Employee Turnover

The rate at which workers leave an organization and get replaced over a specific period, usually measured monthly or annually.

What Is Employee Turnover?

Key Takeaways

  • ✓Employee turnover measures how many people leave and need replacing during a time frame.
  • ✓Average voluntary turnover is about 25% (BLS, 2024).
  • ✓Replacing one employee costs 50-200% of their annual salary (SHRM).
  • ✓More than half of voluntary departures are preventable (Gallup).
  • ✓Not all turnover is bad. Losing low performers can strengthen a team.

Employee turnover refers to the number or percentage of workers who leave during a defined period and need to be replaced.

Voluntary vs involuntary turnover

Voluntary turnover happens when employees choose to leave. Involuntary turnover happens when the organization makes the decision: layoffs, terminations, or end-of-contract separations.

Healthy vs unhealthy turnover

Healthy turnover happens when underperformers move on. Unhealthy turnover is when your strongest contributors walk out the door.

25%Average voluntary turnover rate (BLS, 2024)
50-200%Cost to replace one employee (% of salary, SHRM)
52%Voluntary departures that were preventable (Gallup)
$1TAnnual cost of turnover to US businesses (Gallup)

How to Calculate Turnover Rate

Three common versions HR teams should know.

Monthly rate

(Separations in month / Average employees) x 100.

Annual rate

(Total separations / Average employees) x 100.

By type

Break into voluntary and involuntary using the same formula.

How to Reduce Turnover

52% of departing employees say their manager could've prevented it (Gallup).

Fix your hiring process

Structured interviews produce 26% better retention (National Bureau of Economic Research).

Invest in managers

Managers account for 70% of engagement variance (Gallup).

Create visible career paths

Employees who see internal mobility are 3.5x more likely to be engaged (LinkedIn, 2024).

Get compensation right

25% of employees who quit cite pay as the primary reason (PayScale).

Build a culture people don't want to leave

Organizations with strong purpose see 40% higher retention (Deloitte).

Turnover Rates by Industry

Benchmarks from BLS and Mercer (2024).

IndustryAverage Annual RatePrimary Drivers
Hospitality73%Low wages, seasonal demand
Retail60%Part-time workforce, competition
Healthcare22%Burnout, staffing shortages
Technology18%Poaching, rapid skill changes
Financial services15%High stress, competition
Manufacturing25%Physical demands, shift work
Education16%Below-market pay, burnout
Government10%Job security

Frequently Asked Questions

What is a good turnover rate?

Depends on industry. Under 10% is low for most sectors, 10-20% is moderate, above 20% warrants investigation.

What's the difference between turnover and attrition?

Turnover = leaving and being replaced. Attrition = leaving without being replaced.

Why do good employees leave?

Lack of career growth (40%), poor management, below-market pay, burnout, feeling undervalued.

How often to measure?

Track monthly, review quarterly. Annual rates for benchmarking.

Does remote work affect turnover?

Hybrid work reduces quit rates by ~33% (Stanford). Fully remote can increase turnover if people feel disconnected.

Is zero turnover desirable?

No. Some turnover brings fresh skills and perspectives.

How does it affect remaining employees?

36% productivity dip in weeks following a departure (SHRM).

What role does onboarding play?

Strong onboarding improves retention by 82% (Brandon Hall Group).
Adithyan RKWritten by Adithyan RK
Surya N
Fact-checked by Surya N
Published on: 25 Mar 2026Last updated:
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