The Eagle Hill Consulting Employee Retention Index
January 2025 release
Uncover emerging trends. Anticipate shifts in retention. Keep your best people.
The Employee Retention Index provides early signals of turning points in U.S. workforce retention by monitoring evolving trends that drive employee retention—so that you can develop informed strategies to keep your best people. The Retention Index tracks employee sentiment across four proven drivers of retention: how confident U.S. workers are in their organizations and leadership, how they connect with and view their organizational culture, how they view their current and potential compensation, and how they view prospects for employment in the external market.
Employee Retention Index experiences largest decline in two years, signaling rising employee turnover
Employers can expect increasing employee turnover in 2025, according to the latest results of the Eagle Hill Consulting Employee Retention Index. The Retention Index substantially dipped, falling 6.2 points from the previous quarter to 98.5. This is the Index’s first notable decline in 12 months and the largest in two years.
While the Retention Index is up year-over-year, the retention outlook boom has been showing signs of moderating and is now reversing course. The Retention Index peaked in the second quarter of 2024 (105.1), with two-quarters of consecutive growth. It began its decline in the third quarter (104.7) and has now outpaced those losses with a considerable downturn to 98.5. While U.S. employee attrition rates have been falling in 2024, the Index’s downward trend signals that this could reverse in the new year with worker turnover likely to increase through mid-2025.
The Employee Retention Index follows two key U.S. economic reports, and the Index results are largely aligned with this new jobs data. The latest Bureau of Labor Statistics Job Openings and Labor Turnover Survey (JOLTS) data found U.S. job openings unexpectedly increased last November to 4.8%, the highest level of job openings since May. Meanwhile, the Department of Labor reported that hiring blew past expectations in December, adding 256,000 jobs in December while the unemployment rate ticked down to 4.1 percent.
The Retention Index’s decline is driven by losses across the Organizational Confidence, Culture, and Compensation indicators and a gain in the Job Market Opportunity indicator. American workers feel more confident in the external job market than they have in two years, reflected in the Jobs Market Opportunity indicator making its biggest gain and peaking at 102. Workers lost confidence in their organizations and leadership, with the Organizational Confidence indicator falling 4.5 points to 99.9. For the first time, the Culture indicator, measuring employee assessments of company culture, underperforms all other indicators at 98.8, down 3.1 points from the previous period. Additionally, employee opinions of their current and potential compensation, reflected in the Compensation indicator, experienced the largest decline in two years, dropping 7.9 points to 99.
Latest retention indicators
-6.2
Employee Retention Index
-4.5
Organizational Confidence
-3.1
Culture
-7.9
Compensation
+3.1
Job Market Opportunity
Key employee retention insights
Looking at segments of the U.S. workforce, the Employee Retention Index finds that Millennials (108.7) and men (107.6) hold the highest Retention Index scores and are the workers most likely to stay in their jobs over the next six months. Conversely, Baby Boomers (89.1) and women (89.1) hold the lowest Retention Index scores and are more likely to leave their jobs through mid-2025.
Gender gap: Women most at risk to leave jobs
In the most recent findings, men and women both show weakening six-month retention outlooks, with women’s index declining 8.5 points compared to men’s 2.4 points decline. After five quarters of consecutive gains, the women’s Retention Index deteriorated to its weakest position in 18 months, at 89.1. This significant loss balloons the gender retention gap to 18.5 points, largest second only to the gap of 18.6 in the second quarter of 2023.
Looking at the underlying drivers of retention, both men and women show gains in the Job Market Opportunity indicator. Men report the largest losses in the Compensation indicator (-5.3), while the Culture (-0.1) and Organizational Confidence (unchanged) indicators remain relatively stable. Women report notable losses in the Organizational Confidence (-9.9) and Compensation (-8.4) indicators, with a -3.8 loss in the Culture indicator.
Retention outlook by generation: Millennials most likely to stay
The Employee Retention Index fluctuated more often in 2024 than it did in 2023, driven primarily by notable swings among Gen Z and Baby Boomer workers. Finishing out the year, Gen Z workers are the only generation to show gains in the Employee Retention Index, rising 6.5 points. This rise is driven by strong improvements in confidence in their organizations and assessments of their workplace cultures. On the other end of the generational spectrum, Baby Boomers show significant losses, with the Retention Index declining over 17 points. For the first time, Baby Boomers now hold the weakest retention outlook among generations, with the Retention Index at 89.1.
Millennials’ retention outlook fell, following a steady upward trend dating back to the fourth quarter of 2023. Despite Millennials’ weakening retention outlook, they are the only generation with a Retention Index score above 100 (108.7), with the others clustered below 95.
Gen X workers continue to show relative stability. After peaking in the third quarter (99), their Retention Index declined to 93.5, bringing it back in line with their retention outlook over the last 24 months.
Baby Boomers: The retirement cliff is here
For the first time, Baby Boomers hold the weakest retention outlook among generations in the workforce, with their Retention Index at 89.1. Like most other generations in Q4, Baby Boomer employees report declining confidence in their organizations and more pessimism about their workplace culture and compensation. However, there is a distinction: Baby Boomers’ confidence in opportunities available in the external market is also declining—the only demographic group expressing this sentiment.
Baby Boomers’ weakening assessments of both internal and external drivers of employee retention may signal that not only are they more likely to exit their current positions in the months ahead, but also perhaps the workforce.
Government employees more likely to stay in jobs than broader workforce
U.S. Government workers’ Retention Index remains relatively stable in Q4, declining slightly by 1.6 points. The government Employee Retention Index (103.0) remains stronger than that of the American workforce (98.5). Comparatively, government employees report more optimistic views of their compensation and organizational culture than the average U.S. worker and less confidence in their organization and job market opportunities.
Is corporate culture posed to drive employees away?
For the first time, Culture is the weakest indicator comprising the Employee Retention Index. Compared to workers’ confidence in their organization and compensation, worker sentiment around their organization’s culture exerts the most pressure on the Retention Index’s decline. Looking at U.S. workers’ likelihood to stay or leave their jobs over the coming months, the way workers are experiencing culture poses a retention risk for employers into 2025.
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Expert insights
Melissa Jezior
President & CEO
“Workers are feeling more confident in their job opportunities, the biggest rise we’ve seen in two years. At the same time, worker satisfaction with their organization’s culture is deteriorating, with culture now a lagging indicator of retention. Taken together, there’s a substantial likelihood that employers may see a big jump in employee attrition in the first half of 2025, potentially ending ‘The Great Stay.’ While that may be good news for companies looking to reduce headcount, it’s a problem for employers facing chronic worker shortages.”
Jonathan Gove
Senior Executive Advisor
“In this shifting labor market environment, it’s critical to understand that retaining top talent is so much more than salary and job perks. It’s about creating a workplace where people feel valued, inspired, and empowered to grow. Investing in employees’ development and well-being fosters a culture where excellence thrives and loyalty is a natural outcome.”
Lindsay Henson
Federal Government Lead
“Government leaders are facing unprecedented challenges – budget constraints, attracting younger workers, and dealing with a large wave of retirements. Key areas for leaders to focus on will be building a culture of purpose and trust, offering career development opportunities, and succession planning. And to inspire the next generation of workers, organizations are wise to focus on flexibility, recognition, and the unique role each individual plays in delivering on their agency’s mission.”
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.
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