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One in two U.S. employees are open to leaving their current company, a statistic which most hiring managers will be unlikely to contest. The modern brevity of workers results in businesses experiencing substantially increased staffing costs, operational disruptions, and a near-constant reduction of valuable organizational knowledge and skills. There are a variety of reasons the contribute to employee turnover; in this article, we take a look at tips for attracting and retaining top talent to help beat the draining effect of employee churn.
Employee retention refers to an organization’s ability to keep its employees over time. It’s not just about minimizing turnover—it’s about creating an environment where people want to stay and grow. High retention rates often reflect a strong workplace culture, competitive compensation, and solid management practices. For employers, effective retention means reduced hiring costs, stronger team dynamics, and greater long-term productivity.
Although employee retention and turnover are closely connected, they represent two sides of workforce management and should be evaluated separately to get a full picture of your organization’s staffing health.
Employee retention measures how many employees choose to stay with a company over a specific period. High retention indicates a strong internal culture, satisfied employees, and effective management. It suggests that people see long-term potential with the company and are motivated to contribute to its success.
Employee turnover, on the other hand, measures how many employees leave the company—either voluntarily (resignation) or involuntarily (termination or layoffs). High turnover can signal problems like poor job fit, lack of growth opportunities, low engagement, or non competitive compensation. Not all turnover is negative—some roles naturally have higher churn—but a persistently high turnover rate can point to underlying issues that need to be addressed.
Employee retention rate is a key metric that helps organizations understand how well they’re holding onto their talent over time. It measures the percentage of employees who remain with the company during a given period—typically monthly, quarterly, or annually. Monitoring this rate allows businesses to spot trends, set benchmarks, and assess the effectiveness of their retention strategies.
To find your retention rate, use the following formula:
Example:
If your company started the year with 100 employees, and 88 of them were still employed at the end of the year:
A higher retention rate typically indicates strong employee satisfaction, effective leadership, and a healthy workplace culture.
While retention tells you who stayed, turnover tells you who left. Tracking both gives you a more complete picture of employee movement.
Example:
If 12 employees left over the course of the year, and the average number of employees during that time was 100:
It’s important to analyze turnover in context—some roles or industries naturally experience higher turnover rates. Still, consistently high turnover can point to deeper issues like poor engagement, low morale, or a misalignment between expectations and reality.
Employee turnover rates can vary widely depending on the industry, job type, and workforce conditions. Comparing your turnover rate to industry benchmarks is essential for identifying whether your company is experiencing normal attrition—or facing a retention problem that needs attention.
High turnover doesn’t always mean something is wrong. In fast-paced, seasonal, or entry-level-heavy industries, higher turnover is expected. In contrast, industries that offer long-term career paths or require highly specialized skills typically aim for much lower turnover. Understanding these trends helps set realistic expectations and shape effective workforce strategies.
Here’s a look at typical turnover rates across various U.S. industries:
Retaining employees is crucial for the sustained success and stability of an organization, as well as the obvious productivity reasons. Maintaining well-developed talent, a positive company culture, and efficient operations are only possible when turnover is kept in check.
The process of hiring new employees often involves significant expenses, including advertising job openings, salary costs that go into recruiting, and many other costs associated with onboarding a new employee. Additionally, conducting interviews requires a considerable investment of time and resources. Once new hires are onboarded, they typically need training to familiarize themselves with the company and become proficient in their roles. This training can include formal sessions, the creation of materials, and the dedication of time from trainers or mentors.
One of the most significant and visible impacts of employee turnover is the loss of productivity as new employees take time to reach the efficiency levels of their more experienced peers. This transition period can cause a temporary decline in output, affecting the overall performance of the team or department. By retaining employees, businesses can maintain consistent productivity levels and avoid the financial burden associated with frequent hiring and training.
Retaining employees is not just about maintaining workforce numbers but also preserving company knowledge. Long-term employees possess a deep understanding of internal processes, systems, and workflows that are often unique to the organization. This knowledge is accumulated over years of experience and can be challenging to transfer to new hires efficiently. These employees often have historical insights that are crucial for informed decision-making and problem-solving.
Long-standing employees play a pivotal role in the onboarding and development of new hires. They act as mentors, sharing their wealth of knowledge and experience, which helps newcomers integrate smoothly into the team. This mentorship is invaluable in providing informal training that goes beyond standard onboarding processes, offering practical insights and tips that are not always captured in formal training materials.
One of the significant advantages of employee retention is the increased efficiency that experienced staff bring to their roles. Familiarity with their tasks allows these employees to work faster and with greater accuracy compared to newer hires who are still learning the processes. This proficiency minimizes mistakes, thereby reducing the time and resources spent on corrections and rework.
Consistency in the quality of work is another key benefit of retaining employees. Long-term staff members have a well-established understanding of the standards and expectations within the organization, which helps maintain a high level of quality in their output. Consistent quality also reinforces the company’s reputation for excellence, which is essential for building and maintaining client trust.
Retaining employees is vital for cultivating a strong company culture. Long-term employees are typically more aligned with the company’s values and mission, having internalized these principles over time. This alignment helps create a unified workforce that shares common goals and understands the company’s strategic direction. As a result, the workplace environment becomes more focused, where employees are motivated by a shared sense of purpose.
Tenured employees often play a key role in shaping and maintaining the company culture. Their deep understanding of the organization’s history and values positions them as natural leaders in cultural initiatives and activities. They advocate for the company’s values and mission, helping to attract like-minded individuals and build a strong, positive reputation in the broader community.
Employees leave organizations for a variety of reasons. Understanding these reasons allows employers to address potential issues and improve retention. Here are some common reasons why employees choose to leave:
Many different factors influence why an individual might look for employment elsewhere. Because of this, it’s a must for employers to support staff in a wide range of areas to retain their workforce. We’ve put together 8 essential tips designed to raise employee satisfaction and longevity within the company.
Focusing on employee well-being and development is crucial for retention. Employees who feel valued and supported are more likely to stay with an organization. According to Gallup, employees that feel that their employer cares about their overall wellbeing are 69% less likely to be actively looking for a new position and 71% less likely to report experiencing large amounts of burnout. Your employees are what keeps the businesses moving through day-to-day operations, so it’s important to treat them with respect and provide them the tools to best succeed.
Additional Tips:
Prioritizing character fit over pure talent can have a profound impact on long-term employee retention and organizational success. While it’s tempting to focus solely on skills, it’s often said that trading 90% talent for 10% character is worth it. Employees who align with your company’s mission and values are more likely to feel a sense of belonging and purpose, which can significantly boost their engagement. Continuously reinforcing and demonstrating your company values can inspire employees and maintain a positive, cohesive work environment.
Additional Tips:
Employees perform best when they have a clear understanding of what is expected of them in their roles. Confusion in job responsibilities can lead to frustration, decreased productivity, and ultimately, employee turnover. By providing detailed job descriptions and clear performance expectations, employers can make employees feel more secure and focused in their work. This clarity not only enhances job satisfaction but also empowers employees to meet and exceed their objectives, contributing to overall organizational success.
Additional Tips:
Creating a positive, inclusive, and supportive workplace culture is crucial for improving employee retention. When employees feel they are part of a larger, meaningful mission, they are more likely to be engaged and committed to the organization. A strong company culture should be the foundation for decisions around hiring, goal-setting, and strategic planning. By prioritizing a culture that values and supports its employees, companies can create a work environment where people are motivated to stay and contribute to long-term success. To further prove the importance of company culture, 64% of employees who view their workplace culture as poor have actively searched for new job opportunities in the past six months.
Additional Tips:
Effective management is a primary contributor to employee satisfaction and retention. However, individuals are often thrown into management roles without proper training. This can have negative consequences for both the managers and their teams. Unprepared managers may struggle with leadership responsibilities, leading to decreased morale and productivity among employees. Additionally, these unprepared managers may feel overwhelmed and dissatisfied in their roles, potentially resulting in higher turnover rates. Providing comprehensive management training equips leaders with the skills they need to effectively guide their teams, ensuring a positive work environment and enhancing overall retention.
Additional Tips:
Offering competitive salaries is a key consideration for retaining employees and ensuring job satisfaction. Understanding fair market rates for the various positions within your organization is crucial to prevent underpayment and to stay competitive in the job market. 56% of employees cite the desire for higher pay as the primary reason for seeking new employment opportunities. Because of this, it’s essential for employers to offer fair compensation and clearly communicate the structure of raises and bonuses. This transparency not only motivates employees but also helps them see a clear path for financial progression within the company.
Additional Tips:
While competitive salaries are important, many employees also value the broader benefits package offered by their employers. Alternative forms of compensation, such as additional paid time off (PTO), bonuses, recognition programs, profit sharing, and company-sponsored events, can significantly enhance employee satisfaction and loyalty. These benefits not only provide financial and recreational value but also contribute to a positive work-life balance and a supportive company culture.
Additional Tips:
Employees seek opportunities for growth and development and may feel dissatisfied if they perceive their roles as stagnant. Offering advancement opportunities and training programs that help employees develop new skills can significantly boost retention. By investing in the professional growth of your team, you not only enhance their skills but also demonstrate a commitment to their long-term career success within the organization. This support can lead to increased job satisfaction, loyalty, and a stronger, more capable workforce.
Additional Tips:
While these tips can significantly help employee retention, there will always be times when hiring new staff becomes necessary. Managing the hiring process in-house can be both costly and time-consuming. Partnering with a staffing agency like Staffing By Starboard can streamline this process, helping you find the right candidates who not only meet the job requirements but also fit your company culture. By leveraging our expertise, you can fill positions more efficiently and ensure a better match for your team. Contact us today for a free consultation and discover how Staffing By Starboard can improve your workforce.
Keeping employee retention high is all about creating a workplace where people want to stay. Here are some tools and resources that can help you build a culture that supports long-term retention.
These platforms help you stay in tune with your team’s satisfaction and concerns:
Employees stay when they see a clear path to growth:
People love being seen and appreciated:
Employee turnover refers to the rate at which employees leave a company and are replaced by new hires. It can be voluntary (when an employee chooses to leave) or involuntary (when the employer terminates the employment). High turnover can be costly and disruptive, while low turnover often indicates a stable and satisfied workforce.
Employee retention impacts productivity, morale, and company culture. Keeping experienced employees helps reduce hiring and training costs and fosters stronger team dynamics. High retention is often linked to higher customer satisfaction and improved business performance.
Turnover costs include recruiting, onboarding, training, lost productivity, and the potential impact on team morale. Some studies estimate the cost of replacing an employee can range from 50% to 200% of their annual salary.
A “good” retention rate varies by industry, but in general, companies aim for a rate of 85–90% or higher annually. Industries with traditionally high turnover (e.g., retail, hospitality) may have lower benchmarks than corporate or professional services.
Managers play a key role by:
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