A recent study conducted by Express Employment Professionals and The Harris Poll, published on February 28, reveals a concerning forecast from U.S. hiring managers for 2024. About one-third of them predict an uptick in employee turnover within their companies, attributing the rise to several factors including superior compensation or benefits elsewhere (38%), escalated workplace demands (35%), voluntary resignations (33%), a sense of being overworked (31%), and a fiercely competitive job market (26%).
Bill Stoller, CEO of Express Employment International, notes the strain on the workforce caused by high turnover rates in recent booming job markets, leading to increased stress and burnout among employees. However, he suggests that with more employees now choosing to stay put, companies have a golden opportunity to develop and implement retention strategies aimed at preserving their top talent.
The financial implications of turnover are significant, with the survey indicating an average cost of $36,295 per company annually due to lost productivity and rehiring expenses. For more than 20% of companies, these costs soar to $100,000 or more. Other factors contributing to turnover mentioned include terminations, superior perks elsewhere, retirement, and more appealing company culture in other organizations.
The impact of turnover extends beyond financial aspects, heavily burdening the remaining workforce—73% of hiring managers echo this sentiment. In response, an overwhelming 88% of hiring managers are planning to recruit more staff in 2024 to either expand their workforce (45%) or maintain current employee levels (36%), marking an increase from 81% who had similar intentions for 2023.
Supporting this perspective, additional research from the management consulting firm Eagle Hill suggests that the first half of 2024 might see a continued trend in employee turnover, driven by uncertainties over organizational stability and leadership, alongside diminished satisfaction with the workplace environment.
Moreover, a report from The Conference Board during the last quarter of 2023 observed a dip in HR leaders’ optimism regarding retention and employee engagement. For the upcoming year, enhancing the employee experience, cultivating a robust organizational culture, and developing leadership and workforce capabilities emerge as paramount human capital management priorities.
A Gallagher report underscores employee retention as a crucial focus, even more critical than revenue or sales growth for some businesses. Efforts to bolster retention are centered around competitive compensation, comprehensive rewards, and enriching the employee experience through initiatives in diversity, equity, and inclusion.
