Employee retention is one of the most pressing issues facing HR departments today. Significant shifts in employees’ expectations about their working life coupled with a fast-paced, technology-driven business world mean that it’s becoming more challenging for organizations to hold on to top talent.
For HR professionals, cultivating a thorough understanding of the scope of the issue, as well as the key factors that drive turnover, is an important step in helping companies to achieve higher employee retention rates. Read on for a helpful roundup of six significant statistics about employee retention and their implications for human resources.
In the US, roughly 3 million employees quit their jobs every month.
Nothing drives home the magnitude of the issue of employee retention quite like this surprising statistic, which is based on data from the US Bureau of Labor Statistics. And it’s important to remember that this figure is for voluntary turnover only. Layoffs and any other kind of involuntary termination aren’t counted here. So with such a high volume of employees walking out the door every month (and likely even more who are thinking about doing so), there’s no question that finding out why it’s happening and taking steps to stop it needs to be one of the human resources department’s top priorities.
31% of employees have quit a new job in the first six months.
In order to properly address the problem of employee retention, human resources departments not only need to know how many workers are quitting their jobs, but when they’re doing so. This statistic, culled from a 2014 survey of 1,000 employees conducted by BambooHR, reveals that almost one-third of new hires are leaving their jobs less than six months after they started, with the main reasons for doing so being an inadequate onboarding experience, insufficient clarity about job responsibilities and expectations, and an unsupportive boss. Fortunately, human resources has the ability to do something about these issues, such as creating more effective onboarding programs and building transparency and trust with new hires.
More than 25% of employees are at high risk for turnover.
Research conducted by Willis Towers Watson shows that more than one-quarter of employees fall into the “high retention risk” category; that is, they self-identify as likely to leave their employer within the next two years. Since many employees in this category are top performers or possess mission-critical skills, it’s particularly important for HR to identify them as high risk and to maintain an open dialogue about the best ways to retain them. Another pertinent statistic from the same study offers a valuable clue: given that 70% of high-retention-risk employees say that they will have to leave their current company if they want to advance their careers, HR needs to take a careful look at what type of training, development, leadership, and advancement opportunities they can offer in order to hold on to top talent.
Support for remote work options reduces employee turnover by 25%.
In addition to providing development opportunities, remote work programs are an important way for companies to hold on to valued employees. A study of remote work in 2017 conducted by Owl Labs with support from TINYpulse revealed that improved employee retention rates are beneficial to organizations that support flexible and remote working arrangements. In addition, these programs offer the further benefit of helping companies to attract and retain excellent employees who might not have otherwise considered the organization, such as those who are prevented from working in an office environment regularly due to a physical condition or life event.
The lack of a pay raise would lead 35% of workers to search for a new job.
A 2014 Glassdoor survey of more than 2,000 US employees revealed that more than one-third of employees would start searching for a new job if they didn’t receive a pay raise within 12 months. This is an important statistic for HR to be aware of because it highlights the fact that even though company culture is gaining more attention as a major retention driver, salary still plays an important role. Therefore, it is a mistake for companies to believe that culture can replace salary parity.
87% of HR leaders believe that improved retention should be a priority.
Organizations that don’t believe employee retention is a big deal may want to rethink their position in view of the fact that the vast majority of HR leaders are calling retention a critical or high priority in the years ahead, according to a national survey of more than 600 HR professionals conducted in 2016 by Kronos Incorporated and Future Workplace. However, these leaders are also aware that they may face an uphill battle in bringing the issue of employee retention to the forefront: 20% of survey respondents stated that their organizations faced too many competing priorities to focus sufficiently on retention. Meanwhile, 19% of HR leaders mentioned that their ability to act strategically and in “big picture” terms was hampered by outdated HR technology. Moreover, 13% to 14% of HR leaders cited a lack of support, commitment, and vision from the C-Suite as another obstacle to improved retention.