Retention

Employers can expect lower employee attrition through the remainder of 2024, according to the latest results of the Eagle Hill Consulting Employee Retention Index. For the second quarter of this year, the Employee Retention Index climbed to 105.1, its highest mark to date and up 8.3 points from the previous quarter.

These results follow the most recent U.S. Labor Department Job Openings and Labor Turnover Survey (JOLTS) that found that while hires and job openings rates as a percentage of total employment were higher for May, the quits rate was unchanged—a signal that employees are more likely to stay with their employer, even despite potentially having more outside opportunities. The Index also aligns with a recent analysis from Aon that found that voluntary turnover within companies has fallen from 17 percent in 2022 to 12 percent so far this year.

Notably, the Employee Retention Index spike for the second quarter of 2024 was driven largely by Baby Boomer and Gen Z employees. Reversing two consecutive quarters, Baby Boomers saw the largest increase to 114, indicating this cohort is most likely to stay in their jobs as compared other generations. Gen Z was close behind, rebounding to 107.4 following four quarters of relative weakness. Millennials continued their steady climb, scoring 107.6 on the Index. Gen X was lowest and the only generation to see a decline at 94.8.

When looking at gender, workers who identify as male are more likely to stay at their jobs for the next six months as compared to female identifying counterparts. A substantial gender gap remains, with men increasing more than 14 points to 113, while women increased less than two points to 95.9.

The Eagle Hill Employee Retention Index is a first-of-a-kind market indicator that provides employers with early signals of U.S. workers' likelihood to leave or stay at their job. It tracks worker sentiment across four proven drivers of retention: organizational confidence, culture, compensation, and job market opportunity.

"Eagle Hill's latest Employee Retention Index is welcome news for employers struggling to retain employees, which has become the norm amid a remarkably strong labor market and economy," said Melissa Jezior, president and chief executive officer of Eagle Hill Consulting. "In fact, the six month retention outlook is the strongest since we launched the Index in early 2023."

"The data also signals that Baby Boomers and men are the lowest attrition risk. Alternatively, Gen X and female employees are the highest attrition risk, two populations that score substantially below the overall Index. This detailed demographic data can be immensely valuable to employers as they craft employee retention and engagement programs to hang on to their top talent," Jezior explained.

Jezior added, "We also found intriguing the alignment of views amongst Baby Boomers and Gen Z, two generations that often are at odds in terms of workplace views and preferences. Both generations had sharp and almost parallel increases across three of the drivers of retention: organizational confidence, culture, and compensation."

Looking at the Employee Retention Indicators, the Organizational Confidence, Culture and Compensation indicators all made gains this quarter. This is good news for employers looking to retain workers, as increases in these indicators correlate to lower employee attrition. More specifically for the second quarter of 2024:

• Organizational Confidence came in at 104.4, up 8.4 points for the quarter, representing the biggest jump of the four indicators. Historically this has been the most volatile indicator.

• Culture clocked in a 104.2, up seven points.

• Compensation was measured at 105.2, up 6.6 points for the quarter, the strongest indicator for this quarter.

• Job Market Opportunity is at 101.6, up 2.8 points. This is the lowest of the indicators for the quarter, but it continues to be relatively stable.