Hiring talented employees is something every company struggles to do. Keeping them is even more important. You should carefully monitor employee turnover, no matter the industry your company belongs to. Especially because it can come in many forms, such as people wanting to advance, you wanting to replace employees whose performance is questionable, and so on. Today, we’re going to talk about the average employee turnover rate by industry, to help you check whether your company is situated where it should.
Average Employee Turnover Rate by Industry: An Overview
When it comes to voluntary turnover in 2016, the highest percentage was in the hospitality industry (20.7%). The next two industries were banking and finance, as well as healthcare. Both had an average voluntary turnover rate of 15.3%. The non-profit industry had an average of 12.2%, while the services industry got 11.4%. The last couple of industries mentioned are manufacturing and distribution (10.1%), insurance (8.8%), and utilities (5.9%). Overall, all industries had an average voluntary turnover rate of 12.8%.
Looking at the total average turnover rate in 2016, the industry that stood out the most is still the hospitality one, with 28.6%. Then, healthcare had 19.9%, while the banking and finance industry showed a 18.1% total average turnover rate. The services industry had an average of 16.8%, manufacturing and distribution one of 16.0%, and the non-profit industry one of 15.7%. The last two are insurance (12.2%) and utilities (8.8%), while all industries had an average of 17.8%.
Why Is It Important?
Why is the average employee turnover rate so important for each specific industry, you ask? Well, because the industry determines what the ideal turnover rate in your company should be. There is no exact turnover rate that applies to all industries alike. You have to keep in mind the profession, the region, the country, the economic conditions, the political climate, and so on.
The ideal number should show a turnover rate among top performers that is as close to zero as possible. The ideal rate for poor performers should be maximized. Still, these numbers can seem a bit extreme, not to mention unrealistic. Which is why you should focus to keep your average turnover rate around 10%. This 10% should be balanced. This means you shouldn’t allow only top performers to leave and poor performers to stay.
How to Focus on Healthy Employee Turnover
When you’re losing a lot of precious employees, your turnover rate is unhealthy. In order to turn it around, you have to remember that a low turnover rate doesn’t necessarily mean good talent management. As a result, consider implementing programs that focus on successful recruiting, development, succession, and retention. This will help you monitor whether your low turnover rates are indeed healthy, and whether you’re letting go of employees who are wrong for the company or not.
We hope today’s guide provided you with the information you needed on the average employee turnover rate by industry, as well as having informed you of the benefits of having a healthy turnover rate.
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