As we quickly approach 2025, the landscape of workforce management continues to evolve at an unprecedented pace. According to a recent Gartner study, nearly half of employees hired in the past year received two additional job offers, leading to 91% of HR leaders expressing significant concern about employee turnover in the coming months. (1) This statistic highlights the pressing need for HR professionals to leverage data-driven insights for developing effective talent retention strategies.
Monitoring key retention metrics is essential for making informed decisions that help organizations retain top talent. These metrics offer valuable insights into workforce trends and play a critical role in staying competitive. As we move into 2025, here are ten retention metrics every HR leader should be focusing on.
#1 Employee Turnover Rate
The employee turnover rate remains the cornerstone of retention analytics. This metric measures the percentage of employees who leave an organization over a specific period, providing a broad overview of workforce stability.
Calculation: To calculate the employee turnover rate, you’re essentially looking at how many people left your company compared to how many people you employed, on average, during a given period. Here’s how it works:
You start by taking the number of employees who left during the year—let’s say it’s 20 people. Next, you look at the average number of employees during that same period. If you typically had about 200 employees throughout the year, that’s your average.
To get the turnover rate, you simply divide the number of people who left (20) by the average number of employees (200). This gives you 0.1. Finally, multiply by 100 to turn that into a percentage, which in this case is 10%.
So, if 10% of your workforce left over the course of the year, you’d have a 10% turnover rate. Comparing this rate with industry standards can give you an idea of whether your retention efforts are on track or need improvement.
Target: For 2024, the average employee turnover rate across industries remains varied, with some sectors continuing to see significantly high turnover rates. Here are some updated statistics:
- Leisure and Hospitality: Between January and April 2024, nearly 3 million people left their roles in the leisure and hospitality industry, which is 204% above the national average quit rate. This sector has faced persistent challenges in retaining employees, largely due to demanding work environments, lower wages, and limited career growth opportunities compared to other industries, (2)
- Technology: The tech industry continues to face high employee turnover, with rates estimated at 13.2% according to some research, while other studies suggest it could be as high as 18.3%. The frequent changes in workforce are attributed to factors such as competitive job markets and burnout. (3)
- Construction: In the construction industry, the average turnover rate is around 21.4%, with younger employees (24 and under) experiencing much higher rates, reaching up to 64%. High turnover in this sector is often linked to increased injury rates, highlighting the need for better retention and safety practices. (4)
- Retail/Wholesale: For retail, turnover statistics can fluctuate, but the average rate for hourly in-store employees is reported as high as 75.8%. Even accounting for seasonal employment, turnover still exceeds 60%, driven by stressful work environments and limited career progression. (5)
- Healthcare: The healthcare sector also sees considerable variation in turnover rates, ranging from 19.5% at hospitals to 65% for at-home care providers, and an alarming 94% in nursing homes. Long hours, demanding schedules, and the physically active nature of these roles contribute to the high attrition rates. (6)
Practical Application: Regularly compare your turnover rate against industry benchmarks. If your rate exceeds the average, it’s time to dig deeper into the underlying causes and develop targeted retention strategies.
#2 Voluntary vs. Involuntary Turnover
Breaking down turnover into voluntary (employee-initiated) and involuntary (employer-initiated) categories provides more nuanced insights into retention challenges.
Analysis: A high voluntary turnover rate often indicates issues with employee satisfaction, engagement, or perceived lack of growth opportunities. Conversely, a high involuntary turnover rate might suggest problems with hiring practices or performance management.
Action Steps: If voluntary turnover is high, consider conducting exit interviews to understand the primary drivers. Use this information to inform improvements in areas such as workplace culture, compensation packages, or career development programs.
#3 Retention Rate
The retention rate is the flip side of turnover, measuring the percentage of employees who remain with the organization over a given period.
Benchmark: According to Peoplebox, a 50% retention rate is generally considered low, indicating that half of the workforce is leaving within a specific time frame. While this may be acceptable in industries with high turnover, most organizations should aim for a retention rate of 90% or higher to ensure stability and reduce the ongoing costs of recruitment and training. (7)
Strategic Implications: A consistently high retention rate can be a strong indicator of employee satisfaction and a positive workplace culture. However, be cautious of extremely high retention rates, as they might indicate a lack of fresh perspectives or potential stagnation.
#4 Time to Fill
This metric measures the average time it takes to fill a vacant position, impacting both productivity and retention.
Calculation: When calculating the average time it takes to fill a position, the formula is simple: take the total number of days it took to fill all positions, and divide that by the number of positions filled. This gives you a clear picture of how efficient your hiring process is.
Total days to fill all positions / Number of positions filled.
For example, if it took 120 days to fill 6 positions, the average time to fill a position would be 20 days. Tracking this metric helps identify bottlenecks in the recruitment process, ensuring smoother and quicker hires in the future.
Goal: The Society for Human Resource Management (SHRM) suggests an average time to fill of 42 days across industries. (8)
Optimization Strategies: A prolonged time to fill can lead to increased workload for existing employees, potentially impacting morale and retention. Consider streamlining your recruitment process, building talent pipelines, or implementing employee referral programs to reduce this metric.
#5 Cost Per Hire
Understanding the financial impact of turnover is crucial for making data-driven HR decisions and justifying investments in retention initiatives.
Insight: According to B2B Reviews, the average cost of hiring a new employee is $4,683, meaning businesses typically spend nearly $4,700 each time they bring in a new hire. However, this number can vary significantly based on several factors, including the skill level required for the role, the length of the recruitment process, and the time it takes to onboard and train the employee. Higher-skilled positions or more drawn-out hiring processes tend to drive this cost up.
ROI Analysis: Use this metric to calculate the potential savings from improved retention rates. This data can be powerful when advocating for resources to implement new retention strategies or enhance existing ones.
#6 Employee Satisfaction Score
Regularly measuring employee satisfaction can help predict and prevent turnover by identifying areas of discontent before they lead to resignations.
Method: Utilize standardized surveys like eNPS (Employee Net Promoter Score) or custom questionnaires tailored to your organization’s unique culture and goals.
Target: Aim for consistent improvement in satisfaction scores quarter-over-quarter. Pay particular attention to trends in specific departments or demographic groups.
Actionable Insights: Use survey results to inform targeted improvements in areas such as work-life balance, professional development opportunities, or management practices.
#7 Diversity Retention Rate
In an era of increasing focus on diversity, equity, and inclusion (DEI), tracking retention rates across different demographic groups is essential for building and maintaining a truly inclusive workplace.
Benchmark: Compare retention rates across different groups to identify any disparities that may indicate systemic issues or unconscious biases in your organization.
DEI Strategy: Use this data to inform and refine your DEI initiatives, ensuring that your workplace is not only diverse in its hiring practices but also in its ability to retain and develop talent from all backgrounds.
#8 High Performer Turnover Rate
Losing top talent can significantly impact organizational performance, making this a critical metric for HR leaders to monitor closely.
Goal: Strive for a lower turnover rate among high performers compared to the overall workforce. Any increase in this rate should trigger immediate investigation and action.
Retention Tactics: Consider implementing targeted retention strategies for high performers, such as personalized development plans, mentorship programs, or performance-based incentives.
#9 New Hire Retention Rate
This metric helps evaluate the effectiveness of recruitment and onboarding processes, which are crucial for long-term retention.
Target: According to the Brandon Hall Group, organizations with a strong onboarding process improve new hire retention by 82%. (9)
Onboarding Optimization: Use this data to refine your onboarding process. Consider extending onboarding beyond the first few weeks to include regular check-ins and support throughout the first year of employment.
#10 Promotion Rate
Internal career growth opportunities significantly impact retention, making this an important metric to track and optimize.
Insight: An SHRM study found that employees who were promoted within three years of being hired had a 70% chance of staying with the company. (10)
Career Development Initiatives: Use this metric to assess the effectiveness of your internal mobility programs. Consider implementing clear career pathing, skills development programs, and internal job posting systems to improve this rate.
What’s Next?
As we look ahead to 2025, HR leaders must harness these retention metrics to make informed decisions about talent management. However, it’s important to remember that these metrics are tools, not solutions in themselves. The real value comes from the actions you take based on the insights these metrics provide.
Regular analysis, coupled with a willingness to adapt and innovate, will be key to navigating the landscape of talent retention in the years to come.
For HR leaders looking to take their retention strategies to the next level, consider partnering with experts who can help you interpret these metrics and develop tailored solutions. York and Columbus, led by industry veteran Bryan Allen, offers specialized HR advisory services designed to optimize your workforce management practices and drive sustainable organizational success.
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