Here's a stat – across all industries, the turnover rate is 10.9 percent, based on LinkedIn’s data of half-a-billion professionals.
Great. But what industries have the highest turnover rates (i.e. the percentage of full-time employees who leave their organization – either voluntarily or non-voluntarily – in a given year)? And, more importantly, what’s causing that high turnover?
That’s a more interesting story. Cutting the same data, we were able to identify both the industries with the highest turnover and the reasons behind the high turnover. The latter is particularly interesting, because the reasons appear contradictory on the surface.
Industries with the highest turnover rates are tech (software), retail and media
The industries with the highest turnover rates are:
- Technology (software), 13.2%
- Retail and Consumer Products, 13%
- Media and Entertainment, 11.4%
- Professional Services, 11.4%
- Government/Education/Non-Profit, 11.2%
- Financial Services and Insurance, 10.8%
- Telecommunications, 10.8%
What’s interesting though is why these industries have such high turnover, as the reasons are very different. For example:
- Tech turnover is likely driven by increasing demand and compensation
The computer game (15.5%), Internet (14.9%), and computer software industries (13.3%) had the highest turnover in tech — but those rates pale in comparison to the churn you see within particular occupations. User experience designers had extremely high turnover at 23.3 percent (they’re alsoextremely in-demand), with both data analysts and embedded software engineers at 21.7 percent. In fact, embedded software engineers receive the most InMails per person of any occupation in North America.
There’s strong evidence to suggest that the trouble with retaining tech talent is high-demand and rising compensation within the industry: as employers and offers get more competitive, top talent is more eager to jump on new opportunities. The numbers support this theory — according to LinkedIn data, almost half (49%) of departing tech employees take another job within the tech sector.
- Retail is transforming from brick-and-mortar to e-commerce
The industries within retail with the highest levels of turnover aren’t terribly surprising, with restaurants (17.2%), retail (16.2%), and sporting goods (14.8%) leading the way. The roles that people left the most include lower-level, often-seasonal jobs, like retail salesperson (19.3%), food service professional (17.6%) and hospitality professional (17.0%).
The revolving door of retail may have clearer causes. The industry traditionally sees high attrition, and with the rise of e-commerce and the decline of brick-and-mortar storefronts, companies need far fewer people on the floors. Many former salespeople have to find completely new careers: only 35 percent of people leaving jobs in retail stay within the sector, according to our data.
- Media and entertainment companies’ need for talent comes and goes with projects.
There’s no single industry within media and entertainment that’s driving turnover—newspapers (13.3%), online media (13.2%), and sports (13.2%) are all neck-and-neck. But the same can’t be said for occupations: animators (25.6%) and 3D artists (22.3%) both have turnover rates more than double the global average (both of these jobs are in high demand). Marketing specialists (19.8%) within Media and Entertainment see the third-most turnover. Most people leaving jobs in media/entertainment also leave the sector itself: just 36 percent of job-leavers go to another job in the media/entertainment sector.
One reason why the sector may see so much turnover: it’s extraordinarily project-focused. Whether it’s motion pictures, music or sports, the work revolves around projects with definite beginnings and ends (e.g., movies, albums, playoffs). Talent needs would naturally ebb and flow faster here than other sectors, resulting in more turnover.
The point – turnover can be a sign of a very healthy, very unhealthy or changing industry
Tech employees are among the most in-demand professionals in the world, which causes high turnover. With so much opportunity, people leave good jobs for great ones.
Conversely, turnover can also be caused by highly volatile industries as well. For example, newspapers – an industry in peril as it struggles to compete with free online alternatives – has high turnover from layoffs, low pay and long hours. Those are the exact opposite reason tech has high turnover.
Finally, there are industries in change, like retail. Yes, retail usually has high turnover anyway, but that’s accelerated as it evolves from brick-and-mortar to e-commerce, requiring new professionals to fill those skills.
How can I prevent high turnover?
The most important question.Turnover is expensive – on average,losing an entry-level employee costs employers 50 percent of that person’s annual salary, and losing a technical or senior-level employee costs employers 125 percent of their annual salary.
That’s a lot.
So, why do people leave their jobs, in general? According to a survey of 10,000 recent job switchers, the biggest reason people quit their job was from a lack of career opportunity.
So how do you fix that?
A few ways:
- Managers need to have honest career conversations with their employees. The more a manager is aware of what an employee wants to become, the more they’ll be able to put them in tracks that accomplish those goals – which leads to higher retention and engagement.
- Encourage internal mobility. This is two-fold, both upwards and sideways. Always look internally first when hiring a senior-level position, as it proves to employees that they can progress their career at your company. Second, encourage lateral movements within your company if someone wants to take on a new challenge – this is much better than losing them to a competitor.
- Invest in your employees’ development. You can talk about people progressing their careers all you want, but if you don’t give them the tools to do so, it’s meaningless. Hence, you need to offer your people development tools (yes, including ones like LinkedIn Learning) to learn the skills necessary to advance their career.
Bottom line, the moreopportunity for career progression you give to your employees, the higher your retention will be. And, more importantly than that, the more engaged your employees will be – which ultimately will lead to a more effective workforce.
Methodology
Turnover rates are drawn from LinkedIn’s member data and reflect a 12-month rolling period. We calculate turnover by taking the number of people who left their company in a given population (e.g., the retail sector, the restaurant industry, or data analysts), then dividing that number by the average amount of people in that given population. We consider people as leaving their jobs if they provide an end-date for their position at a company (excluding internal job changes within the same company).
We’ve excluded contractors and other non-full-time-employees (e.g., interns, students, etc.), along with any positions that start and end on the same date. The turnover estimates here may be slightly 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.
*Image from Oregon State University
Are you looking to reduce the turnover at your organization? These LinkedIn Learning courses can help:
- Reid Hoffman and Chris Yeh on Creating an Alliance with Employees
- Motivating and Engaging Employees
- Organizational Culture
- Coaching and Developing Employees
- Finding and Retaining High Potentials
