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May 17, 2022
March 3, 2021

Employee Turnover Rates: Your 2022 Guide

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If you clicked on this, you knew we were going to mention what everyone has been talking about for months now: the Great Resignation. Employees in all industries are leaving their jobs in record numbers, looking for better opportunities and greener pastures. Because of this mass exodus, the question on many HR leaders’ minds is how to retain talent and thrive through the Great Resignation.

In this post, we’ll talk about the average employee turnover rate over the past few years, what a good employee retention rate is in today’s work environment, and how to improve your retention strategy for the future.

Average Employee Turnover Rates by Industry

To fully understand the situation we find ourselves in now, we have to understand the average turnover rates of the recent past. Let’s start with 2019's turnover rate, back when global virus outbreaks and quarantines were simply fun themes for board games to play with friends (the game Pandemic just isn’t the same).

2019 Turnover Rates

Average turnover rate: 45.1%

Turnover rate by industry:
  • Construction: 65%
  • Manufacturing: 31.6%
  • Trade, transportation, and utilities: 49.4%
  • Information: 38.5%
  • Financial activities: 28.5%
  • Professional and business services: 63.5%
  • Education and health: 33.4%
  • Leisure and hospitality: 79%
  • Government: 18.6%

As you can see, different industries have different turnover rates, but we can use 45.1% as a good baseline for the next year. Let’s look at 2020 now:

2020 Turnover Rates

Average turnover rate: 57.3%

Turnover rate by industry:
  • Construction: 63.3%
  • Manufacturing: 44.3%
  • Trade, transportation, and utilities: 60.5%
  • Information: 44.8%
  • Financial activities: 31.3%
  • Professional and business services: 69.2%
  • Education and health: 44.8%
  • Leisure and hospitality: 130.5%
  • Government: 24.2%

In 2020, every industry saw a sizable jump in turnover rates (leisure and hospitality jumped by over 51%!). You probably saw this in your own experience. With the pandemic kicking off and many companies either closing their doors, downsizing, or trying to transition to remote work, these statistics are understandable.

2021 Turnover Rates

Average turnover rate: 47.2%

Turnover rate by industry:
  • Construction: 56.9%
  • Manufacturing: 39.9%
  • Trade, Transportation, and Utilities: 54.5%
  • Information: 38.9%
  • Financial activities: 28.5%
  • Professional and Business services: 64.2%
  • Education and Health services: 37.3%
  • Leisure and Hospitality: 84.9%
  • Government: 18%

In 2021, the pandemic started winding down somewhat, and businesses got better and better at handling hybrid workplaces, work from home, and healthy practices. That reflects in the lower turnover rates.

However, turnover rates simply count every employee who left a company over the year, including firing and discharges. Looking specifically at voluntary quits, 2021 actually holds the record. A whopping 47.4 million people quit their jobs throughout 2021, the highest number in years.

Why Worry About This?

Despite the fact that most industries are settling down and lowering turnover rates, employees are still leaving in record numbers as they look for better opportunities.  Every time an employee quits, the hiring process costs you at least one half of that employee’s annual salary (at most, this process can cost you 2X the salary of the employee who quit!). Not to mention that as more people quit, your company culture suffers as others deal with stress and extra work.

Some turnover is natural—no matter what you do, employees are going to leave for various reasons. However, you should aim for a turnover rate of 10% and, according to SHRM, most companies have a rate closer to 20% (and your target turnover rate will depend on different factors, such as your industry and your internal promotion rate. So how do you lower your turnover rate? How do you maintain a healthy culture of retention that encourages employees to stay and succeed?

How You Can Improve Retention Rates

The first thing you need to keep in mind is that your employees are people. They’re not numbers, and they’re not a resource to be used. You can’t force them to behave with the perfect algorithm of retention. The best you can do is create a culture that makes them feel valued, seen, and cared for so that they want to stay.

In order to create said culture, take a look at some specific tips you can incorporate into your retention strategy:

1. Support Employee Advancement

Did you know that 88% of people rank professional development and career growth opportunities as important when they’re looking for a new company? That’s nearly nine employees out of ten! These types of learning opportunities not only create more skilled and confident employees, they also show your workforce that you care about their continued improvement and success.

Whether you host a class focusing on soft skills, such as communication or teamwork, or you pay for interested employees to sign up for a class in hard skills, such as coding or business management, you need to show each employee that you care for their growth.

2. Offer Awesome Compensation

Yes, you knew this one was coming. As the saying goes, money makes the world go round, and it should also be a vital part of your retention strategy. Ensure that each position in your company has a competitive and fair salary, and leaders should always seriously listen to requests for raises. You could also think about adding a small amount of extra cash (or points on our platform) to each employee’s bi-weekly paycheck—just as a way to say thanks!

However, the salaries you offer aren’t the only part of your compensation package that you need to look closely at. Benefits are an integral aspect that you absolutely need to consider. Do you offer good health insurance (with a range of coverage options for single people and families)? Do you include vision and dental insurance? What about retirement savings?

Creative benefits are growing in popularity as well. Think about offering free healthy snacks, catered lunch, or monthly massages for your employees. Offering reimbursement for transportation or bus passes can be helpful, too. The best way to find which benefits your employees actually want is to ask them. Send out a survey and then actually implement the benefits that are the most popular..

3. Create a Culture of Care

Your employees, both current and future, need to see that you care about them. One of the best (and most expected) things you can do is offer flexible work. 51% of employees wish their employer offered more flexible options, and 84% of working parents said flexibility is the number one most important thing when looking for a job.

Flexibility could be unlimited PTO, flexible work hours, or flexible work locations. Find the option that works best for your company, and then make sure your employees know you support them and their work-life balance.

One other way you can create an amazing culture is with employee rewards and recognition. Recognition can lower voluntary turnover by 31% by itself (and a lack of recognition is the number one reason employees leave), which is what this post is all about! Recognition programs, such as service awards, spot recognitions, and wellness programs, make your employees feel valued and appreciated.

Awardco is all about genuine, effective employee recognition. We can help you build a program that’s easy to manage and that employees will love.

Improve Retention for 2022

Employees are still surrounded by nearly unlimited options when it comes to employment. In order to improve your employee retention rate, you need to invest time, effort, and money into making your employees feel like they’re valued parts of a team, not invisible parts of a machine. By supporting career development, enhancing your compensation, and evolving your culture, you will show your loyalty to your employees, which, in turn, will make them more loyal to your company.


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