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The concept of employee loyalty has shifted significantly, which became even more apparent during and after the Great Resignation.
While it’s not gone, loyalty is no longer a given.
Workers’ priorities transformed and expanded, and a failure to address them could exacerbate existing challenges. For example, employee engagement statistics show that, despite slight improvements, over two-thirds of the workforce remains disengaged, a reality that plays a significant role in high turnover rates.
The consequences of both extend beyond an HR concern, signaling deeper organizational issues that require strategic solutions.
So, what does it take to shift from turnover to engagement to loyalty?
These insightful employee retention statistics may hold the answer.
Why is Employee Retention Important?
Employee retention is a company’s ability to retain its existing employees.
As such, it’s intertwined with all organizational aspects, from employee engagement and loyalty to effective leadership and workplace culture.
When it’s high, it indicates a company’s doing well by its employees.
However, when retention is low, turnover increases, as do recruitment, onboarding, training, and other costs. It also leaves a poor impression on potential job candidates, affecting competitiveness and employee attraction.
For further exploration of its importance, we’ve looked at recent trends and insights and compiled the latest employee retention statistics, including:
- Turnover rates and costs
- Reasons contributing to this
- What employers can do to increase retention
1) 51% of Employees Are Actively Seeking New Jobs
Gallup’s employee retention and attraction indicators show that one in two U.S. employees have been watching for or actively seeking new jobs in 2024, the highest percentage in the last ten years.
When a large percentage of the workforce is open to leaving an employer, it often signals a more pressing issue, like employee dissatisfaction, low engagement, or a need for a better work-life balance.
However, it could also indicate a strong job market with many opportunities for the workforce.
In both cases, employers should step up if they want to retain top talent and focus on critical areas like improving workplace culture, offering better benefits, and supporting career development.
2) 45 Million Americans Quit Their Job In 2023
That’s 27% of the U.S. workforce who chose to leave their employers voluntarily.
The number has slightly improved from the previous two years, particularly in 2022, when it exceeded 50 million employees.
This period between 2021 and 2022 is called the “Great Resignation,” marked by a mass exodus of workers driven by factors such as the pandemic’s impact on work-life balance, reevaluations of career priorities, and a desire for more fulfilling employment.
3) There Has Been a 37% Quit Rate Increase Since 2014
Despite the momentary relief following the Great Resignation, the job market is still amidst a retention crisis. Even though employee turnover is constant and is to be expected every year, it’s concerning that the rate of resignations has increased by 37% in the last decade.
4) High Turnover Expenses Are Close to a Trillion Dollars
In 2023, U.S. employers spent nearly $900 billion to replace employees who quit.
With such a high turnover, high costs are to be expected. These expenses accumulate between advertising, recruitment, background checks, training, and onboarding. Lost productivity during the transition period and potential disruptions to teamwork and morale also contribute to the total costs.
5) Turnover Costs Range From 19% To 40% Of Base Pay
Per employee, the costs go up to 40% of their base pay. For instance, at this rate, if an employee earns $70,000 annually, the turnover cost would be $28,000.
For some employers, these frequently overlooked turnover costs can total hundreds of thousands of dollars annually. Therefore, companies that fail to recognize or track them may face poor financial results.
6) 29% Of Workers Have Quit a Job Within Three Months of Starting
Not only are workers quitting, but they’re doing so before the completion of an average onboarding period.
Research shows that three in ten workers quit a job within the first 90 days of starting.
Effective onboarding is essential for retention, setting the tone for a new hire’s experience. In fact, employee onboarding statistics reveal that 93% of employers agree that a good experience is critical in influencing a new employee’s decision to stay with the company.
At the same time, workers who engage in structured onboarding programs are 69% more likely to remain for three years.
7) Higher Positions Tend to Have Lower Turnover
Turnover rates in the U.S. vary significantly by department, with higher positions generally experiencing lower rates.
For instance, executives have a turnover rate of 5.4%, while management follows at 7.6%.
In contrast, non-sales professionals face a turnover rate of 10.2%, and para-professional blue-collar workers see a rate of 15.6%.
This trend may hint at more favorable conditions among high-level roles, including better compensation, greater autonomy, or more favorable work environments—all crucial to employee satisfaction.
Source: 2024 US Mercer Turnover Survey
8) Only 25% Of U.S. Employees Would Recommend Their Employer
Gallup’s global indicators on employee retention and attraction point that only a quarter of the workforce would recommend their organization as “a great place.” That means the remaining 75% have some reservations about their experience.
Potential workplace issues, such as inadequate pay, lack of growth opportunities, or unsatisfactory benefits, could explain employees’ high dissatisfaction and mistrust.
However, since there isn’t a one-size-fits-all answer to address these concerns, companies need to recognize their unique turnover drivers.
Below, we explore the most common.
9) By Single Reason, Pay & Benefits is The Most Common Factor for Leaving
Despite a significant decrease in mentions, going from 21% in 2022 to 16% in 2023, “pay and benefits” emerges as the leading (single) reason employees left their jobs.
“Advancement, development, or career opportunities” and “direct supervisor, manager, or senior leadership” follow closely at 12%.
Although employee compensation will likely be a permanent deciding factor, such a low percentage shows that this is no longer the sole contributor to retention.
The numbers showed a different outcome when the single reasons were grouped into large categories.
10) By Category, Engagement & Culture Emerge as The Main Factors for High Retention
Examining separate reasons for quitting can be misleading. Thus, when Gallup grouped them into larger categories, “engagement and culture” was the most significant, accounting for 41% of resignations, followed by “well-being and work-life balance” at 28%.
Together, these two categories represent 69% of the reasons employees left their jobs in 2023, or four times as many compared to those who primarily left for better pay and benefits.
Addressing all these aspects requires strategies for improving employee engagement, which could support work-life balance through flexible work (if possible) and employee well-being through holistic wellness programs. Building a culture around these values will further strengthen employee loyalty and retention, ensuring long-term results.
11) By Gender, 15.6% of Women Leave for Career Reasons, Compared to 21.4% of Men
Work Institute data on reasons for leaving, as reported by self-identified males, females, and non-specified individuals, highlights distinct trends in employee priorities.
Consistent with previous years, women frequently cite career (15.6%), health and family (14.7%), and work-life balance (11.9%) as key factors.
For men, the top reason was their career (21.4%), followed by total rewards (10.8%) and work-life balance (10.7%).
This contrast emphasizes the need for organizations to understand and address the different motivations of their workforce. For example, family-friendly benefits, like parental leave and childcare services, can help women navigate their professional and personal responsibilities.
12) Managers Also Influence Employee Retention
Last year, management emerged in the top five reasons for employee quits for the first time since 2019, indicating a heightened focus on leadership in retention.
Employees are more likely to stay with organizations when they rate their supervisors positively.
Key factors include communication, support, and professional behavior. The latter, which had become a significant concern in 2023, consistently accounts for over 30% of responses, highlighting the importance of respectful and professional conduct from managers.
13) 62% of Employees Look for Work-Life Balance and Greater Well-Being
On the question, “What is attracting U.S. employees to new opportunities?” 62% responded they look for better work-life balance and personal well-being. The second most-cited reason, at 58%, was a significant increase in income and better benefits packages.
Employee retention statistics show similarities between why employees leave a job and what attracts them to opportunities elsewhere. Consequently, employers seeking better retention must focus on understanding and addressing these key factors.
14) 65% of Employees Are Worried About Their Job Security
Almost two-thirds of employees who have experienced a recent layoff express concern about their current roles, compared to only 24% of employees who haven’t.
This anxiety can lead to lower retention by damaging the employer’s brand and affecting the morale of the remaining staff. Furthermore, employees who feel insecure are likely to seek new opportunities. In fact, 71% of those worried about job security plan to look for a new job within the next three months.
15) 41% of Employees Are Experiencing Burnout, Which Threatens Retention
Employee burnout is a significant challenge in the modern workforce. Research shows that 41% of workers feel overwhelmed, which impacts their focus and performance.
Among those experiencing burnout:
- 63% intend to search for new jobs within three months
- 54% are anxious about job security
- 61% would leave if financially able
- 64% face the “Sunday Scaries”
This direct implication on retention makes burnout a focal point in effective retention strategies. Employers must prioritize well-being and create supportive environments to ensure their teams remain engaged and committed.
16) More Employees Plan to Switch Jobs Now Than During the Great Resignation
Although voluntary turnover has decreased after the Great Resignation, the number of employees who plan to switch jobs is higher. A PwC study estimates that a quarter (28%) of employees indicate they are very or extremely likely to switch employers in the next 12 months, marking a significant rise from the 19% recorded in 2022.
Whether or not this happens depends on the actions companies take.
17) Upskilling Is a Deciding Point for Almost Half of Employees Considering a Job Change
We know that makes employees leave. But what makes them stay?
For one, workers value skill-building.
Upskilling has become essential for retention, setting companies apart. Nearly half of employees consider opportunities to learn new skills a crucial factor in their decision to stay with their employer or seek other job options. In fact, those considering a job change in the next year are almost twice as likely to prioritize learning opportunities in this decision.
18) Strong Learning Culture Leads To 57% Better Retention
Another driver of retention is a strong learning culture.
Companies that promote learning and exploration and encourage workers to take on different internal roles enjoy 57% better retention rates, 23% higher internal mobility, and 7% healthier management pipeline than those that invest less in employee development.
19) Employee Recognition Could Increase Retention in 71% Of Employees
Research shows that recognition also plays a significant role in retention.
If recognized more frequently, 71% of employees would be less likely to leave their organizations.
However, the frequency of recognition is also a factor, as the more regular it is, the higher the benefits. Most employees, or 98%, who receive daily recognition feel valued, but only 37% of those recognized yearly do. Weekly or monthly shoutouts are also effective, with 94% and 88% feeling valued when receiving feedback weekly or monthly, respectively.
Employee incentive programs and performance-based rewards for ongoing recognition can be valuable tools to increase loyalty and retention.
20) 54% of Companies with Flexible Working Hours Maintain or Increase Retention
Flexible work is a valued perk for most employees, as 9 in 10 would consider leaving their employer if flexible work isn’t an option.
Employee retention statistics also show that large organizations (5,000+ employees) are less likely to have flexible working hours, which is why they also tend to have the biggest retention drops.
21) Believing In the Company’s Mission Matter to 83% Of Employees
Most employees (83%) say believing in their company’s mission is “important,” while 39% deem it “very important.”
A strong mission statement provides a sense of purpose, allowing teams to connect over a common goal and feel part of something greater. It sets the tone for how workers interact with the business, making them more engaged and less likely to seek other job opportunities.
Employee collaboration tools, which facilitate communication and teamwork, further strengthen this connection, especially for remote workers who might otherwise struggle to feel engaged and connected to their teams.
22) Core Values Are Important For 84% of Employees
Beyond a strong company mission, employees also appreciate core values.
For 84% of the workforce, core values are an essential aspect of working for employers, which means defining them could lead to better retention.
When companies clearly articulate and adhere to their core values, employees better understand the qualities needed for success in their roles. This clarity guides individual behavior and helps workers evaluate whether the workplace aligns with their values and expectations.
Source: Nectar Survey on Turnover and Retention
23) A “Healthy” Workplace Is 3.2 Times More Likely to Retain Employees
A study by People Element found that “healthy” organizations are more than three times as likely to retain employees. They were also:
- 3.2 times more likely to engage their workforce
- 10.8 times more likely to lower absenteeism
- 2.8 times more efficient in adapting to change
- 2.2 times more likely to exceed financial targets
These are the companies that prioritize employee well-being by ensuring that everyone feels heard and supported. They also promote physical and mental wellness, maintain a safe workplace, foster financial equity, and cultivate a positive culture.
24) High Engagement Leads to Higher Retention
Vice versa, when teams experience low engagement, they are 43% likelier to experience high turnover rates.
Companies often use employee monitoring software to gain insights into potential organizational challenges and threats – in this case, disengaged employees, which could lead to high turnover. However, while these tools track metrics like employee activity, engagement goes beyond task completion or active screen time.
So, to gain a deeper understanding, HR teams can turn to employee engagement software, which analyzes data comprehensively, identifies engagement trends, gathers meaningful feedback, and gives insight into employee sentiments.
25) A Written Retention Strategy Could Boost Annual Retention By 15%
When written, a retention strategy could improve annual retention. This document outlines key elements needed for retention and sets clear objectives.
Companies can anticipate at least a 15% annual decrease in turnover until they meet industry benchmarks, followed by 5-10% yearly improvements until they reach a healthy turnover rate.
26) Retention Increases When It’s Part of an HR Strategy
Hive’s State of Employee Retention report reveals that businesses prioritizing talent attraction and retention within their HR strategies see increased retention rates. This targeted approach keeps talent in-house and helps companies build a loyal, committed workforce that drives organizational growth.
The Value of Employee Retention in the Long Run
Employee turnover statistics highlight the need for companies to prioritize retention as a strategic imperative. Otherwise, high turnover will continue to disrupt team dynamics and waste resources.
While competitive salaries certainly help, attracting and retaining top talent now involves much more than financial incentives.
Companies should also consider better benefits packages and employee engagement resources, such as training and mentorship, recognition programs, or any other initiative that could help the workforce feel valued and connected.
In the long run, businesses can position themselves for sustainable success only by viewing retention as an ongoing investment rather than a reactive measure.
Written by Tamara Jovanovska
Content Writer at Shortlister
Sources
- Gallup Indicators: Employee Retention & Attraction
- Work Institute 2024 Retention Report
- Nectar Survey on Turnover and Retention
- 2024 US Mercer Turnover Survey
- PwC: Global Workforce Hopes and Fears Survey 2024
- LinkedIn: Workplace Learning Report 2024
- Nectar Survey on Employee Recognition
- Hive: The State of Employee Retention Report
- People Element: 2024 Employee Engagement Report
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