 55 to 64) have a median tenure of 10.1 years—over three times longer than that of younger workers (ages 25 to 34), whose median tenure is 2.8 years.45

Workplace Flexibility May Improve Retention46

Half of employees surveyed said they would leave their job if they found a more flexible one.47

  • Employees who lack access to flex work are twice as likely to say they are dissatisfied.48
Stressed Employees Are Three Times More Likely to Quit49

Burnout costs the US more than $300 billion a year due to factors such as absenteeism, turnover, and reduced productivity.50

ADDITIONAL RESOURCES

Catalyst, Quick Take: Why Diversity and Inclusion Matter.

Catalyst, Tool: Vital Signs.

Chartered Institute of Personnel and Development, Employee Turnover and Retention (July 23, 2019).

Anthony C. Klotz and Mark C. Bolino, “Do You Really Know Why Employees Leave Your Company?,” Harvard Business Review, July 31, 2019.

Achyuta Adhvaryu, Teresa Molina, and Anant Nyshadham, “Want Fewer Employees to Quit? Listen to Them,” Harvard Business Review, April 22, 2019.

Mark Tarallo, “How to Reduce Employee Turnover Through Robust Retention Strategies,” Society for Human Resource Management, September 17, 2018.

Society for Human Resource Management, Turnover Cost Calculation Spreadsheet. (SHRM membership may be required.)

 

How to cite this product: Catalyst, Quick Take: Turnover and Retention (April 16, 2020).

  1. ManpowerGroup, Closing the Skills Gap: What Workers Want – Talent Shortage 2020 (2020).
  2. Year-Over-Year (YOY) is a financial comparison used to compare two or more measurable events on an annualized basis. Investopedia, “Year-Over-Year (YOY),” February 10, 2020.
  3. ManpowerGroup, Closing the Skills Gap: What Workers Want – Talent Shortage 2020 (2020).
  4. Korn Ferry, The Future of Work: The Global Talent Crunch (2018): p. 13.
  5. Mercer, “North American Employee Turnover: Trends and Effects.”
  6. Mercer, “North American Employee Turnover: Trends and Effects.”
  7. Mercer, “North American Employee Turnover: Trends and Effects.”
  8. Mercer, “North American Employee Turnover: Trends and Effects.”
  9. Korn Ferry, The Future of Work: The Global Talent Crunch (2018): p. 12.
  10. Society for Human Resource Management, The High Cost of a Toxic Workplace Culture: How Culture Impacts the Workforce—and the Bottom Line (2019).
  11. Quits are defined by the Bureau of Labor Statistics as “generally voluntary separations initiated by the employee. Therefore, the quits rate can serve as a measure of workers’ willingness or ability to leave jobs.” “Job Openings and Labor Turnover Survey News Release,” U.S Bureau of Labor Statistics press release, March 17, 2020.
  12. Society for Human Resource Management, The High Cost of a Toxic Workplace Culture: How Culture Impacts the Workforce—and the Bottom Line (2019).
  13. Kelly Oconnell, “5 Important HR Considerations in the Time of COVID-19,” business.com, March 26, 2020.
  14. Dnika J. Travis and Jennifer Thorpe-Moscon, Day-to-Day Experiences of Emotional Tax Among Women and Men of Color in the Workplace (Catalyst, 2018); Jennifer Thorpe-Moscon, Alixandra Pollack, and Olufemi Olu-Lafe, Empowering Workplaces Combat Emotional Tax for People of Colour in Canada (Catalyst, 2019); Emily Gawlak, Being Black in Corporate America: An Intersectional Exploration (Center for Talent Innovation, 2019).
  15. Emily Gawlak, Being Black in Corporate America: An Intersectional Exploration (Center for Talent Innovation, 2019).
  16. Dnika J. Travis and Jennifer Thorpe-Moscon, Day-to-Day Experiences of Emotional Tax Among Women and Men of Color in the Workplace (Catalyst, 2018); Jennifer Thorpe-Moscon, Alixandra Pollack, and Olufemi Olu-Lafe, Empowering Workplaces Combat Emotional Tax for People of Colour in Canada (Catalyst, 2019).
  17. Thomas F. Mahan, Danny Nelms, Christopher Ryan Bearden, and Brantley Pearce, 2019 Retention Report: Trends, Reasons & A Call to Action (Work Institute, 2019).
  18. Lindsay Sears, Ph.D., 2017 Retention Report: Trends, Reasons & Recommendations (Work Institute, 2017).
  19. Thomas F. Mahan, Danny Nelms, Christopher Ryan Bearden, and Brantley Pearce, 2019 Retention Report: Trends, Reasons & A Call to Action (Work Institute, 2019).
  20. Thomas F. Mahan, Danny Nelms, Christopher Ryan Bearden, and Brantley Pearce, 2019 Retention Report: Trends, Reasons & A Call to Action (Work Institute, 2019); Lindsay Sears, Ph.D., 2017 Retention Report: Trends, Reasons & Recommendations (Work Institute, 2017).
  21. Society for Human Resource Management, The High Cost of a Toxic Workplace Culture: How Culture Impacts the Workforce—and the Bottom Line (2019).
  22. Society for Human Resource Management, 2016 Human Capital Benchmarking Report (2016): p. 16.
  23. Iqtidar Ali Shah, Zainab Fakhr, Ahmad Muhammd Shakil, and Khalid Zaman, “Measuring Push, Pull, and Personal Factors Affecting Turnover Intention: A Case of University Teachers in Pakistan,” Review of Economic & Business Studies, vol. 3, no. 1 (June 2010): p. 167-192.
  24. Thomas F. Mahan, Danny Nelms, Christopher Ryan Bearden, and Brantley Pearce, 2019 Retention Report: Trends, Reasons & A Call to Action (Work Institute, 2019).
  25. Thomas F. Mahan, Danny Nelms, Christopher Ryan Bearden, and Brantley Pearce, 2019 Retention Report: Trends, Reasons & A Call to Action (Work Institute, 2019).
  26. Thomas F. Mahan, Danny Nelms, Christopher Ryan Bearden, and Brantley Pearce, 2019 Retention Report: Trends, Reasons & A Call to Action (Work Institute, 2019).
  27. Thomas F. Mahan, Danny Nelms, Christopher Ryan Bearden, and Brantley Pearce, 2019 Retention Report: Trends, Reasons & A Call to Action (Work Institute, 2019).
  28. Thomas F. Mahan, Danny Nelms, Christopher Ryan Bearden, and Brantley Pearce, 2019 Retention Report: Trends, Reasons & A Call to Action (Work Institute, 2019).
  29. Thomas F. Mahan, Danny Nelms, Christopher Ryan Bearden, and Brantley Pearce, 2019 Retention Report: Trends, Reasons & A Call to Action (Work Institute, 2019).
  30. Deloitte, The Deloitte Global Millennial Survey 2019: Societal Discord and Technological Transformation Create a “Generation Disrupted” (2019).
  31. Deloitte, The Deloitte Global Millennial Survey 2019: Societal Discord and Technological Transformation Create a “Generation Disrupted” (2019).
  32. Deloitte, The Deloitte Global Millennial Survey 2019: Societal Discord and Technological Transformation Create a “Generation Disrupted” (2019).
  33. Deloitte, The Deloitte Global Millennial Survey 2019: Societal Discord and Technological Transformation Create a “Generation Disrupted” (2019).
  34. Lisa H. Nishii and David M. Mayer, “Paving the Path to Performance: Inclusive Leadership Reduces Turnover in Diverse Work Groups,” Cornell Center for Advanced Human Resource Studies Research Link, no. 3 (February 2010).
  35. Judith A. Clair, Beth K. Humberd, Elizabeth D. Rouse, and Elise Jones, “Loosening Categorical Thinking: Extending the Terrain of Theory and Research on Demographic Identities in Organizations,” The Academy of Management Review (August 2018); Lisa H. Nishii and David M. Mayer, “Paving the Path to Performance: Inclusive Leadership Reduces Turnover in Diverse Work Groups,” Cornell Center for Advanced Human Resource Studies Research Link, no. 3 (February 2010).
  36. Dnika J. Travis and Jennifer Thorpe-Moscon, Day-to-Day Experiences of Emotional Tax Among Women and Men of Color in the Workplace (Catalyst, 2018); Jennifer Thorpe-Moscon, Alixandra Pollack, and Olufemi Olu-Lafe, Empowering Workplaces Combat Emotional Tax for People of Colour in Canada (Catalyst, 2019).
  37. Dnika J. Travis, Emily Shaffer, and Jennifer Thorpe-Moscon, Getting Real About Inclusive Leadership: Why Change Starts With You (Catalyst, 2019).
  38. Dnika J. Travis, Emily Shaffer, and Jennifer Thorpe-Moscon, Getting Real About Inclusive Leadership: Why Change Starts With You (Catalyst, 2019).
  39. Evan W. Carr, Andrew Reece, Gabriella Rosen Kellerman, and Alexi Robichaux, “The Value of Belonging at Work,” Harvard Business Review, December 16, 2019.
  40. “Employee Tenure in 2018,” Bureau of Labor Statistics press release, September 20, 2018.
  41. “Employee Tenure in 2018,” Bureau of Labor Statistics press release, September 20, 2018.
  42. “Employee Tenure in 2018,” Bureau of Labor Statistics press release, September 20, 2018.
  43. “Table 6. Median Years of Tenure With Current Employer for Employed Wage and Salary Workers by Occupation, Selected Years, 2008-18,” U.S. Bureau of Labor Statistics, Economic News Release, September 20, 2018.
  44. “Employee Tenure in 2018,” Bureau of Labor Statistics press release, September 20, 2018.
  45. “Employee Tenure in 2018,” Bureau of Labor Statistics press release, September 20, 2018.
  46. Annie Dean and Anna Auerbach, “96% of U.S. Professionals Say They Need Flexibility, but Only 47% Have It,” Harvard Business Review, June 5, 2018.
  47. Annie Dean and Anna Auerbach, “96% of U.S. Professionals Say They Need Flexibility, but Only 47% Have It,” Harvard Business Review, June 5, 2018.
  48. Annie Dean and Anna Auerbach, “96% of U.S. Professionals Say They Need Flexibility, but Only 47% Have It,” Harvard Business Review, June 5, 2018.
  49. Natalia Peart, “Making Work Less Stressful and More Engaging for Your Employees,” Harvard Business Review, November 5, 2019.
  50. Natalia Peart, “Making Work Less Stressful and More Engaging for Your Employees,” Harvard Business Review, November 5, 2019.