Even though we’re increasingly reading about the impact of redundancies on employee wellbeing, retention still seems to be on many employers’ minds. This recent study by Global HR and payroll company Remote gives a useful perspective on what’s impacting turnover rates and how to reduce them.
Employee turnover rates are expected to rise to 41% in 2023
Remote surveyed 544 employers in the UK and US to discover the jobs with the highest and lowest turnover rates, and how turnover rates have changed in the last few years.
Organisational restructure (55%), Poor-work life balance (54%) and personal circumstances (54%) were ranked the highest causes of employee turnover.
On average, employee turnover rates have increased by 8.7% since 2019, and are estimated to increase even more in 2023 with a predicted 35.6% turnover rate in the UK and 46.8% in the US.
The rates in the US have been increasing every year, seeing an increase of 9.6% since 2019. The UK rates have increased by 7.7% in the last four years.
The average company turnover rate in the UK and US from 2019 to 2023:
|
Year |
UK |
US |
Average |
|
2019 |
25.8% |
34.3%
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|
30.3% |
|
2020 |
29.7% |
36.9% |
33.4% |
|
2021 |
31.6% |
40.3% |
36.1% |
|
2022 |
33.6% |
43.9% |
38.9% |
|
2023 (estimated*) |
35.6% |
46.8% |
41.4% |
*this figure is the estimated turnover rate given by the business owners surveyed.
Businesses offering hybrid roles find it easier to retain staff
The average turnover rate of different work models in the UK and US from 2019 to 2023:
|
Year |
Office |
Hybrid |
Remote |
|
2019 |
30.1% |
29.8% |
33.0% |
|
2020 |
34.9% |
31.7% |
34.8% |
|
2021 |
38.5% |
34.4% |
34.4% |
|
2022 |
41.6% |
36.6% |
38.7% |
|
2023 (estimated) |
43.7% |
39.9% |
39.3% |
Hybrid or flexible work models have had the lowest overall turnover rates since 2019, peaking in 2022 with a turnover rate 5% lower than those fully office based.
Fully remote roles are predicted to have the highest retention rate in 2023 with 39.3%, just slightly lower than hybrid jobs with a predicted 39.9% rate and 4.5% lower than office jobs which are estimated to have a 43.7% turnover rate.
What employers can do
According to Amanda Day, Director of People Enablement at Remote:
“Employee turnover rates are on the rise, and expected to increase even more in 2023, so it’s critically important for employers to combat this with intentional solutions and retain top talent.
With the average cost of finding a new employee at £7,729 in the UK and $22,814 in the US, companies need to invest more in retaining top performers rather than spending the time and money needed to replace them.
There are many tactics and strategies employers can use to increase their retention rates. One of the primary motivators for employees in a post-pandemic workplace is finding a stronger life-work balance. A simple and cost-effective solution to help retain employers is to provide more flexible working conditions.
Companies that offer hybrid, remote, or asynchronous work find it easier to retain their employees than those that don’t. Flexible work benefits are proven to appeal to workers and encourage retention. Employers don’t have to resort to financial compensation. More affordable value-based benefits that support health and well-being still appeal to employees and demonstrate genuine care and loyalty. Employers should also make sure top performers have learning and development provisions and clear pathways for career progression.”
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