2024 Employee Retention Statistics Inform How to Retain Top Talent

Written by Pat Brothwell | October 27, 2023

Engaging Your New Talent Right Away is Crucial

According to a study, employers have 44 days to engage their new hires and ensure they stick around. 44% of new employees have regrets or second thoughts about their new gig within the first week, with 23% saying they were driven to tears second-guessing their decision.

A bad onboarding experience was often the culprit for these regrets. 65% said there needed to be more clarity about who could answer their first-week questions, 62% reported inadequate training on company products or services, and 51% had intrusive technology issues.

Employee onboarding is “the process of integrating a new employee with a company and its culture, as well as getting a new hire the tools and information needed to become a productive member of the team,” is an integral part of the employee experience. It comprises compliance issues, administrative work, training, and getting candidates excited about their new role. We’ve created a Guide to Employee Onboarding to ensure your strategy is solid.

These stats should concern employees and HR practitioners. Employee retention is costly—poor employee retention costs organizations trillions of dollars annually—for organizations across industries. 93% of organizations are concerned about their retention.

The Cost of Employee Turnover

Turnover costs organizations trillions of dollars every year.

It costs 33% of an employee’s salary to replace them. Turnover costs include a drop in productivity as well as the costs associated with recruiting, hiring, and onboarding.

SHRM finds up to 20% of worker turnover happens during the first 45 days of employment.
CareerBuilder found that organizations lose an average of $14,000 per hire that leaves during their first year.

Additionally, both productivity and company morale take hits when employees turn over (especially when many employees turnover in quick succession). Creating and executing a strong retention strategy is vital to businesses and the HR platforms that serve them.

As leaders in the employee hiring and retention space, we’ve compiled this collection of employee retention statistics so that employers and HR tech providers can make data-driven decisions regarding strengthening employee retention efforts.

The Current State of Employee Retention

In 2023, the average employee turnover rate in the U.S. was 3.8%—2.5% of that turnover is attributed to quitting, while 1% is layoffs and firings. In this section, we’ll cover additional, timely data and stats that paint a picture of the current state of employee retention.

Employees used to try and find a job that they’d stay at for years, but that’s changed over time. The average tenure of an employee is 4.1 years, and 75% of employees don’t expect to stay in a role for more than 5 years. Older employees have longer average tenures than younger employees, while men have a longer average tenure than women.
Backing up the stat we opened this piece with, 38% of employees quit jobs within the first year of employment, and 40% of those who leave within that first year do so in the first 90 days. Lack of career development opportunities, job characteristics they didn’t like, and poor work-life balance were the most cited reasons for leaving a role within that first year.
Employees are more confident than ever, which, unfortunately for employers, won’t do much to ease retention concerns. 52% job seekers believe they have the upper hand in the job market, one-third of job seekers are “very confident” they can score an equally good or better job than they currently have, and 78% of employees believe jumping roles will get them better pay.
It bears repeating that 93% of organizations are concerned about employee retention, with some studies finding that on the HR side, companies are now more concerned about retention than hiring.

Ways to Prevent Employee Churn

Retention data and stats can help organizations combat turnover. For example, 63% of employees who quit their jobs say a lack of career advancement was the primary reason for leaving. Employers and the HR platforms that serve them can create actionable paths for new hires that are advertised in job posts and discussed during the interview process to help improve retention from the get-go.

In this section, we’ll share retention stats that can help present employee churn.

Ensuring employees are engaged at work—and during the hiring and onboarding process—is crucial. Employees are three times more likely to explore new options if they don’t feel supported and companies with low engagement lose an average of 31% of their employees (just putting here that companies with an engaged workforce are also 21% more profitable!).
Employees also want recognition for a job well done. Employees who feel valued are 34% less likely to leave their jobs within the next year.
Being open to feedback helps retention too. 60% of U.S. employees value the ability to give feedback.
A strong company culture is also important to employees. 77% of prospective employees survey company culture before applying for a job. Ensuring you have a strong company culture can both attract and retain top talent.
Unsurprisingly, retention often comes down to compensation. Payscale, LinkedIn, Glassdoor, and Indeed all report compensation is the main reason behind turnover. 44% of employees would quit to take a better-paid job without thinking twice, while 39% of HR leaders say offering competitive salaries is a big challenge.

As we’ve already indicated, offering stellar onboarding is one of the best ways to increase your retention. Following a negative onboarding experience, 20% of new hires decide they wouldn’t recommend their new company to friends, Bad onboarding also doubles the chances of a new hire looking for a new job. Strengthening onboarding is such a crucial part of a good employee retention strategy, that we’re giving it its own section.

The Power of Employee Onboarding

Despite the importance of onboarding, 88% of companies admit they don’t onboard well.

Good onboarding increases employee retention by 82% and new hire retention specifically by 52%.
Organizations with effective employee onboarding have an average of 33% higher employee engagement, and as we’ve previously learned, higher engagement correlates to higher retention—engaged new hires feel 18x more committed to their employer!
90% of employees decided to stay or go within their first six months. Gallup finds that worker productivity reaches its peak after one year of employment.

Automating onboarding tasks resulted in a 16% increase in retention rates for new hires and an 18% improvement in initial performance. Yet, only 50% of companies want to increase their investment in onboarding tech. Employers can make themselves more competitive by investing in automated onboarding, while organizations that serve HR solutions to employers can make themselves more competitive by offering automated onboarding solutions.

More Onboarding and Retention Resources

About HiringThing

HiringThing is a modern recruiting and employee onboarding platform as a service that creates seamless talent experiences. Our white label solutions and open API enable HR technology and service providers to offer hiring and onboarding to their clients. Approachable and adaptable, the Hiringthing HR platform empowers anyone, anywhere to build their dream team

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