ADP says 5% of workers leave each month, most by choice

Five percent of employees leave their jobs each month, with most turnover being voluntary, according to a new report from the ADP Research Institute.

The Roseland-based human resources and payroll company said in “Revelations from Workforce Turnover” that 60 to 70 percent of employees quit rather than leaving involuntarily. The firm said a tightening labor market can prove challenging — and costly — to companies, but proper application of data could potentially predict, or even reduce, unplanned exits.

“It has always been important for employers to minimize turnover, but it is more critical now than ever before, given the current state of (the) labor market,” Ahu Yildirmaz, co-head of the ADP Research Institute, said in a prepared statement. “Unemployment is at a 17-year low, and job-switching is at a record high. If employers can use data to identify flight-prone employees and understand what’s driving their departure, they will have an important advantage in a highly competitive market for talent.”

The institute analyzed two years of payroll data covering more than 41,000 companies to develop a model for predicting employee turnover and explain factors driving it.

Among the study’s findings:

  • The majority of turnover, whether voluntary or involuntary, takes place in September, while the lowest rate of turnover takes place in March. (The study noted there are exceptions, such as the education and manufacturing sectors.)
  • Turnover rates vary widely by industry, with the highest average monthly turnover in leisure and hospitality, at 9.1 percent, and the lowest in manufacturing, at 3.4 percent.
  • The majority of turnover in every sector is voluntary, ranging from a high of 72 percent in accommodation and food services, and the lowest in administrative, support, waste management and remediation services, at 58 percent.
  • Some 40 factors can contribute to voluntary turnover, with pay and promotion the leading causes — as might be expected, ADP points out. Commute time is a more important factor than experience and tenure, the study found.

“Data can say things that employees might not during exit interviews, and shed light on causes of voluntary turnover that even the best expert may miss,” Marc Rind, chief data scientist at ADP, said in a statement. “In today’s challenging talent market, unbiased insights derived from actual workforce data can enable employers to identify potential flight risks before it’s too late.”

For more on the study, click here.