CAREER & HIRING ADVICE

What if the biggest threat to your business is not your competition, not the economy, but the person sitting two desks away who is quietly updating their resume? Right now, 51% of U.S. employees are either actively searching for or watching for new job opportunities. That is 1 in 2 workers on your payroll already mentally moving on.

This guide gives you 33 of the latest employee retention statistics, what they actually mean, and what you can do about them before the talent walks out the door.

What is employee retention?

Employee retention is an organization’s ability to keep its employees over time. A healthy retention rate sits at 90% or above, meaning a turnover rate of 10% or less. Most companies are nowhere close, and the cost of that gap is enormous.

Why employee retention is important

Low employee retention can be particularly costly and detrimental to businesses in industries where specialised skills are essential, such as information technology, hospitality, and manufacturing.

Think about it when an employee leaves a company, it takes a considerable chunk of time to deal with their departure. In fact, entry-level employees typically cost 50% of their salary to replace.

Employee retention also helps boost morale, reduces costs, maintains a good customer experience, and reduces overall costs, maintains a good customer experience, and ensures employees feel valued through comprehensive employee benefits, all of which contribute to lower turnover and improved organizational stability.

Beyond benefits and career development, operational trust also plays a role in employee retention. Employees are more likely to stay when compensation is handled transparently and payroll records are clear, consistent, and easy to understand.

Accurate pay stubs help employees see how their earnings, deductions, and net pay are calculated, reducing confusion and disputes around compensation.

For small businesses or teams without complex payroll systems, tools like PayStub Master can support this process by generating standardised pay stubs that align with payroll records, helping reinforce trust and professionalism in day-to-day employee management.

The best way to retain employees is by making them feel valued and providing them the opportunity for growth within your organization.

Partnering with a corporate training company can be an effective solution, offering structured learning paths and development programs that help employees grow their skills and stay engaged. When an employee does not feel valued at work, 76% look for another job opportunity

A workplace survey report found that 94% of surveyed employees responded that if a company invested in helping them learn, they would stay longer.

This can be done through training programs or mentoring opportunities that will help develop skillsets in new areas.

It’s important to make sure you are offering these types of opportunities so they feel like they have something to look forward to. If not, then there may come a point where they leave because they don’t see any future for themselves at your business.

There are various types of staff turnover. Voluntary turnover happens when an individual leaves their job for personal reasons. On the other hand, involuntary turnover occurs when a company decides for an individual to leave employment.

Retirement turnover signifies the conclusion of an individual’s working life, while transfer turnover involves changing employment by moving to another department within the same organization. Each type of turnover reflects distinct factors influencing the employment transition.

What Is the Current Employee Retention Rate in the U.S.?

The average voluntary turnover rate in the U.S. now sits at 13.5%, according to Mercer’s 2025 Workforce Turnover Survey. That is a meaningful drop from 17.3% in 2023 and 24.7% in 2022, signaling that post-pandemic volatility is cooling. However, the improvement is uneven across industries, and warning signs for 2026 are already emerging.

The Eagle Hill Employee Retention Index closed 2025 at 105.0, up substantially from 98.5 at the start of the year, but the Job Market Opportunity sub-indicator fell 2.3 points in Q4, suggesting workers are anchoring to their current roles out of necessity as the external labor market softens, not purely out of satisfaction.

Total separations across all U.S. employers tracked by the Bureau of Labor Statistics JOLTS report reached 5.3 million in December 2025, with quits holding steady at 3.2 million for the month. That is millions of people voluntarily choosing to leave their employers every single month, regardless of the improved headline rate.

It costs an employer an average of 33% of an employee’s yearly salary for their exit.

The cost of replacing employees is high. So, before making rigorous decisions employers should screen and assess with the help of the right tools on their current roles and responsibilities.

On the other hand, the process of finding the best talent typically involves advertising job postings, recruitment agencies, screening, interviews, and hiring.

This adds up to spending a lot of time, money, and energy to replace workers that could have been retained with a good employee retention strategy.

The 33 Employee Retention Statistics You Need to Know

The State of the Workforce

1. 51% of employees are watching for or actively seeking a new job.

According to Gallup’s Employee Retention and Attraction Indicator, more than half of the U.S. workforce is open to leaving their current employer as of November 2024. This figure has climbed from 44% in March 2020, meaning the restlessness in today’s workforce is higher than it was at the start of the pandemic.

2. 42% of all employee turnover is preventable.

Paycor research and the Work Institute both confirm that nearly half of employees who leave believe their employer or manager could have done something to keep them. That is an enormous window for intervention that most companies are not using.

3. One in three new hires quits within the first six months. According to data from

Select Software Reviews, 31% of employees leave their jobs in less than six months from their hire date. Poor onboarding, unclear job expectations, and cultural mismatches are the most cited reasons.

4. 29% of employees quit within the first 90 days.

Nectar HR’s survey of 1,000 U.S. employees found that nearly one-third quit a job within three months of starting. Companies have an average of just 44 days to convince new hires the role was the right choice, according to BambooHR data reported by SSR.

5. 70% of new employees decide whether a job is the right fit within the first month.

BambooHR data shows that first impressions happen fast, including 29% who make up their mind within the first week. Nearly half of new hires report having regrets about accepting their offer within their first week on the job.

6. 4% of full-time employees have been planning to quit in 2025 for over a year.

eLearning Industry research found that a quiet but significant group of employees have been counting down the days for an extended period. These are not impulsive departures. They are calculated exits that most managers never see coming.

7. 2024 ended with 39.2 million total quits in the U.S.

While this is well below the 50.5 million quit peak of 2022, BLS data cited by eLearning Industry confirms that resignation levels remain historically elevated compared to pre-2020 baselines of 40.3 million in 2018 and 44.1 million in 2019.

The True Cost of Turnover

8. Replacing an employee costs 33% to 200% of their annual salary.

The range depends on seniority and specialization. Entry-level workers cost roughly 50% of their salary to replace. Mid-level managers and technical specialists can cost 100% to 200%. For a manager earning $60,000 per year, that means up to $120,000 in total replacement costs per departure.

9. U.S. companies spend close to $900 billion annually replacing employees who quit.

The Work Institute’s Retention Report puts a staggering dollar figure on the problem. That is not a rounding error. It is equivalent to the annual GDP of several mid-size countries, swallowed up by hiring fees, onboarding time, productivity loss, and management bandwidth.

10. The replacement cost for one median-salary employee is $16,500.

The Work Institute calculates that replacing an employee earning $50,000 per year costs $16,500 on average. When multiplied across an organization with 20% annual turnover and 500 employees, the total annual cost exceeds $1.6 million.

11. It takes up to two years for a new hire to match the productivity of the person they replaced.

A report shows that productivity ramp time for replacements can extend 18 to 24 months for complex roles. This hidden cost rarely appears in turnover calculations but represents one of the most significant financial drains of high attrition.

12. Organizations lose $2.9 trillion annually to voluntary turnover worldwide.

This puts the global cost of turnover in the trillions when accounting for lost productivity, knowledge transfer gaps, and recruitment investment. This figure illustrates why retention is not merely an HR issue but a macroeconomic one.

Engagement, Culture, and Why People Leave

13. 68% of employees who left in 2024 cited engagement, culture, or work-life balance.

Gallup’s global data shows that culture and engagement reasons for leaving outnumber compensation reasons by four to one. Compensation matters, but it is rarely the root cause of departures.

14. 56% of employees say workplace culture is a deciding factor in whether they stay.

Glassdoor data shows that more than half of workers view culture as a make-or-break factor. This is not about perks. It is about how people are treated, whether communication is honest, and whether leadership is trustworthy.

15. 71% of voluntary turnover is caused by poor management.

Survey’s attributes nearly three-quarters of voluntary departures to management quality, not pay, workload, or benefits. Great managers, on the other hand, reduce departure likelihood by 40%.

16. 76% of employees who do not feel valued look for another job.

When recognition is absent, job searching begins. This statistic underscores that retention is not primarily a compensation problem. It is an acknowledgment problem that most managers can solve without budget approval.

17. Employees who feel valued are 63% less likely to look for a new job.

Gallup data confirms that the relationship between recognition and retention is direct and measurable. Feeling valued is not a soft concept. It is a quantifiable retention lever.

18. There is a 16% decrease in retention rates when employees cannot give upward feedback.

TinyPulse research found that when employees feel unable to share honest feedback with leadership, they disengage and eventually leave at significantly higher rates. Psychological safety and two-way communication are structural retention tools, not optional culture upgrades.

19. Only 28% of employees would recommend their organization as a great place to work.

According to Gallup, nearly three-quarters of workers do not consider their employer outstanding. Poor employer perception does not just hurt retention. It poisons future recruiting pipelines.

20. 43% of employees would leave their jobs if they did not need the money.

Nectar HR’s survey found that nearly half of workers would exit immediately if financial pressure were removed. This is a sobering signal about how many employees stay out of necessity rather than genuine engagement or purpose.

Career Development and Learning

21. 94% of employees would stay longer if their employer invested in their learning.

This figure, consistently cited across multiple workforce surveys, is the most actionable statistic in this list. Career development is not a nice-to-have. It is a retention strategy with direct, measurable ROI.

22. 93% of employees say they are more likely to stay with an organization that invests in career development.

LinkedIn Learning data cited by Thirst confirms that the link between learning investment and loyalty is nearly universal. Organizations that make growth visible and accessible retain people significantly longer.

23. 74% of Millennial and Gen Z employees would leave if not given enough skills development opportunities.

An Amazon and Workplace Intelligence survey reported by Inspirus found that younger workers treat professional development as non-negotiable. Back in 2021, a separate study found 70% would consider leaving for an organization that invests in career growth. The trend has intensified, not softened.

24. 40% of employees leave due to inadequate training.

Skill gaps that go unaddressed do not just hurt performance. They signal to employees that the organization does not believe in their future. When people stop growing, they start leaving.

25. Multi-generational workplaces with tailored retention strategies show 34% lower turnover.

PwC Future of Work Survey data cited by Second Talent confirms that one-size-fits-all retention programs significantly underperform. Employees at different career stages and generations have different needs, and organizations that recognize this retain people at far higher rates.

Onboarding and First-Year Retention

26. A strong onboarding program leads to 69% of employees staying at least three years.

Data confirms that structured, thorough onboarding dramatically extends tenure. The manager’s involvement in onboarding is a critical variable. A CareerBuilder and Silkroad survey found 37% of employees said their manager was not part of their onboarding experience.

27. 9% of employees left their company specifically because of a poor onboarding experience.

The same CareerBuilder and Silkroad survey found that nearly 1 in 10 departures traces directly to the onboarding process. This is one of the most preventable categories of turnover, requiring process improvement rather than budget.

Remote Work, Flexibility, and Retention

28. Fully remote workers have a 94.2% retention rate versus 81.6% for fully office-based employees.

A recent survey shows a 12.6-point retention gap between remote and in-office workers. This is not a marginal difference. It is one of the largest single-variable gaps in current retention research.

29. Companies with strong remote work policies have 25% lower turnover.

PwC data confirms that schedule flexibility is now a structural retention advantage. Organizations that demand full-time in-office work without compelling justification are voluntarily accepting higher turnover costs.

30. 68% of remote employees say flexibility is a key reason they stay with their company.

Gartner data shows that for employees who have experienced remote work, flexibility has become a baseline expectation rather than a premium benefit. Removing it triggers job searches in a majority of affected workers.

Engagement, Recognition, and Performance

31. Highly engaged employees show 84% retention rates.

Research found that organizations with strong engagement programs achieve 59% lower turnover overall. Engagement is not a mood metric. It is a retention predictor with a direct financial impact.

32. Companies with high retention rates see a 22% increase in overall profitability.

LinkedIn Learning data confirms that retention is a financial performance lever, not just a cost containment measure. Lower turnover reduces overhead while simultaneously increasing the output and institutional knowledge of the workforce.

33. Employees who feel aligned with company values are 41% less likely to leave.

SHRM data shows that purpose and values alignment is one of the most powerful long-term retention forces. In an era when younger workers especially seek mission-aligned organizations, culture coherence is a durable competitive advantage.

Regular and honest communication enhances employee retention by showing employees that their contribution is valued. As a leader, it also helps you recognize when adjustments may be needed in your employee retention strategy.

If you’re looking at your own employee retention numbers, it might help to know what those three things are. If the IT onboarding process is not addressed, then you can expect more turnover — which means less productivity and higher costs.

Why Is Employee Retention So Important for Business?

High turnover does not just cost money. It creates a compounding disadvantage that affects every corner of an organization. When experienced people leave, institutional knowledge leaves with them. Customer relationships weaken. Team morale drops. Productivity dips during the months it takes to hire, onboard, and ramp a replacement.

Beyond the financial cost, retention is directly linked to culture. Organizations with high turnover often struggle to build cohesion, execute long-term strategy, or maintain service quality.

Conversely, companies that retain talent benefit from muscle memory baked into their teams, leaders who understand the business deeply, and a reputation that attracts more top talent organically. Companies with comprehensive retention strategies achieve 87% higher employee retention rates and 67% lower recruitment costs, according to SHRM Employee Job Satisfaction data.

What Are the Top Reasons Employees Leave Their Jobs?

The data challenges many common HR assumptions. Gallup’s 2024 retention data shows that engagement and culture account for 37% of departure reasons, while wellbeing and work-life balance account for another 31%. Pay and benefits, the factor most managers assume drives turnover, account for only 11%.

The top reasons employees leave, ranked by frequency: poor workplace culture and engagement, inadequate work-life balance, lack of career development opportunities, ineffective or unsupportive management, and then compensation and benefits.

Notably, Benepass research found a significant mismatch: 28% of employees cite compensation as a top reason for leaving, but only 15% of HR leaders acknowledge it, suggesting HR teams are simultaneously underestimating pay concerns while overestimating their cultural health.

What Industry Has the Worst Employee Retention Rate?

Based on Bureau of Labor Statistics data and Mercer’s 2025 survey, retail and wholesale industries have the highest voluntary turnover at approximately 24.9%. Arts, entertainment, recreation, accommodation, and food services consistently show the highest total separation rates year over year.

Government roles have the lowest turnover, with a quit rate of just 0.8% as of March 2024. Finance, insurance, and manufacturing also post significantly below-average turnover compared to service-heavy industries.

Retention Rate by Industry (2024 2025 Reference)

How Do You Calculate Your Employee Retention Rate?

The retention rate formula is simple. Take the number of employees who stayed for the entire measurement period, divide by the number of employees at the start of that period, and multiply by 100.

Retention Rate = (Employees at End of Period / Employees at Start of Period) x 100

For example, if you started the year with 200 employees and ended with 180, your retention rate is 90%. Anything below 90% warrants a closer look at your culture, management practices, and compensation benchmarks.

How Much Does Employee Turnover Actually Cost?

Here is a number that tends to focus executive attention: U.S. companies collectively spend close to $900 billion replacing employees who quit each year. At the individual level, the Work Institute calculates a replacement cost of $16,500 for an employee earning a median salary of $50,000 per year. Entry-level workers cost roughly 50% of their salary to replace. Mid-level and specialized roles can cost 100 to 200%.

These figures include direct costs like recruiting fees, job advertising, onboarding time, and training. They do not fully capture indirect costs: reduced team productivity during the vacancy, lost client relationships, and the management bandwidth consumed by constant turnover.

What Is the Difference Between Retention Rate and Turnover Rate?

These terms are often confused, and the distinction matters when benchmarking your organization.

The retention rate measures the percentage of employees who stay at your organization over a given period. It focuses on continuity and loyalty.

The turnover rate measures the percentage of employees who leave during a given period. It can be broken into voluntary turnover (employees who chose to leave), involuntary turnover (layoffs and terminations), retirement, and transfers. A healthy organization targets a turnover rate of 10% or less, which translates to a retention rate of 90% or higher.

What Are the Most Effective Employee Retention Strategies?

The data points to a clear set of high-impact actions that actually move retention numbers.

Invest in career development. With 94% of employees saying they would stay longer if their employer invested in their learning, professional development is the single highest-ROI retention tool available. Structured learning paths, mentorship programs, and tuition support all signal that the company believes in the employee’s future.

Fix onboarding before you lose the first-year cohort. One in three employees leaves within six months. A structured onboarding program that includes manager involvement, clear expectations, and early wins can extend tenure dramatically.

Create channels for upward feedback. Create channels for upward feedback. Organizations where employees feel safe sharing feedback with leadership retain people at 16% higher rates. Regular pulse surveys, anonymous feedback tools, and open-door management cultures are practical implementations. Tools like Eletive help organizations implement continuous pulse surveys and structured feedback loops that directly support these retention goals.

Make recognition frequent and specific. Employees who feel unrecognized are significantly more likely to be interviewing with competitors. Recognition does not have to be expensive. Timely, specific, and genuine acknowledgment costs nothing and pays significant retention dividends.

Offer schedule flexibility. Companies with flexible work arrangements see 25% lower turnover. With fully remote workers posting a 94.2% retention rate versus 81.6% for in-office workers, schedule and location rigidity has become a retention liability measured in double-digit percentage points.

Benchmark compensation regularly. While pay is not the top driver of departures, compensation gaps create an opening for competitors. Regular benchmarking against industry data ensures your pay structure does not become the easy justification for an employee who was already considering leaving for other reasons.

Invest in manager quality. Since 71% of voluntary turnover traces back to poor management, manager development programs and regular skip-level check-ins have an outsized impact on retention outcomes. Great managers who are trained, supported, and held accountable reduce departure likelihood by 40%.

Employee Retention Rate by Industry (2025): Latest BLS Data

The table below is built directly from the U.S. Bureau of Labor Statistics JOLTS Table 4, the most authoritative source for U.S. labor turnover data. Quit rates are the August 2025 seasonally adjusted figures (the most recent available), expressed as a monthly percentage of total employment.

The estimated annual quit rate multiplies the monthly rate by 12 as a directional benchmark. Retention rate is calculated as 100 minus the estimated annual quit rate. Note that total separations (which include layoffs and involuntary departures) are higher than quit rates alone; these figures reflect voluntary quits only.

Employee Retention Rate by Industry (BLS JOLTS, August 2025)

Total Private Sector Average | 2.1% monthly | ~25% annually | ~75% retention

Total All Industries (incl. Government) | 1.9% monthly | ~23% annually | ~77% retention

Key Takeaways from the BLS Data

Government remains the most stable employer. Federal, state, and local government roles consistently post the lowest quit rates in the entire economy. The federal quit rate held at 0.6% monthly in August 2025, translating to roughly 7% annual voluntary turnover and a ~93% retention rate.

Finance and insurance outperforms most private sectors. With a monthly quit rate of just 1.2%, finance and insurance workers leave at roughly one-third the rate of leisure and hospitality workers. This industry consistently appears near the top of private-sector retention rankings.

Accommodation and food services leads all industries in turnover. A monthly quit rate of 3.7% in August 2025 translates to an estimated 44% annual voluntary quit rate, meaning more than four out of ten workers in this sector voluntarily leave each year on a rolling basis. Even with a sharp -0.9 improvement from July, this sector remains the most volatile in the U.S. labor market.

Health care is a growing concern. Health care and social assistance posted a +0.3 month-over-month increase in August 2025, bucking the improving trend seen across most other sectors. With an aging population driving demand and burnout remaining a persistent issue, healthcare retention deserves elevated attention from HR leaders.

Arts and entertainment showed the sharpest single-month improvement. A -0.9 drop in the quit rate from July to August 2025 in arts, entertainment, and recreation is the largest positive single-month shift in the dataset, though the sector remains volatile and the monthly figure can swing significantly.

Manufacturing holds steady as a mid-tier performer. Total manufacturing sits at a 1.4% monthly quit rate, well below the private sector average of 2.1%, reflecting the structured compensation, benefits, and union representation common in the sector.

What is the difference between retention rate and turnover rate?

Retention rate is the percentage of a company’s customers that remain with them for a set period of time. Turnover rate is measuring the percentage of employees that leave in a given period.  

The two are not directly related, but they can be used to calculate how long it will take your business to reach its target market size.

Quick Q&A: Employee Retention Statistics

Q: What is a good employee retention rate? A: A retention rate of 90% or higher is generally considered good, meaning your annual turnover rate is 10% or less.

Q: How much does it cost to replace an employee? A: Estimates range from 33% to 200% of the employee’s annual salary depending on seniority. For a $50,000 salary, that means $16,500 to $100,000 in replacement costs.

Q: What is the number one reason employees leave their jobs? A: According to Gallup’s 2024 data, poor engagement and workplace culture is the leading driver of departures, accounting for 37% of the reasons employees cite for leaving, well ahead of pay.

Q: Is employee turnover getting better or worse in 2025? A: The voluntary turnover rate dropped from a peak of 24.7% in 2022 to 13.5% in 2025. However, 51% of employees are still watching or actively seeking new roles, and softening job market conditions may be masking dissatisfaction rather than resolving it.

Q: What percentage of turnover is preventable? A: Research consistently shows approximately 42% of employee turnover is preventable, meaning the departing employee believed their employer could have done something to keep them.

Q: Which generation is most likely to stay in their role? A: According to the Eagle Hill Consulting Retention Index, Millennials currently lead the workforce as the employees most likely to stay in their roles over the coming six months, with a Retention Index of 115.4.

Conclusion: The Data Demands Action, Not Just Tracking

Turnover statistics are not just numbers to report in a quarterly HR presentation. They are signals of something broken or something working in your organization.

The companies winning the retention battle in 2025 and heading into 2026 are not doing anything exotic. They are investing in learning, building cultures where people feel valued, enabling flexible work, developing great managers, and creating clear paths forward for their people.

Track your retention rate. Benchmark it against your industry. Identify which employee segments have the highest flight risk. Then act on what you find. The 42% of turnover that is preventable does not prevent itself.

You should also take into context the average retention rates for your industry. Industries such as food service have problems with restaurant staffing issues. Food service and retail have higher turnover than other sectors.

But how do you create an effective retention strategy and have more loyal employees? Developing an employee retention strategy is critical for organizations, as high turnover generates significant recruitment, hiring, and training expenses. Retaining skilled employees enhances overall productivity by leveraging their familiarity with company processes and expectations.  

Organizations can create a digital flipbook to showcase career paths, success stories, or learning opportunities that inspire long-term commitment.

Additionally, it preserves valuable institutional knowledge. A stable, engaged workforce fosters a positive environment, supporting a strong company culture and positively impacting customer satisfaction. Company retreats when thoughtfully organized by a team retreat planner, can play a key role in strengthening team cohesion, reducing burnout, and reinforcing a sense of belonging within the organization.

Recognizing individual and team contributions through regular employee appreciation not only boosts morale but also reinforces positive behaviors that align with company values.