The Eagle Hill Consulting Employee Retention Index
Q2 2024
The Employee Retention Index provides early signals of turning points in U.S. workforce retention. This index monitors key drivers of employee retention and equips organizations with insights to proactively develop strategies and programs to retain their people.
Employees’ growing optimism propels retention outlook to its peak
The second half of 2024 is expected to be a period of high employee retention according to the Eagle Hill Consulting Employee Retention Index. The six-month employee retention outlook this quarter is at the strongest level in 18 months. The Employee Retention Index increased in Q2 to 105.1, up from 96.8 the previous quarter. This spike signals that U.S. workers will be increasingly likely to stay at their jobs through year end.
Q2’s increase was driven primarily by employees’ growing confidence in their organization and leadership, as well as optimistic assessments of their workplace culture and compensation. Workforce attitudes regarding the near-term outlook for the job market were moderately more favorable but remain relatively stable. Employees’ sentiment in Q2 continued to strengthen across the Organizational Confidence, Culture, Compensation and Job Market Opportunity indicators, with each reaching their highest level to date.
Latest retention indicators
+8.3
Employee Retention Index
+8.4
Organizational Confidence
+7.0
Culture
+6.6
Compensation
+2.8
Job Market Opportunity
Key employee retention insights for Q2 2024
Organizations can expect a period of prolonged retention
The Employee Retention Index and the underlying indicators experienced their largest quarter-over-quarter gains and sit at the highest levels to date. This spike continues the prior quarter’s upward trend, indicating higher levels of workforce retention that are expected through the end of the year. Notably, the Employee Retention Index spike for the second quarter of 2024 was driven largely by Baby Boomer, Gen Z, and male-identifying workers across the U.S.
This high retention environment offers organizations a respite from the turnover challenges of the last few years. However, it also brings its own set of challenges, from growing labor costs and stagnating employee engagement to difficulty acquiring skills in a tight labor market and the potential for forced layoffs.
Baby Boomers “boom”, Gen Z rebounds, and the sandwich generations stay stable
The Employee Retention Index’s surge for the second quarter of 2024 was driven largely by Baby Boomer and Gen Z employees. Baby Boomer sentiment increased significantly in Q2 to 114 (+27%), reversing two consecutive quarters of declines. Baby Boomers are the workforce generation most likely to stay in their jobs through 2024. Gen Z is close behind, rebounding significantly in Q2 to 107.4 (+22%) following four quarters as the most attrition-prone workforce generation.
Millennial worker sentiment continued its steady climb to 107.6. The Gen X Retention Index remained virtually unchanged, decreasing by less than half a point to 94.8.
The gender divide widens
While retention outlook strengthened for the male- and female-identifying workforces, the Retention Index shows an accelerating disparity (17.1) between men and women workers. Men increased more than 14 points to 113, while women increased less than two points to 95.9. This signals that not only do women pose a larger attrition risk for organizations for the remainder of 2024, but their workplace experiences have become increasingly disparate.
Women report lower sentiment than men across the Organizational Confidence, Culture, Compensation and Job Market Opportunity indicators. Additionally, Q2 shows that while the male-identifying workforce gained across every indicator, women remained stable or declined. The main driver of the widening gender gap in Q2 is the Compensation Indicator. Men reported a significant increase, up to 118.9 (12%). Conversely, women declined to 90.2 (-2%).
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Expert insights
Melissa Jezior
President & CEO
“Eagle Hill’s latest Employee Retention Index report is welcome news for employers struggling to retain employees, which has become the norm amid a remarkably strong labor market and economy. This quarter’s detailed demographic data can be immensely valuable to employers as they craft retention and engagement programs aimed at hanging on to their top performers.”
Jonathan Gove
Senior Executive Advisor
“With employees staying put, organizations need to make the most of this quiet period to develop their people, drive innovation, and thrive in a tight talent market. This is the ideal time for leaders to strategically address the core elements of their business, specifically their workforce and how they align to deliver on strategy.”
Track. Assess. React.
The first of its kind, the Eagle Hill Consulting Employee Retention Index tracks quarterly sentiment of U.S. workers across four proven drivers of employee retention, which compose the Index’s indicators:
- Organizational Confidence: measures how confident employees are in their organization’s future and their organization’s leadership.
- Culture: measures how employees feel about their workplace culture, connections, feeling valued and recognized.
- Compensation: measures how employees view their compensation, benefits, and ability to grow their compensation at their organization.
- Job Market Opportunity: measures how employees perceive external prospects for employment and job security in the near term.
As the Employee Retention Index increases, it signals an increase in workforce retention in the next six months. As the Index decreases, it warns employers that workers are more likely to leave their jobs, and organizations can expect more turnover in the months ahead.
Methodology
The Index is based on a monthly omnibus survey conducted by IPSOS of a nationally representative sample of U.S. adults employed full or part time. Quarterly indices and reports are issued based on a minimum of 1,200 aggregated responses per quarter. Respondents are polled on a range of workforce topics including organizational confidence, culture, compensation, and job market opportunity.
Related resources
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