What's behind industry employee turnover rates?

Unpacking employee turnover insights for 2024

Employee turnover trends over the last four years have been tumultuous, to say the least.

Following the start of the COVID-19 pandemic in 2020, we entered ‘The Great Resignation’ in 2021 with record numbers of employees around the world voluntarily quitting their jobs. 2022 was then coined ‘The Great Reshuffle,’ triggered by a wave of vacant positions and millions of workers seeking out roles that offered greater work-life balance and better benefits. 2023 became the year of the so-called ‘Great Reset,’ where work norms were redefined. 

The landscape of HR continues to evolve rapidly in 2024 as an increasing percentage of Generation Z enter the workforce and expectations around flexibility, connection and collaborative workplace tech are higher than ever. 

The war for talent is most certainly still ongoing, and 33% of U.S. hiring managers are reportedly bracing themselves for increased employee turnover this year.

There’s no denying that employee retention is good for business. Organizations that effectively retain employees have higher engagement and stronger company culture, and deliver better customer service.

On the flip side, many direct and indirect costs are associated with employee turnover. According to the 2023 Retention Report from Work Institute, the cost of every resignation remains at around 33% of the outgoing employee’s base salary. And on top of this, 73% of hiring managers believe that employee turnover places a heavy burden on remaining employees, potentially damaging engagement and morale. 

The good news is that around 75% of voluntary employee turnover is preventable, meaning the power is in your hands.

Here are the average turnover rates in the top five industries, the unique challenges each faces and steps employers can take to improve employee retention. 

A look at turnover rates among vulnerable industries

While turnover rates have leveled since the peak in 2021 and 2022, a still-unclear economy and a shift in employee expectations will continue to influence turnover rates this year.

The most recent data shows that the average U.S. employee turnover rate (due to resignation) has settled at 17.3%, down from the peak of 24.7% during The Great Resignation.

Here are the most recently available employee turnover rates for five industries with the highest churn, and the key drivers causing such a high level of resignations:

Tips for reducing turnover in each industry

To try and counteract the impacts of turnover, 88% of companies are planning to hire over the next year. But considering the high direct and indirect costs linked to employee turnover, it’s also important to focus on the best ways to retain your top talent.  

Reducing turnover in technology

Managing a hybrid workforce in the technology industry comes with its own set of complications. In addition to continually working to keep remote employees connected and engaged, you’ll need to make a conscious effort to reassure your workforce in the face of widespread tech sector layoffs.

To reduce turnover in tech, try the following:

• Prioritizing regular updates from the leadership team and frequent strategy communications 
• Sharing frequent pulse surveys to gauge employee morale and encourage feedback
• Utilizing digital workplace tools and technologies to encourage collaboration and engagement across the entire workforce
• Boosting employee morale with a recognition program that encourages connections across departments so less visible teams don’t feel forgotten about
• Providing the right training and support for managers who are leading remote or geographically dispersed teams 

Reducing turnover in manufacturing

Annual spending in the US manufacturing industry has experienced significant growth over the last few years, so it’s an optimistic time for the sector.

Frontline workers, like those in manufacturing plants, spend the majority of their day in their workplace, so if they aren’t happy with the conditions, they’ll leave. 

Despite this, average employee turnover in manufacturing is still higher than the US average. Employers can reduce this by: 

• Improving communication throughout the workforce with regular management updates, daily team huddles and monthly company updates
• Helping employees feel more valued with more frequent rewards and recognition
• Increasing on-site visibility of senior leadership or work-from-home leaders so employees don’t feel isolated 
• Keeping flexibility front-of-mind by creating opportunities for compressed workweeks or shift-swapping
• Introducing new digital tools and technologies and exploring the ‘industrial metaverse’ to improve efficiency and productivity
• Prioritizing health, safety and wellbeing to reduce accidents and ensure employees feel safe at work

Reducing turnover in retail and wholesale

A big reason for turnover in retail is dealing with difficult customers, which is the nature of the beast. You should ensure employees are sufficiently trained and feel supported by their leaders when facing challenging situations. 

In a customer-facing role, stressful conditions can quickly wear a person down. Focussing on your employees’ wellbeing with financial, physical and mental support can ease some of this burden. 

You can reduce turnover in retail and wholesale by: 

• Providing sufficient employee training and ensuring policies and procedures are visible 
• Scheduling employees for shorter shifts with longer, or more frequent, breaks to help them return to work feeling refreshed 
• Offering a free EAP so your team has a safe space to go should they ever need extra support
• Being transparent about compensation and benefits, and introducing a wellbeing allowance that gives retail employees money to put towards the wellbeing initiatives they need and want
• Boost team-wide morale with peer-to-peer recognition tools that promote a culture of recognition and gratitude

Reducing turnover in banking/finance

Don’t try to prevent the inevitable ups and downs of the finance industry. Instead, focus on improving your workplace and boosting employee engagement by doing the following: 

• Being transparent with pay scales and opportunities for career progression within the organization
• Increasing levels of flexibility around work locations, shift patterns and working hours
• Focusing on career development by supporting employees to achieve industry qualifications and progress to higher grades 
• Making recognition and reward visible within and across departments and locations 
• Providing unique employee benefits and making information about these benefits easy to find.

Reducing turnover in healthcare

Healthcare workers deal with some of the most difficult situations of any industry. Be conscious of the continuous mental strain placed on workers. 

Help mitigate this strain by:

• Creating a retention strategy that considers development opportunities and career progression
• Ensuring team leaders and managers receive the right training that enables them to properly support their team members
• Communicating openly and honestly, ensuring employees feel ‘part of the bigger picture’ and connected to leadership
• Developing an enhanced employee wellbeing strategy, including mental health support and counseling 
• Focusing on employee experience by collecting employee feedback regularly and implementing changes 

Reducing employee turnover is crucial for every industry, and these tips will help you to engage and retain your best people.

Want to learn more about how our solutions can help you attract, engage and retain top talent in your industry? Get in touch with an Employee Engagement Specialist today!