Regional Employee Turnover Study Results Released

The survey results represent a unique data source as this information is not currently tracked or reported by federal, state, or local entities. The report identifies the challenges and opportunities within our region and is intended to assist employers in better serving their workforce. Six Michigan Works! Agencies (MWAs) contracted with the Workforce Intelligence Network...

The survey results represent a unique data source as this information is not currently tracked or reported by federal, state, or local entities. The report identifies the challenges and opportunities within our region and is intended to assist employers in better serving their workforce.

Six Michigan Works! Agencies (MWAs) contracted with the Workforce Intelligence Network for Southeast Michigan (WIN) to examine employee turnover in the region. This work aims to provide a comprehensive understanding of the root causes of employee turnover and the potential gaps that exist in the development of career pathways for those with barriers to employment. Information was gathered from a region-wide employer survey, convenings of local employers, and national best practice research.

This report focuses on employer survey results from the entire 16-county WIN area, which includes Genesee, Hillsdale, Huron, Jackson, Lapeer, Lenawee, Livingston, Macomb, Monroe, Oakland, Saint Clair, Sanilac, Shiawassee, Tuscola, Washtenaw, and Wayne counties in the greater southeast Michigan region. The target industries for this body of work include Manufacturing, Health Care, Information Technology, Retail/Hospitality, Construction, Agriculture, and Energy/Utilities.

“The survey results represent a unique data source as this information is not currently tracked or reported by federal, state, or local entities. The report identifies the challenges and opportunities within our region and is intended to assist employers in better serving their workforce,” says WIN Executive Director, Michele Economou Ureste. “In particular, the report will help to inform the resources aimed at reducing employee turnover.”

Occupations with Highest Rate of Turnover

The occupations experiencing the highest rates of turnover are low-training, low-wage positions such as medical aides, general laborers, and food preparation and serving workers. Workers in each of these occupations typically remain with a company for under two years. However, occupations with high average tenure face their own retention challenges. Engineering, skilled trades, and computer systems roles also typically take a long time to fill, and an oncoming retirement cliff for these workers may leave employers with small talent pools to choose from in the future.

Median Turnover Costs of $4,500 Per Worker

This includes factors such as search costs, training, and lost revenue and productivity. Training costs alone are estimated to be about $1,500 per employee. Additional training and detailed onboarding are reported as key retention strategies, but also expensive ones. Transportation and warehousing and energy and utilities employers reported especially high costs of turnover.

Southeast Michigan employers estimate median turnover costs of $4,500 per worker, but average costs over $30,000.

Most Common Reason for Employee Turnover

The most common reason cited “very frequently” for employee turnover is a desire for higher pay or benefits, followed by transportation, childcare, and other personal conflicts. Reasons cited “often” also include opportunities to advance within the company and pursuit of different career paths. These reasons were consistently in the top two for each MWA, as well as most industry groups. Professional, technical, and scientific services employers, however, reported advancement opportunities, poaching, and changing career tracks as greater concerns.

Changes in Retention Strategy

Competition for a shrinking talent pool is driving changes in retention strategy for many employers. Employers often face fierce competition for workers, and most are experimenting with changes in pay, benefits, and other workplace features to attract and retain talent. Flexible scheduling and opportunities such as tuition reimbursement and training benefits, most often implemented by health care and professional, technical, and scientific service employers, were reported as being especially effective for attracting and keeping a younger workforce.

Opportunities for Employers and Workforce Development Professionals

This report concludes with several opportunities for employers and workforce development professionals to consider that could help reduce employee turnover and the associated costs to employers in greater southeast Michigan:

  • Continued research and engagement related to employee turnover is critical as the labor market continues to shift. Regular tracking and reporting of regional employee turnover information is not done by federal, state, or local entities; therefore, consistent employer convenings and surveying would allow for greater understanding of the root causes of employee turnover and the strategic development of workforce solutions to address the key issues faced by both employees and employers throughout the region.
  • Development of supported career pathways for hard to fill positions would be beneficial for both employees and employers. In order for these pathways to be successful, employer partnerships between those businesses employing occupations identified as hard to fill would need to be established and regularly convened by workforce development professionals. Increased participation in BRNs and other talent-focused industry groups is highly recommended for employers throughout the region.
  • Regular communication with employees regarding attendance-related warning signals that could ultimately result in the employee leaving could help to eliminate turnover, in some cases. Employers with the capacity to educate their management team and connect employees to community resources to assist with alleviating the reasons for turnover related to transportation, childcare, or other personal conflicts would be incredibly impactful given the results of this study.
  • The business services teams at each MWA throughout the WIN region are underutilized by local employers based on the survey results and employer commentary analyzed in this report. Employers are encouraged to reach out to their local Michigan Works! business services representative using the contact information below to gain access to the many benefits offered by the workforce development system.

 

Detroit Employment Solutions, Corporation (DESC)
Serving the City of Detroit
313.664.5566  |  www.descmiworks.com

GST Michigan Works!
Serving Genesee, Huron, Lapeer, Sanilac, Shiawassee and Tuscola counties
810.233.5974  |   www.gstmiworks.org

Michigan Works! Macomb/St. Clair
Serving Macomb and St. Clair counties
586.469.5022  |  www.macomb-stclairworks.org

Michigan Works! Southeast
Serving Hillsdale, Jackson, Lenawee, Livingston, and Washtenaw counties
844.200.3206  |  www.mwse.org

Oakland County Michigan Works!
Serving Oakland County
248.858-5520  |  www.oaklandcountymiworks.com

Southeast Michigan Community Alliance (SEMCA) Michigan Works!
Serving Monroe and out-Wayne counties
734.229.3518  |  www.semca.org

 

 

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