Employee Retention Statistics—Who Cares? * Incedo Group

Employee Retention Statistics—Who Cares?

I did a search on the Internet today for employee retention statistics. While I couldn’t find any statistics more recent than 2007, the results were frightening. Pick an industry or pick a geographical location; it doesn’t matter. Turnover rates averaged from 25% to almost 60%. Those are staggering numbers. I don’t know if they included seasonal workers, but even if we halve the turnover numbers these employee retention statistics are very telling.

All companies have people come and go. Certainly employees leave for reasons that have nothing to do with the company…relocation of a spouse or partner, illness, children, getting married, and a host of other reasons. Yet I suspect, in fact I know from my days as a recruiter, that most employee turnover is related to the company. I spent 20+ years as a recruiter, and when employees left it was rarely due to non-company-related issues or even money. Limited opportunities for growth, poor or ineffective leadership, feeling undervalued; these and other reasons caused people to seek opportunities outside their company. Why should you care about employee retention statistics when employees are going to leave regardless?

Because turnover is costly. Even if you don’t use a recruiter, there are costs for advertising, management time to interview, overtime hours or a consultant to cover the workload, and it’s likely you’ll have to pay more for the new hire than you were paying the person who left. And those are just the costs you can quantify. Add all this up and the cost to replace an employee can be 1½ times their salary. For a $50,000 employee that’s $75,000 and those are the costs we can quantify! Consider costs you can’t quantify, such as employee morale, customer dissatisfaction, quality control issues, projects that get delayed and lost productivity while the new employee is learning the ropes.

Employee retention statistics tell you a lot if you are willing to look. High turnover in a single department tells you something different than if you have high turnover company-wide. There could be any number of factors contributing to the turnover, and these could be singular in nature or in combination with others. On the flip side, maybe your turnover rate is very low. What does that tell you? Ignoring your employee retention statistics or the factors that impacted the statistics is easy. But I encourage you to take the time to examine your turnover and determine what’s working and what’s not. Nothing stabilizes your business more than quality staff who stay with your company.