What numbers matter most when it comes to employee retention? If you’re not tracking the right benchmarks for early detection, by the time you realize you have an employee retention problem — it may already be too late. With turnover costing U.S. businesses nearly $1 trillion a year, few companies can afford to wait until the eleventh hour to identify a retention problem.
These benchmarks, which draw on Randstad's deep domain expertise and diverse experience with clients across industries, should help give you insights into the current state of employee retention efforts at your company, as well as where you should focus on making improvements.
Let's see how you stack up.
employee tenure length
How long should folks be sticking around at your company? Ultimately, of course, a lot of that depends on the role and industry, but here are some useful benchmarks from U.S. Bureau of Labor Statistics' latest annual report.
- median overall employee tenure: 4.1 years
- employees between 25 and 34: 2.8 years
- employees between 55 and 64: 9.9 years
If the numbers at your organization aren't lining up with these figures, it's a clear sign that you have an employee retention problem — and need to take action immediately. That might sound rough, but if you take steps today to proactively address the issue, you'll find that you stand to deliver considerable value to your company over the long term.
Exit interviews are a core component of any effective employee retention strategy. It's your way of understanding why people are leaving, and which adjustments to make to keep it from happening in the future. How else do you expect to develop an informed employee retention strategy?
Yet, for a variety of reasons, many companies today report that these interviews often don't take place — even when there are processes in place to ensure they do. For example, at companies that conduct exit interviews, research shows that, on average, the actual response rate is a paltry 15 percent.
Whatever the number is at your company, it needs to be substantially above this baseline average. And if, on the other hand, you aren't currently conducting exit interviews — well, you have your work cut out for you, but that's an obvious starting place for you to make improvements.
The percentage of U.S. employees who are actively engaged reached new highs in the past year — only to settle at a still respectable 36 percent, according to the latest Gallup annual employee engagement survey.
At the same time, that's hardly cause for celebration — only slightly over a third of all employees are engaged, after all. No less troubling is the fact that 13 percent of all employees are classified as "actively disengaged." Meanwhile, the majority of workers (51%) remain "not engaged," according to Gallup.
The bottom line is that employee engagement and retention are closely correlated. So whatever approach you're currently taking to measure engagement at your organization, if the majority of employees are not engaged, you're in for trouble.
Think hard about these benchmarks in the context of your own organization. By uncovering potential focus areas for improvement, they should give you a baseline for implementing a more effective employee retention strategy. From there, you'll need to be diligent about tracking its impact on performance — and do so on an ongoing basis, making adjustments as necessary.
In the end, the solution might not be obvious or easy, but it just might save your company's top talent. And as we discussed in the previous article, it will translate to substantial cost savings. In the next and final article in our employee retention series, we'll outline how you can do exactly that.