Employee Retention Statistics You Should Know In 2025

What Are The Key Employee Retention Stats For 2025?

Employee retention is a critical issue for most businesses. When you devote time and resources to finding and recruiting new employees, the last thing you want is for them to make a quick exit. Unfortunately, that is often the case, with an onboarding study revealing that 31% of employees quit their jobs before six months pass. This article looks into employee retention stats that shed light on the current state of employee retention and the reasons that drive employees to leave or stay at a job. After we look into the numbers, we will share strategies businesses can implement to improve employee retention rates.

Several factors can affect a new hire’s desire to commit to their new job, most of which relate to the conditions employees encounter in their new workplace. Issues such as poor management, a lack of opportunities for advancement and development, compensation problems, or job insecurity can contribute to employee dissatisfaction. In 2024, nearly half of employees (46%) reported that they were considering quitting their jobs. Such a mass exit would not only result in the loss of valuable institutional knowledge but also huge expenses, as replacing an exiting employee can cost anywhere from 30% to 400% of their annual salary.

What’s Inside This Guide…

What Is Employee Retention?

When we talk about employee retention, we refer to an organization’s ability to keep its employees. It is represented by a simple statistic of the people who stayed with the company over a specific period versus those who left. For example, an annual retention rate of 80% means that the company retained 80% of its employees during the previous year, while the remaining 20% left. Though it is normal for some employees to leave their positions for various reasons, such as to pursue a different professional opportunity, take a health-related leave, or retire, organizations must try to keep retention rates high. In general, it is advisable to aim for a retention rate of over 90%.

Additionally, you can view employee retention not just as a statistic but as the comprehensive strategy an organization implements to ensure its workforce remains satisfied and engaged. Losing an employee can have many negative effects on a company, leading to unexpected expenses, the loss of valuable skills and knowledge, a dip in productivity, and more. At the same time, high turnover rates can impact company culture, making it harder for employees to build relationships, develop effective collaboration, and maximize their performance.

Why Employee Retention Is Important

Let’s take a closer look at some stand-out factors that make employee retention significant for companies seeking success.

Higher Retention Means Lower Overall Costs

The costs of high turnover rates are too high to ignore. Earlier, we mentioned that onboarding new employees to replace those who have resigned can cost 30–400% of their annual salary. Let’s break this down to different seniorities:

• Entry-level employee replacement costs 30–50% of their annual salary.
• Expenses for mid-level employee replacement can rise to 150% of their annual salary.
• High-level/highly specialized employees is where replacement costs hit a peak, reaching up to 400% of their annual salary.

Apart from onboarding, these costs include training newcomers to bring them up to speed with the company and ideally reach the proficiency and productivity levels of their predecessors. When employee turnover is high, organizations have to allocate more of their budgets to fill their positions. On the contrary, high retention rates mean that less money has to be spent on training, allowing more resources to be directed toward employee development initiatives.

Enhances Company Culture

High employee retention rates can be beneficial to company culture in various ways. The most important thing to remember is that the longer employees stay with a company, the more likely they are to understand and align themselves with the company’s values. This fosters consistency across an organization, with more employees adopting a common code of conduct and communication. As a result, the work environment becomes more pleasant and efficient, motivating employees to not only continue their professional journey with their current employer but also strive to improve their performance. Besides, culture has been identified as one of the top three factors that affect retention rates, transforming it into a priority for business leaders.

Improves Brand Reputation

Satisfied employees are willing to share how content they are with their work environment either through word of mouth or social media platforms. This is important because it’s not only company executives and the HR department who care about employee retention rates; job seekers are also interested in how successful companies are in retaining their employees. In fact, it carries great significance when they apply for a position or consider a job offer. This is because low turnover rates signal a positive work environment with an engaged workforce, immediately making the company an attractive employer for potential employees and enhancing its brand reputation.

Fosters High Employee Morale

You shouldn’t neglect the effect frequent employee exits may have on employee morale. Employees who leave their positions create knowledge gaps in the company and leave a considerable workload that the remaining employees must pick up. This situation is aggravated when multiple employees leave at once, making it difficult for the company to hire replacements before there are breakdowns in productivity. The loss of colleagues and increased responsibilities can impact employee morale, leading to decreased performance and even burnout. Not to mention that conversations before an exit may prompt more employees to explore new job opportunities. By prioritizing employee satisfaction, companies can prevent this domino effect and improve retention rates.

Increases Employee Productivity

Building on the previous point, the fact that each department has the required number of employees and there are no sudden changes immediately puts your company in a position to be productive and efficient. However, there are several extra reasons why employee retention positively affects productivity. The longer an employee stays with a company, the more knowledge and skills they accumulate, thus handling their responsibilities more effectively. Additionally, teams that have worked together for a long time communicate and collaborate better, increasing their chances of successfully completing projects or tackling unexpected challenges. When a new member enters the team, they need time to acclimate and establish relationships with their coworkers, which can affect overall productivity.

Frees Up Time For HR

Employee departures burden the HR department with numerous additional tasks. Specifically, they are responsible for taking care of paperwork, conducting exit interviews, scheduling final payments, and transferring responsibilities, among others. And when all that is done, they need to initiate a recruitment process to fill the now-vacant position. All of these tasks require a significant amount of time, which the HR department could otherwise use to enhance employee retention efforts, organize team-building activities, support each employee’s personal development plan, and more. Therefore, successfully engaging your workforce enables your organization to operate more efficiently by allowing employees to focus on impactful and strategic tasks instead of scrambling to cover for or replace employees who have left.

Optimizes The Customer Experience

The final benefit of high employee retention that we will explore is improved customer satisfaction. Frequent changes in your company’s organizational structure can also have a negative impact on customers, who constantly have to deal with different representatives, making it difficult to establish trust and rapport. Simultaneously, new employees may take time to offer satisfactory customer service, as they are not as familiar with your company’s products and services as well as the specific needs of customers. As a result, high employee retention will optimize the customer experience by connecting them with experienced and knowledgeable representatives who know how to respond to each customer with effective solutions to their every problem and need.

Current State Of Employee Retention

Employee retention is a particularly significant issue not only for businesses but also for our society as a whole. Following the crisis of COVID-19, the Great Resignation of 2022 sent the labor market into a spiral, affecting entire economies. As a result, 88% of businesses are concerned about employee retention, as the Workplace Learning Report 2025 states, leading them to carefully monitor retention levels and take the necessary measures to increase employee satisfaction and engagement and, in turn, reduce turnover rates.

Let’s look at a few employee retention stats that will give us a better idea of its current state:

• Data shows that resignation rates in the United States are back to pre-pandemic levels. Specifically, the historic high of 2.7% of the total workforce that quit during April 2022 has come down to a stable 2% in February 2025.
• Another interesting fact is that the labor market is more adaptable to the needs of job seekers. In other words, 52% of professionals searching for a new job believe that they, not employers, have the upper hand in the modern labor market.
• The same study revealed that 78% of job seekers believe their salary will increase by switching jobs rather than staying loyal to one employer.
• A concerning statistic about employee retention indicates that 4% of full-time employees are planning to leave their jobs in 2025. Notably, this is something that they have been considering for over a year.
• Finally, another thing worth mentioning about the current state of employee retention is that median employee tenure numbers are dropping. Specifically, in January 2024, tenure for men decreased from 4.3 to 4.2 years compared to January 2022. Similarly, tenure for women decreased from 3.8 to 3.6 years in the same period. Median tenure remains longer for older members of the workforce, as employees aged 55–64 have a tenure of 9.6 years compared to 2.7 years for employees aged 25–34.

Key Employee Retention Statistics To Know For 2025

General Retention Statistics

As 2025 quickly unfolds, there are several employee retention stats that you need to keep in mind.

Employers Realizing The Significance Of Employee Retention

Many businesses are seeing the significance that employee retention carries for organizational success. In fact, a recent study conducted by Fortune Magazine revealed that 87% of employees viewed strategies for increasing employee retention as a high priority for their organizations.

Resignation Levels Remain High

And there is a good reason for that, as data from the Bureau of Labor Statistics show that annual quit levels have been rising since before the pandemic-induced “Great Resignation.” Specifically, 40.3 million employees quit in 2018 and 44.1 million the following year. While resignations decreased in 2020 (35.9 million), numbers climbed to 47.5 in 2021 and 50.5 in 2022. The situation seems to be finally balancing out, but 2024 ended with a total of 39.2 million quits.

Cost Of Employee Turnover Is High

It is essential that employers take measures, as high employee turnover causes several expenses. On the one hand, each departure costs about one-third of an employee’s annual salary. On the other, businesses that are losing employees at an unhealthy rate are 23% less profitable than those with high engagement and retention rates.

Exploring Why Employees Leave

What are the factors that have pushed and continue to push employees to seek different professional opportunities? The following information can shed some light on this subject:

• Lack of advancement opportunities is a major issue for most employees, ranking as an important reason to quit their job for 82% of them.
• On a similar note, 76% of employees reported that they are on the lookout for job opportunities that will help them expand their careers.
• A study by Visier revealed that as many as 89% of employees have experienced burnout, and 70% of them would consider leaving their current job.
• Employ­ees who feel that their work and accomplishments are not rec­og­nized are twice as like­ly to leave their com­pa­ny.
• Data shows that bad leadership is the cause behind 50% of resignations.
• In their 2024 Retention Report, the Work Institute identified the most commonly avoidable causes for resignations, which included health and family issues (12.3%), work-life balance (11.9%), job-related problems (9.8%), relocation (9.1%), and total rewards (9.1%).

Exploring What Convinces Employees To Stay

In addition to the reasons that push employees to leave, we should also take into account the reasons that motivate them to stay.

• Good onboarding matters, leading 69% of employees to remain at their jobs for at least three years.
• Employees value guidance and collaboration in the workplace. As result, data shows that well-designed mentorship programs increase retention by 50%.
• The correlation between high employee engagement and employee retention is undeniable, as engaged employees are 87% more likely to stay at their jobs.
• Good leadership and a consistent exchange of feedback make employees 5 times more likely to stay.
• Another factor that increases employee retention is having a sense of purpose in work. (Tiny­Pulse study)
• 90% of employ­ees are more like­ly to stay with an employ­er that is empa­thet­ic to their needs.
• As flexibility options become more significant for employees, the ability to work from home can decrease turnover by 25%.
• 63% of employees believe that a good work-life balance is a high priority.
• Job stability is a major retention motivator for more than half of employees.

Knowing and understanding what employees are looking for from their jobs can inform your organization’s employee retention strategy and improve its effectiveness.

Strategies To Improve Employee Retention In 2025

Don’t let the employee retention stats that we explored throughout this article discourage you. It is possible to turn the tide around and improve employee engagement and retention in your organization. Here are some strategies you can implement to achieve that.

Make Smart Hiring Choices

Low retention rates may indicate that your initial hiring choices weren’t right. If your recruitment process fails to identify a candidate with the right skills and a mindset that aligns with your company culture, then the odds of a quick exit significantly increase. Another possibility is that you didn’t ask the right questions or scan their resume carefully enough to realize they have a history of frequently changing jobs. While there is nothing wrong with looking for new professional opportunities, whether to pursue personal growth or a better work environment, job hoppers are not ideal if you want to maintain low turnover rates. Instead, you should focus on people interested in achieving stability and development with their employer. Taking these factors into consideration during recruitment will help you make better hiring choices that will result in employees who will stay with your company for a long time.

Support Remote Or Hybrid Work

Flexible work models have become extremely important for employees. More and more of them are seeking jobs that offer remote or hybrid work options to better manage their mental and physical health and maintain a healthy work-life balance. In many cases, the promise of flexible work may influence a candidate’s decision between two job offers. Conversely, a lack of flexibility may drive a long-time employee to search for other opportunities. If your company cannot support remote or hybrid work, there are still ways to enhance flexibility. For example, you can allow employees to adjust their work hours to accommodate family commitments or establish a shorter workday every couple of weeks. Such perks can have a positive impact on employee morale and engagement, ultimately helping to reduce employee turnover rates.

Create An Engaging Onboarding Experience

The first few days and weeks of an employee’s professional journey can have a great impact on their subsequent loyalty to the organization. These early experiences shape their first impression of the workplace, leaving little room for change later on. This onboarding study indicated that of the almost 30% of employees that quit during their first 6 months of employment, 20% leave during their first month, and 17% just after the first week. To combat this, companies must ramp up their onboarding strategies to help newcomers feel welcomed by their co-workers and supervisors, as well as supported enough to perform efficiently. This means scheduling casual meet-ups with colleagues, preparing their workspace, guiding them through their first days at work, discussing personal development plans, and providing resources to help them succeed. Optimizing the onboarding experience will make new hires feel valued and engaged, fostering long-term commitment.

Provide Training Opportunities

Starting a new job can be challenging, especially if the new employee doesn’t receive adequate support from their new environment. While you may hire candidates with the right skills and experience, it’s still essential to introduce them to the specific processes and tools that your company uses. Without this guidance, they might feel uncertain about their performance and take longer to reach the productivity levels of their colleagues. To prevent feelings of exclusion or unpreparedness, you must provide them with training opportunities that match their short- and long-term goals, as outlined in their development plan. This plan should be developed through discussions with the new employee, focusing on their strengths and weaknesses. This approach will ensure that new employees will be able to reach their full potential and bring value to the company.

Improve Employee Engagement

Employee engagement may be the number one factor influencing retention. Engaged employees are more passionate about their work, feel connected to their organization’s purpose, foster stronger relationships with their colleagues, and are thus less likely to consider leaving. But how do you improve employee engagement? There are various steps you can follow, but here are some key points to keep in mind:

• Employees must work on things that interest and inspire them. Make sure their job connects to what they care about as well as organizational objectives.
• The work environment shouldn’t be hectic and stressful. Manage workload and schedule team-building activities to boost collaboration while helping everyone relax.
• Communication among all levels and departments must be honest, effective, and constructive. Optimize communication tools and prevent siloes.
• Finally, show employees that their job has a future and possibilities for growth. Discuss future career plans and provide access to the appropriate training resources.

Reward Hard Work

Another reason that might drive employees to leave is having their hard work and contributions overlooked. It can be particularly discouraging to continuously put in the extra effort and never receive any type of recognition, whether we are talking about verbal praise, an increase in compensation, or a promotion. Companies that want to be successful and create a loyal workforce need to recognize the value that each and every employee brings to the organization and reward them accordingly. For smaller achievements, a word of praise may suffice, but for the accomplishment of bigger goals, such as hitting the annual financial target or lead conversion numbers, you must consider something more tangible, like an extra day off or a bonus. Receiving recognition makes employees feel valued, reassuring them that if they go the extra mile, their efforts will be appreciated.

Prioritize Corporate Culture

A positive trend in the business world in recent years is the increasing focus on company culture. Business leaders are realizing that employees seek more than a fulfilling job and a competitive salary. They also value a positive work environment that they enjoy coming to each day. Corporate culture can differ greatly from company to company, and leaders need to gather feedback from their employees to identify what motivates them the most. Some companies have game rooms or offer daily yoga classes to help employees unwind. Others focus on creating diverse and inclusive work environments or scheduling frequent team-building events. Have honest discussions with your workforce and ask them what they believe your corporate culture is missing. Their suggestions might reveal various issues or gaps within the organization and allow you to make adjustments that will truly make a difference.

Conclusion

Employee retention rates are what sets apart a successful organization from one whose future is looking uncertain. Employees are the backbone of any business, taking on the hard work, coming up with new ideas, holding and passing down valuable skills and knowledge, and driving the business forward through changes and challenges. Continuously losing your employees can damage your business’s productivity and profitability, making it imperative that you take measures to increase employee engagement and, in turn, retention as much as possible.

In this article, we explored the subject of employee retention in depth, looking into its definition and significance and exploring important employee retention stats that reveal insights about its current state as well as the main reasons that contribute positively and negatively to employee retention rates. Additionally, we suggested various employee retention strategies you can implement to make your employees feel more valued and supported and thus increase the odds of them remaining with your company instead of constantly looking for other opportunities.

If you are interested in increasing employee retention rates within your organization and helping your employees reach their maximum potential, take some time to explore the Top Employee Engagement Software options available on the market.