Employee Turnover

What is Employee Turnover?

Employee turnover refers to the rate at which employees leave an organization over a specified period, often expressed as a percentage. It encompasses both voluntary departures (resignations) and involuntary departures (terminations or layoffs). For example, if a company has 100 employees and 10 leave within a year, the turnover rate is 10%.

What is Considered a High Employee Turnover Rate?

A high employee turnover rate is typically considered to be above the industry average. It can vary by sector, but generally, a rate exceeding 15-20% is considered high.

What is a Healthy Employee Turnover Rate?

A healthy employee turnover rate depends on the industry and job market conditions. Generally, a rate below 10% can be considered healthy, but it's crucial to assess this in the context of your specific industry.

How to Calculate the Employee Turnover

Here is a step-by-step guide to calculate the employee turnover rate: 

1) Define the Time Period

Decide on the time frame for which you want to calculate the turnover rate. Common periods include monthly, quarterly, or annually.

2) Gather Data

Collect the necessary data for the selected time period. You'll need the following information:

1) Number of employees at the beginning of the period (Starting headcount)

2) Number of employees at the end of the period (Ending headcount)

3) Number of employees who left during the period

3) Use the Formula

Calculate the turnover rate using the following formula:

Turnover Rate =(Average Number of Employees) / Number of Employees Who Left​)×100

Average Number of Employees = Starting Headcount + Ending Headcount / 2

4) Multiply by 100

Multiply the result by 100 to express the turnover rate as a percentage. Here's a step-by-step example:

Suppose you started the year with 100 employees, ended with 90 employees, and 15 employees left during the year.

Average Number of Employees=100+902=95Average Number of Employees=2100+90​=95

Turnover Rate=(1595)×100≈15.79%Turnover Rate=(9515​)×100≈15.79%

10+ Causes of Employee Turnover

Some of the most common causes of employee turnover include:

  • Lack of growth opportunities
  • Inadequate compensation and benefits
  • Workplace conflicts and disputes
  • Lack of recognition and rewards
  • Unsatisfactory work environment
  • Limited job security
  • Personal or family reasons
  • Career advancement elsewhere
  • Burnout and overwork
  • Inadequate training and development
  • Lack of flexibility in work arrangements
  • Cultural misfit
  • Health and well-being concerns
  • Better compensation offers from competitors
  • Organizational restructuring or downsizing
  • Mergers and acquisitions
  • Retirement or transition to other roles
Also read: How to Make Employee Engagement Fun?

How to reduce employee turnover?

Some strategies to reduce employee turnover include:

  • Offering competitive compensation and benefits packages in line with industry standards
  • Implementing training programs, mentorship initiatives, and clear career progression paths
  • Offering flexible work arrangements, paid time off, and policies supporting work-life balance
  • Growing a workplace culture that values respect, open communication, and collaboration
  • Acknowledging and celebrating employees' achievements and contributions
  • Resolving conflicts or issues between employees or teams promptly and fairly
  • Keeping employees informed about company goals, changes, and challenges

What are the costs associated with employee turnover?

The costs of employee turnover include recruitment expenses, training costs for new hires, lost productivity during the learning curve, and the potential impact on team morale and overall performance.


Employee turnover is a critical metric for organizations, influencing overall productivity, costs, and workplace morale. While some level of turnover is natural, high rates can signal underlying issues that need to be addressed. Understanding the causes and costs of turnover enables organizations to make informed decisions to improve their workforce dynamics.

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