Arlington, VA – July 16, 2026 – Manufacturing turnover looks solved on paper: industry-wide hourly turnover held at 31% in both 2023 and 2024, and average time-to-fill stayed flat at 34 days. But new research from Manufacturers Alliance, conducted with Aon and drawing on a survey of 22 enterprise-tier manufacturers, finds that this apparent stability is concealing structural weaknesses that continue to drive both hourly burnout and a quieter, harder-to-see exodus of salaried talent.
Why is stable turnover still a problem for manufacturers?
Because flat numbers aren't the same as fixed problems. 40% of manufacturers say their retention challenges are completely unchanged from 2024, and 49% say the same about attraction. Meanwhile, 96% of manufacturers don't formally quantify what turnover actually costs them, leaving a real, ongoing financial drain effectively invisible to leadership.
What's actually driving hourly worker turnover?
Local labor competition, not just pay. 55% of enterprise leaders point to competition from other nearby employers as a primary driver of hourly attrition, alongside compensation (59%), schedule flexibility (37%), and career opportunities (32%) as the leading reasons workers exit, per Aon's benchmarking data. Compounding the problem, 52% of manufacturers still have no formal pre-hire assessment process, leaving new hires, and their employers, exposed to early mismatches that surface within the critical first 90 days.
Are salaried employees a hidden retention risk too?
Yes, arguably a bigger one, because it's harder to spot. While salaried turnover looks tightly controlled as 45% of large enterprises keep it within a stable 10–15% band, and nearly 60% report voluntary quit rates under 10%, nearly a third of large enterprise manufacturers (32%) point to a lack of internal advancement opportunities as a root cause of the voluntary attrition they do see. Because salaried professionals rarely leave in visible waves, that erosion of future leadership often goes unnoticed until it's already a gap.
Key Findings:
- Headline stability is masking stalled progress. Industry turnover held at 31% for two straight years, yet 40% of manufacturers say retention challenges haven't improved since 2024.
- Almost no one is measuring the true cost. 96% of manufacturers don't formally quantify what turnover costs their business.
- The talent pool itself is shrinking. The sector faces a projected shortfall of 3.8 million workers through 2033, closing off the option to simply out-hire the problem.
- Nearby employers, not just paychecks, are pulling hourly workers away. 55% of enterprise leaders cite local competition for talent as a top driver of hourly attrition.
- Pre-hire screening is a major blind spot. More than half of manufacturers (52%) have no formal assessment tools to vet candidates before hiring.
- Better screening pays off fast. One enterprise client cut 90-day turnover by 23% after adopting validated pre-hire assessments, saving $4.8 million annually.
- Salaried attrition hides in plain sight. Despite low reported quit rates, 32% of large manufacturers cite blocked career advancement as a root cause of the voluntary departures they do have.
VIEW THE RESEARCH
