Are Your Employees Leaving? Here’s How to Stop Them

In September, the national unemployment rate fell to 3.7 percent, its lowest level since 1969, and remained unchanged the following month, according to the US Labor Department. The Bureau of Labor Statistics recently reported more good news: Roughly 250,000 jobs were created in October. Among them were 36,000 jobs in healthcare; 30,000 in construction; 25,000 in transportation and warehousing and 42,000 in leisure and hospitality.

Ironically, the soaring job growth and strong confidence in the labor market has produced an HR conundrum: employees are changing jobs at a record pace. The country’s rate of total workplace turnover recently hit an all-time high–a whopping 19.3 percent–rising nearly a full percentage point from 2017 and more than 3.5 percentage points since 2014, based on a recent survey report by

The report reflects responses from nearly 25,000 organizations across industries that mostly support between 1,000 and 5,000 employees. Not surprisingly, the industry with the highest turnover is hospitality (31.8 percent) followed by healthcare (20.4 percent) and manufacturing and distribution (20 percent). The lowest turnover rates were reported by utilities (10.3 percent), insurance (12.8 percent) and banking and finance (16.7 percent).

Areas of the country with the highest turnover include South Central (20.4 percent) and the West (20.3 percent), while the Northeast had the lowest rate of total turnover in the country (17.3 percent).

“We’ve been testing the market for a long time [regarding] turnover,” says Greg Wolf, managing principal for the Compdata survey and consulting practice at “This was fairly predictable.”

Over the next several years, Wolf says, he would be “shocked” if turnover rates stopped climbing because they’re so widespread. In the meantime, he says the real cost of employee turnover is resonating with more organizations, pushing them to explore creative retention strategies to sustain themselves from a competitive standpoint.

“More employers are understanding they need to get a handle on this if they’re going to remain viable,” says Wolf, adding that some are still catching up after slowing down pay increases and cutting benefits during the economic downturn. “They’ve got to go back to the fundamentals they let slip.”

Focus on Culture, Managers and Rewards

One approach for reducing turnover is to maximize total rewards, says Larry Inks, clinical associate professor of management and HR in the Fisher College of Business at Ohio State University.

He says he knows of at least one company that gives employees a free tattoo–or the cash equivalent–every year. He says HR must focus on employees’ need and why they stay to build the company’s brand and convince workers that the “grass is still greener on their side of the fence.”

Then publicize these rewards on social media, in company newsletters or via other forms of communication, he says, adding that employers must also make them so compelling that employees boast about them both at and away from work.

While salary bumps can be effective, not every organization has that option. Besides, Inks says, pay raises have a short shelf life as an employee-retention strategy. He believes turnover is more likely the result of a company’s inferior culture, weak management or offering similar rewards and recognition to both top and weaker performers.

“There’s no magic formula,” Inks says. “It’s like martial arts. If you have to think about when you need to do this, you’re not good enough. It should come natural … and be an essential part of your culture.”

Money Isn’t Everything

Mary Ann Sardone, leader of Mercer’s North America workforce rewards practice in Atlanta, says many of her clients are experiencing high turnover rates. She says some employees leave because there aren’t clear or established career paths or opportunities for advancement.

“Their employers haven’t made it clear what other opportunities are within their business unit, functional area or across the company, even in different geographical areas,” she says. “Companies are really trying to develop programs and provide information that help employees explore [internal] career options.”

Likewise, HR professionals must also ask tough questions. Is your company’s basic compensation and core benefit programs competitive enough to retain your best workers? Some are simply following the pack regarding core compensation, she says, instead of strategically investing in parts of the business where the talent pool must grow or expand and be retained.

Other organizations are modernizing their wellbeing benefits portfolio to better meet individual employee needs at different career or life stages. Sardone says two emerging benefits are student loan repayments and coverage for fertility treatments.

“We’ve seen a huge uptick in companies re-examining their total rewards portfolio and better understanding the needs of individuals through preference surveys or expanded engagement surveys,” Sardone says. “To be successful, really get to the heart of employees’ needs and then act on it before they walk out the door.”

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Carol Patton
Carol Patton is a contributing editor for HRE who also writes HR articles and columns for business and education magazines. She can be reached at