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North American employee turnover: trends and effects

     
January 29, 2020

As an HR professional, you know that managing various types of employee turnover is an essential part of your annual strategy. Not only that, but it’s also one of the fundamental components of short- and long-term organizational success, regardless of your industry or location. North American workforce turnover is often inevitable, unpredictable, and comes in many forms, making it difficult to anticipate. With all of these factors at play, the only way to truly reinforce your talent retention strategy is by being prepared — and the best way to be prepared is to be informed.

The 2019 North America Mercer Turnover Survey will give you a comprehensive overview of some of the most prominent workforce trends among the American and Canadian organizations who participated in it. With these insights, get a head start on your competition — see what’s happening throughout top organizations regarding staffing and workforce retention issues, explore employee turnover rates by industry and location, understand common reasons for voluntary turnover, and much more.

Organizational turnover insights for the US

Full-time equivalent and total headcount trends

Survey participants were asked to provide numerical data regarding their full-time equivalents and total organizational headcounts. This salary period was one of consistent workforce growth, with more than half of all organizations throughout the US indicating an increase of full-time equivalents and total headcount. Findings revealed that:

  • 53% of American organizations indicated an increase in full-time equivalents during the survey period.
  • 63% of American organizations indicated a total headcount increase throughout the survey period.

For the majority of organizations who reported an increase in employees, the average increase in full-time equivalents was 5.7%, with similar numbers reported for headcount increases. Meanwhile, for the organizations who reported a decrease in employees, the average decrease in full-time equivalents was -4.2%. and -5.6% in headcount reductions.

US companies had an average turnover rate of 22%* throughout the survey period regarding total separations, which is the combined number of voluntary separations, involuntary separations, and retirement-based separations. The retail and wholesale industry saw the highest average voluntary turnover rate.

The US employee turnover trends by region

Employee turnover rate data was segmented to reflect various geographic areas to determine separation trends or patterns at a regional level. The following findings highlight which regions boasted the highest and lowest total employee separation:

  • The national average for total separations was 20.1%.
  • The South Central region had the highest total separation rate at 43.2%.
  • The Northeast region had the lowest total separation rate at 20.8%.

Leading causes of workforce turnover in the US

Sixty-three percent of organizations responded that they keep track of the reasons why their employees left. As a result, most were able to shed light on the top reasons for their voluntary turnover, providing many insights in the process.

Fifty-four percent of employees voluntarily leaving organizations were Millennials/Generation Y (born 1978-1998), with better job opportunity being the most common reason for leaving.

Turnover prevention practices

Strong employment numbers imply that the labor pool available to organizations to replace staff members who leave is diminishing. This leads us to believe that organizations need to improve not only hiring practices, but also improve employment retention rates.

Sixty-one percent of organizations surveyed have practices and solutions in place to try to prevent employees from wanting to leave. The majority of these organizations are also not relying on just one practice, but are engaging in multiple efforts to keep the employees they want to keep. The two most prevalent employee retention practices are continuous compensation reviews and regularly looking at engagement.

Organizational turnover insights for Canada

Full-time equivalent and total headcount trends

Participants in the Canadian survey were also asked to provide numerical data regarding their full-time equivalents and total organizational headcounts. Canada saw similar workforce growth to the US during this salary period, with more than half of all organizations indicating an increase of full-time equivalents and total headcount. Findings revealed that:

  • 51% of Canadian organizations indicated an increase in full-time equivalents during the survey period.
  • 59% of Canadian organizations indicated a total headcount increase throughout the survey period.

For the majority of organizations who reported an increase in employees, the average increase in full-time equivalents was 6.5%, with similar numbers reported for headcount increases. For the organizations who reported a decrease in employees, the average decrease in full-time equivalents was -10.4%, and -9.9% in headcount reductions.

Canadian companies had an average turnover rate of 21%* for total separations, with some strikingly similar parallels to the US results. But unlike the US, the High Tech industry saw the highest average voluntary turnover rate.

Leading Causes of Workforce Turnover in Canada

Similar to 63% of US organizations, 57% of Canadian organizations who participated in the survey keep track of the reasons why their employees left. In the US, relocation was the third highest reason for why employees left, while in Canada the third highest reason was a better base salary.

Some of the most prevalent secondary reasons given for voluntary turnover included issues related to fit with job, career change, job satisfaction, and lack of work/life balance.

Similar to the US, the majority of employees voluntarily leaving organizations were Millennials/Generation Y (56%), with better job opportunity also being their main reason for leaving.

Voluntary turnover prevention practices

Similar to the US, over half of organizations surveyed (55%) have practices and solutions in place to try to prevent employees from wanting to leave. The majority of these organizations are also not relying on just one practice, but are engaging in multiple efforts to keep the employees they want to keep. The two most prevalent talent retention practices in Canada are the same as the US — continuous compensation reviews and regularly looking at engagement.

Want more insight managing employee turnover?

The 2019 North America Mercer Turnover Survey features data from 198 organizations in the US and 69 in Canada. It’s a robust source of information on turnover rates by industry, employee group, job function, and region. You’ll be able to analyze your company’s own voluntary turnover, involuntary turnover, and retirement turnover statistics by a number of variables, such as industry, organizational size, and generational factors. Then, compare it to overall market standards or your peers and competitors to optimize your current and future strategies.

For more in-depth data on this essential topic, consult the US Mercer Turnover Survey or the Canada Mercer Turnover Survey.

*Note that turnover for “all employee” groups may differ from the data provided in the “Separations at the Organization Level” section due to varying levels of information available to each participant.