Employee turnover rates are set to hit 41.4 percent on average in 2023, according to a new study by Remote.
The US is seeing turnover rates of 46.8 percent, and the UK is hitting 35.6 percent.
Hybrid and remote work structures have the lowest employee turnover rates at 36.6 percent and 38.7 percent respectively, compared to in-office roles at 43.7 percent.
Entry-level positions had the highest staff turnover rate in 2022 at 35 percent.
Finance and Accounting is the industry that saw the biggest increase in employee turnover from 2021 to 2022 at 3.3 percent.
Finding and hiring a new employee takes 40 days on average and costs business 34.5 percent of an employee’s salary.
Employee turnover rates are expected to rise to 41 percent in 2023
On average, employee turnover rates have increased by 8.7 percent since 2019, and are estimated to increase even more in 2023 with a predicted 35.6 percent turnover rate in the UK and 46.8 percent in the US.
The rates in the US have been increasing every year, seeing an increase of 9.6 percent since 2019. The UK rates have increased by 7.7 percent in the last four years.
Product and Information Technology are the business functions with the highest employee turnover in 2022
In 2022, jobs in ‘product’ departments have seen the highest turnover in the UK with a 32.2 percent rate. Information technology jobs came in with the highest turnover rates in the US with an average of 41.7 percent of employees leaving.
Finance and accounting roles have seen the biggest average increase in turnover, with a 3.3 percent higher rate in 2022 compared to 2021. Customer service and sales roles are the only jobs that have seen a decrease in their employee turnover, with rates falling by 0.2 percent and 0.5 percent respectively.
On the flip side, legal jobs had the lowest turnover rates in both 2021 and 2022 in the UK. The US saw the lowest turnover in employees in HR jobs in 2021 and then design jobs in 2022.
Employee turnover also varies in different job levels. Remote discovered that in 2021 director roles had the highest turnover rate with 35 percent, compared to 2022 which saw the highest turnover in entry-level positions with 35 percent.
Businesses offering hybrid roles find it easier to retain staff
Hybrid or flexible work models have had the lowest overall turnover rates since 2019, peaking in 2022 with a turnover rate 5 percent lower than those fully office based.
Fully remote roles are predicted to have the highest retention rate in 2023 with 39.3 percent, just slightly lower than hybrid jobs with a predicted 39.9 percent rate and 4.5 percent lower than office jobs which are estimated to have a 43.7 percent turnover rate.
Hiring new employees takes on average 40 days and costs £7,729 in the UK and $22,814 in the US
It costs a business 34.5 percent of an employee’s salary to find and hire a new employee.
In the UK, it costs around 26.1 percent of an employee’s salary to find and hire a new member of staff, that’s on average £7,729 per new employee based on the average UK annual salary.
In the USA it costs around 42.7 percent of an employee’s salary to find and hire someone new, based on the average salary in the US , this costs businesses $22,814 on average to find a new staff member.
It takes a business an average of 40 days to find and hire a new employee. Finding a new hire takes the longest in IT and telecoms jobs, with an average of 49 days needed to replace an employee that has left. Next is education roles, taking an average of 44 days. The travel and transport industry replaces employees in the shortest amount of time, taking just 23 days.
Amanda Day, Director of People Enablement at Remote commented:
“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.
Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at the University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.