Employee retention statistics: Everything you need to know

Employee retention statistics help you understand how happy your team is and how well your business is doing financially.

If many employees are quitting, it’s a clear signal that something is wrong. Plus, replacing them can be costly – you’ll need to invest in hiring, training, and dealing with productivity losses while new hires get up to speed.

Keep reading to discover the reasons behind employee turnover. We’ll dive into key stats and practical tips to prevent employee turnover using a data-driven approach.

How we researched this topic

To compile the latest data on employee retention, we consulted the Bureau of Labor and Statistics, trusted HR sources, and other statisticians. 

Key takeaways 

• Employee retention statistics can indicate the happiness of your team and the financial health of your business. 

• A healthy attrition rate is considered to be 20%, but this can vary widely based on industry, sector, and other economic factors.

• Solidifying your onboarding plan, promoting flexible working, using pre-employment testing, and intervening with those who are planning to leave can all improve your employee retention statistics. 

Top 7 employee retention statistics

Let’s explore the most important employee retention statistics for 2024 and what they could mean for your business. 

1. 1 in 2 employees are open to leaving their employer

51% of employees admit they’re actively looking for new roles. That means half of your workforce could be gone in the next 6 months – leaving you in a serious pinch.

This figure is based on those who admitted they were open to leaving their employer. There may be more who are thinking about quitting but aren’t willing to admit it, making it even more crucial to focus on creating a workplace where employees feel motivated to stay. 

2. Current median tenure is 3.9 years

Median tenure is a better indicator of role longevity than average tenure since outliers (e.g., people who have stayed in the same role for 20 years) don’t skew it.

At 3.9 years, the current median tenure tells us that most employees aren’t sticking around for the long haul. This could reflect a dynamic job market or show that candidates are focused on climbing the career ladder. However, it could also indicate that workers aren’t finding enough reasons to stay with their current employers. 

3. Older workers have a 255.56% higher average tenure than younger workers

Employees aged 55 to 64 tend to stay in their jobs for an average of 9.6 years, while employees aged 25 to 34 remain for an average of 2.7 years. 

That’s 255.56% higher for older employees, showing a significant gap in how different age groups view their careers. While older workers may value stability and long-term commitment, younger employees are often more focused on career growth and new experiences.

This difference in how different generations approach work is reflected in the data for the average tenure of various sectors. The public sector, which has been found to have a higher percentage of employees 35 and over, has a median tenure of 6.2 years. This is nearly twice the median for private-sector employees, coming in at 3.5 years. 

4. Lack of engagement and culture is the most common reason for quitting

It’s a common misconception that most workers leave their current employer for more pay or promotion opportunities. 41% of today’s workers cite a lack of engagement and culture as their reason for leaving their current employer. (Following this, work-life balance and well-being are cited by 28% of workers, pay by 16%, and company leaders and managers by 12%.)

This shows how essential it is to build a workplace where employees feel connected and engaged. Without a sense of belonging or an inspiring environment, even great pay and perks won’t retain them.

5. 42% of employee turnover is preventable

In a July 2024 survey, 42% of workers told Gallup they believed their employer could have prevented them from quitting but didn’t address their concerns in time.

This statistic is both sobering and hopeful. It shows that, with the right actions, employers could prevent nearly half of employee departures. Whether it’s better communication, clearer career paths, or simply listening to employee feedback, there are opportunities to make a real difference before someone decides to leave.

6. 33% of new employees quit after 6 months

A staggering one-third of new employees choose to leave within their first six months, often due to poor induction processes, broken promises, or mismatched expectations. That’s a huge investment of time and resources walking right out the door, costing businesses financially and culturally. 

7. The average time to hire is now 44 days

Up from 43 days in 2023, the average time to hire is now 44 days, costing employers time and effort to replace workers. Every extra day it takes to fill a role means teams are stretched thinner, leading to productivity dips and additional pressure on the remaining team.

The state of employee retention in 2024

Overall, employee retention statistics paint a worrying picture for recruiters and employers in 2024. With half the workforce open to new opportunities, increasing turnover rates, and a rising average time to hire, the pressure is on to create workplaces where employees want to stay.

A healthy attrition rate is generally considered to be 20%, with the average voluntary turnover rate coming in at 13%. This figure is skewed by high-performing employees, who account for 47% of this statistic. This means nearly half of the employees choosing to leave are the ones you can least afford to lose. 

Some industries may also experience higher turnover than others. For example, in tech, mass layoffs and the highly competitive job market mean attrition is around 60% in 2024. Equally, manufacturing, retail, and nursing home healthcare also experience higher than average turnover rates, coming in at 28.6%, 32.9%, and 53.3%, respectively. 

Additionally, the split between on-site workers and those who can work remotely plays a significant role in retention trends. On-site workers face challenges like rigid schedules, limited flexibility, long shifts, and physical demands – resulting in burnout and high turnover rates. In contrast, employees with access to remote or hybrid work arrangements report higher job satisfaction and greater work-life balance, leading to a 25% lower turnover rate. 

Why employee retention matters

Employee retention is a crucial workplace statistic that directly impacts productivity, morale, and the cost of operations. Keeping this statistic high leads to happy teams and a healthy bottom line. 

Happy teams are created when employees feel valued, supported, and connected to their work. People who stay in their roles longer build stronger relationships with colleagues, develop deeper expertise, and contribute to a positive workplace culture. This stability fosters collaboration, reduces workplace stress, and boosts overall morale.

On the other hand, a healthy bottom line is created when you get the maximum return on investment (ROI) from the cost of recruitment. Retaining talent means less spending on recruiting, onboarding, and training new hires, leaving more money in your budget to reinvest into the company or enhance employee benefits. 

That said, there’s no way to get your employee attrition rate to zero. People will always want to move on to seek more responsibilities, enter new industries, or even for a change of pace or a fresh start. However, taking the right steps can significantly reduce unnecessary turnover and ensure that when employees do leave, it’s for the right reasons – not because they feel undervalued, unsupported, or burnt out. 

The cost of employee turnover

The average cost of employee turnover in 2024 is reported as $36,295 per employee. This is calculated through a combination of recruitment costs, lost productivity, and the time spent onboarding and training. However, some workplaces cite that this cost can go as high as $100,000 depending on the job being recruited for, especially for senior or specialized roles. 

If we consider the fact that 3.071 million US workers quit their jobs in September 2024 alone, that puts the total cost of employee turnover in the US at $111.5 billion in one month. Whatever the size of your business, that’s enough to make any HR professional or business leader sit up and take notice.

4 strategies for improving employee retention

If you’re struggling to retain your carefully crafted teams, try using these four data-backed strategies for reducing attrition:

1. Address concerns early

42% of people say they could have been prevented from leaving if their employer had intervened. Regular check-ins, informal catch-ups, and a safe space for honest feedback can help you spot and address issues before they become reasons to leave. 

Pro tip: A great, casual way to do this is to ask, “If we could wave a magic wand, what would need to change at the company to make it a great workplace in your eyes?” Employees may not always have reasonable demands, but their answers can give you an insight into what’s bothering them and may be easy to resolve. 

2. Solidify your onboarding plan

33% of US employees leave a role within their first six months, proving that first impressions count. A solid onboarding plan can make all the difference.

A great onboarding plan is one tailored to your new candidate. Talk to your new hires to understand what support they need, if there are any gaps in their knowledge, and their expectations for the role. Equally, take time to speak to new colleagues to gain feedback on their onboarding process and identify areas for improvement. 

Use this information to create a bespoke onboarding plan for your new employee. It should cover all the basics. For example:

• The location of the washrooms

• Where colleagues can make tea and coffee

• Location of fire escapes

• Colleagues with first aid training

It should also include job-specific information. For example:

• Log-in details 

• An introduction to key systems they’ll be using

• Coffee catch-ups with key stakeholders

• A clear outline of responsibilities

• Time to read the company policies

• Whatever else your current employees suggest

Creating your onboarding plan around first-hand employee feedback ensures it’s as effective and up-to-date as possible. 

3. Promote flexible working wherever possible

Flexible working allows your team to balance their work and personal commitments, making it easier for them to live full, happy lives. This satisfaction, in turn, makes them more likely to stick with your company for the long haul.

You might consider offering compressed hours, reduced hours, a four-day work week, or the ability to work remotely, either part-time or full-time.

Also, encourage your workers to ask questions and share what flexibility looks like for their unique situation. Be open to their ideas and try to make them work for your business.

4. Strengthen your recruitment process with a skills-based approach

Hiring the right person from the get-go is the best way to reduce employee turnover. 

As we’ve covered, 33% of people leave within six months. Of those individuals, 30% leave within the first 90 days. Equally, two-thirds of today’s employees are considering leaving a job because their employer’s values don’t match theirs. 

We recommend using a skills-based approach to ensure the person you hire has the abilities and attributes to do the job. 

Pre-employment talent assessments, like TestGorilla’s, are the perfect way to implement a skills-based approach. They offer insight into a candidate’s technical skills, cognitive abilities, motivation, personality, and more by evaluating how they’d handle real-world situations. Candidate answers are marked against a set of pre-determined criteria, letting you know how well they meet the requirements of the role and how they stack up against other applicants. 

Level up your hiring process with talent assessments

Your employee retention rate reveals valuable insights into team satisfaction, hiring strategies, and your business’s fiscal health. Without the right tools, attracting and retaining top talent can feel like a guessing game.

But having a good idea of the data and current average turnover statistics can help you make smarter, more informed hiring decisions. While you can’t completely stop people from moving on, you can use strategies like encouraging flexible working, solidifying your onboarding plan, and using a skills-based hiring approach to boost retention and improve your recruitment ROI. 

TestGorilla offers more than 400+ tests to help you understand whether a candidate is the right fit for your team. Start your free trial today to see the difference TestGorilla can make in your hiring process. 

FAQs

What’s a good employee retention rate?

80% is generally considered to be a fair employee retention rate. This means you will lose two employees out of 10 every year.

How do I calculate staff retention rate?

Staff retention rate is calculated by dividing the number of employees who stayed with your company during a specific period by the total number of employees at the start of that period, then multiplying by 100. 

For example, if you have 150 people in your company and 38 left this year, you would divide (150-38) by 150, then multiply by 100. This gives you a retention rate of 74.66%

What industry has the highest turnover?

The technology, healthcare, and retail industries tend to have the highest turnover rate, with attrition rates of around 60%, 53.3%, and 32.9%, respectively.