Eagle Hill’s Employee Retention Index signals more employees may leave their jobs during the first six months of 2024.
Employers likely can expect more employees to leave their jobs during the first six months of 2024, according to a new market indicator from Eagle Hill Consulting. The quarterly Eagle Hill Consulting Employee Retention Index1 provides employers with early signals of U.S. workers’ likelihood to leave or stay at their job.
These findings are on the heels of the Labor Department’s Job Openings and Labor Turnover Survey (JOLTS) that found the number of U.S workers quitting their jobs experienced a historic reduction in the third quarter of 2023, the largest quarter-over-quarter decline since the second quarter of 2020, the beginning of the pandemic.
“This groundbreaking new index is a first-of-a-kind leading indicator for employers when it comes to the likelihood that workers will leave or stay put in their jobs,” said Melissa Jezior, president and chief executive officer of Eagle Hill Consulting.
“Already, we’re seeing that the first two quarters of 2024 could be marked by higher employee departures,” she continued. “This is largely driven by dips in employee confidence in their organization’s future and leadership, as well as how they experience their organization’s culture. The Employee Retention Index offers employers an early signal that now is the time to engage with the workers they want to keep.”
Each month, the new Eagle Hill Consulting Employee Retention Index tracks sentiment of U.S. workers across four proven drivers of worker retention. As the Employee Retention Index increases, it signals an increase in retention in the next six months. As the Employee Retention Index decreases, it signals to employers that workers are more likely to leave their jobs, and organizations can expect more turnover in the next six months. The Index comes as employers continue to face a number of chronic workforce issues – a shrinking workforce, high levels of worker burnout, and increased workplace needs and demands from employees.
The index forecasts shifts in workforce retention based upon ongoing employee opinion surveys on factors that directly correlate with employees’ intentions to make job moves:
- The Organizational Confidence Indicator measures how confident employees are in their organization’s future and leadership.
- The Culture Indicator looks at how employee sentiment about their workplace culture, connections, and whether they feel valued and recognized.
- The Compensation Indicator measures how employees view their compensation, benefits, and ability to grow their compensation at their organization.
- The Job Market Opportunity Indicator measures how employees perceive external prospects for employment and job security in the near term.
More Employee attrition expected
Here are some key takeaways from the most recent Employee Retention Index:
- The index fell 3.2 points in the fourth quarter of 2023, down to 94.5. The decline continues the index’s retreat from the first quarter of 2023. This downward trend signals employees are more likely to leave their jobs, and employers can expect increasing attrition through mid-2024.
- The Organizational Confidence indicator fell 5.8 points in the fourth quarter of 2023. Organizational Confidence is the most pessimistic of the indicators in the fourth quarter.
- The Culture indicator fell 2.7 points in the fourth quarter of 2023.
- The Compensation indicator rebounded and rose to 2.5 points in the fourth quarter of 2023.
- The Job Market Opportunity indicator remains unchanged.
Though the index signals increasing attrition in the months ahead, there is some good news: The indicators where workers feel most pessimistic – organizational culture and confidence – are the two areas where employers can most readily intervene and drive positive impact.
“Understanding employee sentiment at a deep level has evolved into a competitive asset as many industries and government agencies continue to face labor shortages,” commented Jezior. “With this new market indicator, employers have forward-looking insights to help proactively implement strategies to retain employees before they face attrition problems.
“The Index isn’t a one-size-fits all for employers,” she continued. “Organizations can use the Employee Retention Index to benchmark their organization and pinpoint their strengths and weakness. In doing so, employers can assess and make changes to ensure their workforce is motivated, engaged, and aligned with the organizational mission.”
1 Index results are released on a quarterly basis, including an annual summary report. Conducted by Ipsos, the Eagle Hill Consulting Employee Retention Index is a nationally representative sample of adults ages 18 and older who are employed full-time or part-time on a range of workforce topics. Survey data is collected on a monthly basis, beginning in December 2022. The most recent data was collected from December 1- 4, 2023.