Seeing a spike in your company's turnover is liable to cause a spike in your blood pressure. No one wants their business to be a revolving door.
One thing that helps: arming yourself with insights. Once you have the data to anticipate turnover, you can act to retain key employees and recruit new ones ahead of time. It’s the difference between constantly reacting and proactively planning.
Recently, LinkedIn shared how turnover rates vary across different functions, revealing, for example, that people in HR roles had the highest turnover rates (14.6%), while folks in administration had the lowest (7.8%).
Today, we take another look at turnover rates, this time through the prism of the company itself. For instance, small and midsized businesses (SMBs) have a turnover rate of 12.0% — significantly higher than the overall average rate of 10.6%. Meanwhile, enterprises boast a lower turnover rate of 9.9%.
The disparities get even wider when we look at industries. Read on to see which sectors feel like a rapidly revolving door — and which feel more like a tame merry-go-round in comparison.
Industries with high employee turnover: professional services deal with the most churn
The industry with the highest turnover rate, according to LinkedIn data, is professional services — a sector that includes companies like the Big Four accounting firms, as well as business and IT consulting organizations.
As a recent story in Fast Company illustrates, turnover is nothing new for the accounting industry — but it is reaching new highs. “Our industry is set up to burn people out,” Jeff Phillips, founder of Accountingfly, told Fast Company. “But over the last decade, it had gotten to its max peak — before we even hit the pandemic. Now it’s gone through the roof.”
Along with burnout, the article also suggests stagnating compensation as a reason many people are leaving. Companies seem to agree — KPMG recently announced they were going to raise salaries for about 30,000 employees.
The tech and media industry saw the second-highest turnover rate at 12.9%. Workers with tech skills remain in high demand, and employees in engineering roles have an above-average turnover rate.
Surprisingly, some tech companies might actually welcome higher turnover rates, as recent reports suggest that some leaders are growing concerned about productivity relative to their number of employees.
The other top industries with above-average turnover —entertainment, accommodation, and retail — all rely heavily on an in-person workforce of frontline employees. These workers have been in high demand lately and are pushing for higher pay and more training opportunities, according to a recent survey.
As LinkedIn’s chief economist Karin Kimbrough told us back in October, “For in-person roles during COVID, there’s an added element of wanting to be compensated for a perceived risk. . . . Companies would be remiss if they didn’t consider whether they can improve compensation in those cases.”
Since then, the pressure to boost compensation has only increased as inflation has spiked worldwide. Whether your employees are consultants, engineers, or frontline workers, they may be eager to improve their compensation — and there’s a growing sense that jumping ship is the best way to do that.
Work flexibility has also continued to be a very high priority for candidates, and could be a key lever in reducing turnover. In the U.S., remote jobs attract over 50% of applications on LinkedIn, despite representing less than 20% of all paid job posts — a clear sign that many candidates and employees are looking for flexible work arrangements, whether at their current company or at a new employer. In fact, Spotify recently saw its turnover drop after allowing employees to work from anywhere.
In other words, if you're looking to reduce turnover, improving compensation and expanding work flexibility may well be effective approaches.
Industries with low employee turnover: government workforces have been the most stable
Government organizations saw the least amount of turnover, with a rate of just 8.4% compared with the overall average of 10.6%. The sector includes a wide range of government work, from law enforcement and firefighting to international affairs and urban planning.
As an analysis from the Federal Reserve Economic Data (FRED) demonstrates, low turnover in government jobs is nothing new — at least in the United States. The FRED analysis found that “private employees quit their jobs three times more frequently than government employees do.”
Despite the low turnover rates, some governments have taken concrete steps to retain employees and reduce burnout — public workers in Belgium, for example, now have a legal right not to answer work emails after hours.
Interestingly, many of the other industries with below-average turnover — namely construction, transportation, and manufacturing — also rely on in-person talent, just as many high-turnover industries did.
However, a key difference may be that these industries pay significantly more. According to the U.S. Bureau of Labor Statistics (BLS), the average weekly wages for employees in construction are roughly $1,350, trailed by manufacturing ($1,250)and transportation ($950).
That’s about twice as high as the average weekly wages in entertainment ($650), accommodation ($500), and retail ($700). While LinkedIn’s turnover data is global, rather than U.S.-only like the BLS data, it may still suggest a relationship between higher pay and lower turnover for in-person work.
Final thoughts
Whether it’s welcome or worrying, high turnover can cause confusion, swirl, and frantic fire drills for talent professionals. The right insights can help you mitigate those problems, improve retention, and attract more of the talent you need. By seeing how you stack up against global benchmarks, you can get a better sense of where you stand and inform your next steps.
*Photo by Susan Q Yin on Unsplash
Methodology
In conversation, attrition and turnover are often used interchangeably — but as technical terms in workforce planning, they often have distinct definitions.
For many in talent analytics, attrition happens when an employee leaves (for whatever reason) and their vacancy isn’t intended to be filled. Turnover, on the other hand, happens when an employee leaves voluntarily and the employer needs to fill that vacancy with a new hire. The distinction often rests on that employer’s intention — whether to fill the vacancy or eliminate it altogether.
However, this data doesn’t allow us to see whether a company intends to fill a vacancy or not after someone leaves. In LinkedIn Talent Insights and in this analysis, attrition is defined as “the number of professionals who departed the company in the past 12 months divided by the average number of employees during this period.” That’s precisely the calculation many professionals use to define turnover. For that reason, we use turnover and attrition interchangeably in this analysis.
Data in this story represents activity on LinkedIn’s platform from July 2021 to June 2022. The turnover estimates may be below actual turnover, due to a possible lag between the time someone leaves a company and when they update their LinkedIn profile to reflect that departure.
We consider professionals as leaving their position if they provide an end date for their position at a company (excluding internal job changes within the same company). A member can have multiple departures and positions within the year period. We’ve also excluded contractors and other employees who are not full time (interns, students, etc.), along with any positions that start and end on the same date.
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