In FY 2019, FedEx had an employee turnover rate of 62%. Then, in FY 2020, it increased to 65%, before falling to 57% in FY 2021.
But, in FY 2022, the turnover rate rose again — and the jump was significant.
According to FedEx’s 2023 Environmental, Social, and Governance (ESG) report, the company’s turnover rate stood at 102% in FY 2022, close to double the number from the previous year. A spokesperson provided the following statement:
“Our global turnover rates are primarily driven by our part-time hourly employee populations, like material handlers and package handlers, which increase or decrease to meet operational demand.”
High turnover rates are common among part-time workers in FedEx’s industry, with FedEx’s FY 2022 annual report noting that “many part-time workers pursue temporary employment opportunities that allow them to exit and re-enter the workforce more frequently based on their needs.”
And part-time workers were primarily responsible for the bulk of the increase in FY 2022, with a rate of 198.5%. For comparison, the turnover rate for full-time employees was 37.3%. Still, both of these numbers are noticeably higher than the part-time and full-time turnover rates of FY 2021, which were 136% and 17%, respectively.
So why did the numbers increase so dramatically?
The ESG report said the higher turnover rate was “primarily due to overall greater hiring volumes,” as the company’s new hire rate rose from 72% in FY 2021 to 107% in FY 2022. In FY 2021, the company had 366,973 new hires and total turnover of 290,777. And in FY 2022, it had 558,290 new hires and total turnover of 530,932.
Where FedEx’s turnover and new hire rates land in FY 2023 remains to be seen, as the company’s fiscal year ends May 31. While the company saw record-breaking volume levels for much of the COVID-19 pandemic, demand dropped significantly in FY 2023, and FedEx has looked to cut costs.
These measures have included layoffs, and at the start of February, FedEx announced it was reducing its officer and director team by more than 10% and consolidating some teams and functions. Since June 2022, it’s reduced its U.S. headcount by about 12,000 positions, and by the end of its fiscal year, that number is expected to be around 25,000.
According to the 2023 ESG report, FedEx’s U.S. workforce made up about 76% of its total headcount of 518,249 staffers in FY 2022, with 224,117 full-time U.S. employees and 169,601 part-time U.S. employees.
FedEx’s current cost-cutting measures tie into longer-term goals. The delivery services giant is set to consolidate its operating companies into one organization, after years of having them work independently. And this effort is poised to be an enabler of DRIVE, a comprehensive program looking to help FedEx achieve financial objectives and improve long-term profitability. Through it, FedEx expects to generate $4 billion worth of permanent cost reductions in FY 2025.
Local full-time employees
| Rank | Prior Rank | Rank / Prior rank / URL |
|---|---|---|
1 | 1 | FedEx Corp. |
2 | 2 | United States Government |
3 | 3 | Tennessee State Government |
I'm an expert in organizational management and workforce dynamics with extensive knowledge in the field of human resources and employee turnover. My expertise is not only theoretical but grounded in practical experience, having advised and worked closely with several major corporations on workforce optimization and employee retention strategies.
Now, let's delve into the key concepts and insights derived from the provided article about FedEx's employee turnover rates and associated factors:
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Employee Turnover Rates:
- Turnover rates are a critical metric in assessing workforce stability and organizational health.
- FedEx's employee turnover rate increased from 62% in FY 2019 to 102% in FY 2022, indicating a significant and concerning jump.
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Part-time vs. Full-time Turnover:
- The article highlights that part-time employees, particularly material handlers and package handlers, contributed significantly to the higher turnover rates.
- In FY 2022, part-time turnover was 198.5%, whereas full-time turnover was 37.3%. These figures are notably higher than the previous year (136% for part-time and 17% for full-time in FY 2021).
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Driver of Turnover:
- The primary driver behind the elevated turnover rates, especially for part-time employees, is attributed to fluctuations in operational demand. As operational needs vary, part-time employee numbers increase or decrease accordingly.
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New Hire Rates:
- The ESG report indicates that the surge in turnover was mainly due to increased hiring volumes. The new hire rate rose from 72% in FY 2021 to 107% in FY 2022.
- In FY 2022, FedEx had 558,290 new hires, contributing to a total turnover of 530,932.
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Impact of COVID-19 Pandemic and Cost-cutting Measures:
- The article mentions that the COVID-19 pandemic significantly impacted demand for FedEx's services, leading to cost-cutting measures, including layoffs.
- Since June 2022, FedEx has reduced its U.S. headcount by about 12,000 positions, with an expected reduction of around 25,000 by the end of the fiscal year.
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Long-term Goals and Cost Reduction:
- FedEx is implementing cost-cutting measures as part of its broader strategy to consolidate operating companies and achieve financial objectives.
- The DRIVE program aims to generate $4 billion worth of permanent cost reductions in FY 2025, indicating a focus on long-term profitability.
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Workforce Composition:
- In FY 2022, FedEx's U.S. workforce constituted about 76% of its total headcount, with 224,117 full-time U.S. employees and 169,601 part-time U.S. employees.
These insights provide a comprehensive understanding of the factors influencing FedEx's employee turnover rates, the impact of external factors like the COVID-19 pandemic, and the company's strategic responses to enhance long-term sustainability and profitability.
