March 15, 2021

10 Facts You Should Know About Employee Turnover

Sam Caucci

Employee turnover is a growing problem in America. 

More than 1 in 4 workers in the U.S. turns over every year, and that rate has been getting progressively worse every year even before the pandemic. With America about to reopen, employers should be worried about our nation’s increasingly high levels of employee turnover. 

The good news is that more than 77% of all turnover is preventable. But in order to prevent turnover and create happy, connected, and engaged employees who want to stay in their jobs long-term, we first need to understand the scope of the problem. 

So let’s break things down by taking a look at the numbers. Here are the 10 facts every workforce and talent leader should know about employee turnover:

1. The U.S. has the highest turnover rate of any industrialized country

The annual turnover in the U.S. is 26.3%, according to the Bureau of Labor Statistics. America tops the charts when it comes to global employee turnover rates, and this talent shortage has been increasing year-over-year.

2. Employees are at the highest risk for turnover during their first year on the job 

More than a third of all employee turnover is caused by employees leaving in their first year:

  • 38.6% of turnover occurs during an employee’s first year.
  • 43% of new employees who turnover did it within their first 90 days. 
3. About 75 percent of voluntary turnover is caused by factors managers can influence.

No, this doesn’t mean managers have to simply throw more money and benefits at their employees — though in some cases this does help, of course. Especially since 44% of all workers are working in low-wage jobs with a median annual earnings of just $17,950. But that’s an issue for a different blog post.

So how can managers prevent turnover? One major factor lies in the question Gallup has studied for decades: How engaged are your employees? 

Gallup found that “engaged employees are far more likely to perceive that they are paid appropriately for the work they do (43%), compared to employees who are disengaged (15%) or actively disengaged (13%).” 

So if you want to stop your employees from quitting, one important step is making sure your workers are actively engaged at work. This is a significant challenge for most employees, since only 15% of the global workforce is engaged at work. 

4. The top reason employees leave is because of the lack of career advancement

Many employers falsely assume that most employees leave for better compensation. But in reality, the number one reason workers turnover is because they don’t think they have any room for career advancement in their current role and company. Below, we’ve outlined the top six reasons employees leave their jobs:

  • Career advancement or promotional opportunities: 32% 
  • Pay/benefits: 22% (although this ties back to our above point. Engaged employees typically feel they are being compensated fairly). 
  • Lack of fit to job: 20.2%
  • Management/general work environment: 17%
  • Flexibility/scheduling issues: 8% (Gallup found that 51% of employees say they would switch to a job that allows them a more flexible schedule, and 37% would switch jobs if they had the option to work remotely at least part of the time).
  • Job security: 2%
5. Employee turnover disproportionately impacts workers from vulnerable communities

If your employees don’t feel valued, respected, and listened to at work, then they’re going to leave. This is true for all employees, but it disproportionately impacts workers of color. In fact, more than a third (35%) of Black workers intend to quit their job within two years, compared with 27% of white workers. 

This issue can also be fixed by managers. Gallup found that workers of color who experience microaggressions in the workplace are more likely to quit. So it’s important for managers to regularly check in with their employees and ensure they feel supported and aren’t experiencing microaggressions or other workplace issues that many workers likely don’t feel safe and comfortable coming forward about.

6. Employee turnover costs the U.S. economy $1 trillion per year

Obviously, that’s a lot of money. But to put this figure into context, consider the fact that the cost of replacing an individual employee can range from one-half to two times the employee’s annual salary. Plus, it takes companies an average of 42 days to fill an open position. 

7. Inclusive leadership is one of the most effective ways to reduce turnover 

Recent research finds that inclusive leaders make their employees feel more valued, trusted, respected, and psychologically safe. This not only reduces turnover, it also creates employees who are more engaged and fired up when they come into work every day. 

So just how much of an impact does inclusive leadership have on turnover? Well, studies show that high feelings of employee belonging results in a 50% drop in turnover. 

On the other hand, employees feel “on guard” at work are much more likely to leave than those who feel relaxed and comfortable at work. 

8. Younger employees are most likely to turnover

Nearly half of all young employees, which includes Millennials and Gen Z, plan to leave their employer within the next two years. More alarming is that this figure is rising very quickly.

In 2017, 38% of millennials said they would leave their job if they had the option, but that figure jumped to 49% by 2019. The top three things contributing to Millennials’ desire to leave their jobs is:

  • Dissatisfaction with their pay or benefits (43%)
  • Lack of career advancement opportunities (35%)
  • Lack of learning and development opportunities (28%) 
9. Stressed out workers are 3x more likely to quit 

Workers today are more stressed and burned out than ever. 

The stress of the pandemic combined with longer working hours, less social interaction among coworkers, rampant pay cuts, and a teleworking environment that leaves millions of employees feeling ‘always on’ has taken its toll on the American workforce. Today, more than 73% of all workers across industries report experiencing burnout at work.

It’s especially important for managers to regularly check in with their employees about their worker’s stress levels. As a manager, you shouldn’t be afraid to ask your employees if they’re feeling burned out. Let them know they can be honest, and if workers confide that they are feeling stressed then it’s the manager’s responsibility to support them and come up with solutions to help. Otherwise, you risk losing that employee altogether. 

10. The 10th fact you should know about employee turnover is that…

Lately, we’ve been hearing from more and more workforce leaders who are worried about the problem of employee turnover, so we took action. And not just by writing this blog. We have created an eBook that illustrates the problem of employee turnover and the solutions.

But if you want to see the graph for yourself and find out the solutions to employee turnover, then you’re going to have to earn it by correctly answering a question from the 1Huddle game Preventing Burnout.

Here’s your question:

94% of workers say that ____________ would reduce stress, improve their mental health, and provide for a better integration of work and personal life. 

  1. More workplace flexibility 
  2. More Zoom happy hours
  3. Fewer meetings
  4. Quarterly team retreats

Do you know the answer? 

Email your guess to with ‘Employee Turnover’ as the subject line, and we will send you an exclusive copy of 1Huddle’s eBook that illustrates the problem of employee turnover and the solutions you can take to fix it.

Sam Caucci, Founder & CEO at 1Huddle

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