Thirty-three percent of U.S. hiring managers believe employee turnover will increase at their company in 2024, leaving a financial impact and burdening remaining employees, according to a Feb. 28 report from Express Employment Professionals and The Harris Poll.
Among those who anticipate higher turnover, hiring managers pointed to top reasons such as better pay or benefits elsewhere (38%), increased workplace demands (35%), employees resigning (33%), employee feelings of being overworked (31%) and a competitive job market (26%).
“High turnover in the booming jobs market of the past few years has led to a strained workforce that is stressed and burned out,” Bill Stoller, CEO of Express Employment International, said in a statement. “With data showing more employees are remaining in place, now is the perfect time to create retention tactics to stabilize headcount with top talent.”
In the November survey, 1,007 U.S. hiring decision-makers said turnover cost their companies an average of $36,295 annually in lost productivity and rehiring costs. More than 20% said that number climbs to $100,000 or higher for their company.
In addition, hiring managers pointed to other reasons for turnover in 2024, including employees being terminated, better perks being offered elsewhere, such as summer Fridays or unlimited vacation days, employees retiring and a better company culture elsewhere.
Turnover takes a toll on their company, hiring managers said, as well as remaining employees. About 73% said employee turnover burdens existing employees.
To counteract turnover and potentially give reprieve to employees, 88% of hiring managers said they were making plans to hire in 2024 — an increase from the 81% of hiring managers who said the same in 2022 about hiring plans in 2023. Hiring managers said their hiring plans were intended to either increase employee count (45%) or maintain the same level of employees (36%).
Other research agrees that employers may face more worker turnover during the first half of 2024. According to research from management consulting firm Eagle Hill, the trend may be driven by dips in worker confidence about organizational stability and leadership, as well as lower satisfaction with workplace experience.
During the fourth quarter of 2023, HR leaders’ optimism around retention and employee engagement also had declined, according to a report from The Conference Board. For 2024, their main human capital management priorities were employee experience, organizational culture and development of leadership and workforce capabilities.
Employee retention has become a top priority for both operations and HR, even surpassing revenue or sales growth for some companies, according to a Gallagher report. To increase retention, employers are focusing on compensation, total rewards and the employee experience, including diversity, equity and inclusion efforts.