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North American Employee Turnover: Trends and Effects

     
April 17, 2018

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

Here, you’ll discover a comprehensive overview of some of the most prominent workforce trends among the 200+ American and Canadian organizations who participated in the most recent North America Mercer Turnover Survey. With these insights, get a head start on your competition — see what’s happening throughout top organizations regarding staffing and retention issues, explore employee turnover rates by location, understand common reasons for voluntary turnover, and much more.

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. As it turns out, 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:

  • 68% of American organizations indicated an increase in full-time equivalents during the survey period.
  • 68% 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 10%, 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 -5% for the US. Again, similar numbers were seen in headcount reductions.

Regarding total separations (the combined number of voluntary separations, involuntary separations, and retirement-based separations) US companies had an average 22% turnover rate* throughout the survey period. Looking at this by type of turnover we find that:

  • Voluntary turnover accounted for 16% of total separations.
  • Involuntary turnover accounted for 6% of total separations.
  • Retirements accounted for 1% of employee turnover in the US.

The US Employee Turnover Trends by Region

Taking this a step further, the turnover 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 23%.*
  • The Southeast region had the highest total separation rate at 42%.
  • The South Central region had the lowest total separation rate at 34%.

Leading Causes of Workforce Turnover in the US

When asked, the majority of organizations responded that they did 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.

The top-listed US reasons why employees left their organizations during the surveyed time period were:

  • Personal/Family (57%)
  • Promotion Opportunity (35%)
  • Career Change (27%)
  • Base Salary (24%)
  • Job Satisfaction (24%)

There were many other causes listed by participants as reasons for workforce turnover, but none of them were ranked as primary reasons. These secondary reasons included: issues related to benefits, fit with the organization or the job, and relationship problems with direct supervisors or managers.

For both the US and Canada, Generation Y (the millennial generation) was the most likely to voluntarily leave.

Participants were also asked to provide data on their voluntary turnover rates based on generation. For the US, Generation Y (the millennial generation) was the most likely to voluntarily leave. Following behind millennials was Generation X and then baby boomers.

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:

  • 56% of Canadian organizations indicated an increase in full-time equivalents during the survey period.
  • 56% 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 7% for Canada, 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 -8%. Again, similar numbers were seen in headcount reductions.

Looking at data regarding total separations (the combined number of voluntary separations, involuntary separations, and retirement-based separations) Canadian companies had an average 20% employee turnover rate* for total separations. Breaking up the three individual causes of total separation, there were some strikingly similar parallels to the US results:

  • Voluntary turnover accounted for 12% of total separations in Canada.
  • Involuntary turnover accounted for 7% of total separations.
  • Retirements accounted for 1%, down from 4% reported in the prior year.

Leading Causes of Workforce Turnover in Canada

As we found in the US, when asked, the majority of Canadian organizations keep track of the reasons why their employees left. As a result, most were able to provide insight into the top reasons for their voluntary turnover. The top-listed reasons why employees left their organizations during the surveyed time period were:

  • Personal/Family (40%)
  • Promotion Opportunities (36%)
  • Base Salary (32%)
  • Lack of career/training opportunities (24%)

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.

Looking at turnover rates based on generation, again it was found that Generation Y (the millennial generation) was the most liable to voluntarily leave followed by Generation X and then baby boomers (in that order).

Want More Help Managing Employee Turnover?

Featuring data from over 150 organizations in the US and over 60 in Canada, the 2018 North America Mercer Turnover Survey is 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 data on this complex, yet essential aspect of human resources management, 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.