Exploring employee turnover rates by state can give businesses some real nuggets of wisdom. It's like having a map that shows you where to set up shop and how to nab the best talent. Plus, you can compare these numbers to your company’s turnover rate.
Let Awardco show you how to analyze this data and determine your company’s overall health. Then, dive in and let the data be your trusty guide toward keeping your team happy and your business thriving.
Understanding Employee Turnover Rates
Employee turnover illustrates the rate at which employees leave an organization over a period of time. The rate is typically annual, though it may be calculated more frequently depending on your business needs.
Why Employee Turnover Matters
Employee turnover rates (also called “separation rates”) unveil insights into a company’s workplace health and its impact on retaining its workforce.
Since a high employee turnover can have consequences (we’re talking low morale, extra expenses in recruiting replacement staff, and more), knowing your turnover rate helps your team take the necessary action.
Voluntary vs. Involuntary Turnover
When evaluating employee turnover, it’s vital to factor in essential elements such as voluntary vs. involuntary turnover:
- Voluntary: When a workforce member leaves an organization at their own will.
- Involuntary turnover: When a workforce member leaves when the company asks them to. Examples include dismissals and layoffs.
Companies may choose to calculate voluntary and involuntary rates, providing a more complete picture of employee turnover.
The National Average
According to the Bureau of Labor Statistics (BLS), the national average employee turnover rate is 3.52% between February 2023 and February 2024. Overall, the turnover rate remained steady.
The 2023 year started at 3.8% and decreased to 3.4% by the end of 2023. Then, as 2024 began, the turnover rate increased slightly to 3.5%.
Please note: The BLS formally uses “separations” instead of “turnover.” The agency defines separations as quits, layoffs, and discharges.
Also, the BLS releases an updated State Job Openings and Labor Turnover report each month. We encourage you to bookmark the page to stay on top of industry data and news.
In the BLS U.S. graphic below, the dark blue states currently have the highest job separation rates, while the ones in light green have the lowest rates.
The BLS also notes the states affected by the most turnover shifts, specifically in February 2024 (compared to January 2024). The states with the most significant increases in total separations rates include:
- Minnesota (+1.3 percentage points)
- Maine (+1.0 percentage point)
- Alaska (+0.9 percentage points)
The states with the most significant decreases include:
- Nebraska (-0.8 percentage point)
- New Jersey (-0.6 percentage point)
4 Factors Influencing State-by-State Turnover Variations
So why are there variations in turnover rates across states? Here are four factors worth considering.
1. Work-Life Balance
- Long working hours: If the social norm in a particular region emphasizes long working hours or a strong hustle culture, employees may feel pressure to conform, leading to burnout and increased turnover.
- Family-oriented environments: In areas that strongly emphasize family life, employees might prioritize jobs that offer flexible schedules or generous parental leave. This environment potentially leads to higher turnover in industries that don't cater to these needs.
- Commuting culture: Long commutes in certain regions can negatively impact employee well-being and work-life balance, driving separations.
2. Cost of Living and Salary Expectations
- High cost of living: If the cost of living in a region significantly outpaces company wages, employees might be more likely to seek opportunities elsewhere to afford their desired lifestyle. This factor may have a more significant effect on younger generations.
- Regional salary disparity: Social awareness of salary expectations in a particular region can influence employee satisfaction. Employees feeling underpaid compared to regional norms can lead to higher turnover.
3. Social Mobility and Career Aspirations
- Limited opportunities: Social cultures with limited career advancement opportunities outside a specific industry might lead to higher turnover within that industry as employees seek growth elsewhere.
- Entrepreneurial spirit: In regions with a robust entrepreneurial culture, employees might be more likely to leave their jobs to pursue other ventures, increasing turnover.
4. Attracting and Retaining Talent
- Social perception of an industry: If people think poorly of a particular industry (e.g., low pay or super stressful), getting and keeping talented folks can be challenging.
- Work-life balance reputation: Regions known for a healthy work-life balance might be more attractive to talent seeking those qualities, potentially leading to lower turnover for companies in those areas
Knowledge Is Power: The Impact of Turnover Rates on Your Business
Knowing state-specific turnover rates can help businesses make well-informed decisions. How? Leaning on this industry data allows your business to:
- Compare your business’s turnover rate with the state or national average. Factoring in the latter may be the case if you have a remote workforce residing in different states.
If your company’s turnover rate is above the state or national average, this could signal potential issues within your company.
- Tailor current talent acquisition strategies accordingly, especially if you reside in a high turnover state.
Strategy adjustments might include:
- Employee retention initiatives. Based on the employee turnover rates in the U.S., your team could implement retention programs that address specific challenges. These roadblocks may focus on career development opportunities, work-life balance, or job satisfaction.
- Recognition and reward programs. When performed correctly, recognition programs can reduce turnover by 31% and increase employee engagement twofold. Recognizing team members for achieved milestones fosters a positive work environment. Your recognition and reward platform are vital, so do your research and let Awardco help you choose wisely.
- Budget adjustments. With the statistics noted above, you can reallocate resources toward retention efforts. Use Awardco’s free ROI calculator to evaluate the financial impact retention can have through employee recognition programs.
- Remote/hybrid culture shifts. Do you have out-of-state/remote workforce members? Where exactly do they reside? Are there any key factors (state-by-state variations above) that merit attention? How can these factors help drive an inclusive workplace that suits more holistic needs?
Balancing a geographically diverse team is challenging. However, with reliable data and a reward network on your side, you can successfully achieve better employee retention.
Overall, staying attuned to these state figures can be an excellent method for checking in on your own business’ turnover rates. Use the figures as a starting point to assess the “why” and then take the right action.
Lean on Data to Take the Appropriate Action
At Awardco, we’re all about making data-driven decisions. And it only gets better—our reputable recognition and rewards platform sets you up with customized programs for what you need now and what you’ll need as your company scales.
Learn how employee recognition is one piece of the puzzle to lowering employee turnover.
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