New Glassdoor study reveals the top challenges of employee retention

New productivity tools are enabling HR personnel to support employees and gather feedback much more easily than they could even a few years ago. But according to a study released by Glassdoor, many companies still struggle to move the needle on arguably the biggest benchmark of employee satisfaction: turnover.

The Numbers

The U.S. Bureau of Labor Statistics estimates that the typical American worker will change employers more than 12 times before they turn 50. Glassdoor’s researchers expanded upon the agency’s data in their study by analyzing job changes from about 5,000 resumes that users have submitted to its website. The team found that professionals switch jobs every 15 months on average, with individual stints ranging from as little as 30 days to over 7 years among the sample group.

Glassdoor’s study indicates that departures tend to spike at the end of every fiscal year, especially after the first 12, 24 and 36 months of a worker’s tenure. Its study cites two likely reasons for this pattern. The first is that employee reviews are usually conducted on an annual basis and personnel are more likely to get promoted or leave during the assessment period. The other potential explanation, in turn, is even simpler: professionals often round the amount of time that they’ve spent at a company on their resumes.

A few months here and there, however, don’t make much of an impact on the HR side of the picture. Glassdoor cites third party data in its study that indicates replacing a worker on average costs 21 percent of their annual salary. That can add up quickly for companies with a high turnover rate, especially when factoring in the disruption to business operations.

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What HR Can Do

Glassdoor’s study contains a number of useful findings that can help HR teams develop a better approach for increasing retention. The arguably most significant discovery pertains to the reason behind employee departures. According to the report, workers who move internally do so for an average pay raise of $7,133 or 14 percent, while those who leave for a new company earn only 2.1 percent more than at their previous firm. Glassdoor concludes that the main motivation behind job switches is usually company culture rather than salary.

This is reaffirmed by the fact that the employees who took part in the study by and large gravitated towards organizations with better Glassdoor rankings than their last employer. According to the website’s figures, an increase of just one star on its five-star scale can reduce turnover by four percent. And while pay is typically a small factor, offering more competitive salaries naturally helps as well, with the report finding that a 10 percent base salary increase raises the likelihood of a worker staying after their next role change by another 1.5 percent.

Added up with health benefits and other smaller contributors to employee satisfaction, these factors can help dramatically boost a company’s worker retention. And that in turn has a noticeable impact on the bottom line. More information can be found in Glassdoor’s full report here (PDF).

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