Employee Turnover Rate
Last updated: Apr 28, 2025
What is Employee Turnover Rate?
Employee Turnover Rate is the percentage of employees who voluntarily or involuntarily leave an organization (typically calculated annually). You should consider voluntary and involuntary categories separately, in addition to looking at overall Employee Turnover Rate.
Employee Turnover Rate Formula
How to calculate Employee Turnover Rate
Company total at beginning of the year = 100 Number of employees that left = 6 Company total at end of year = 94 6 / ((100 + 94) / 2) = 6.4% annual employee turnover
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How to visualize Employee Turnover Rate?
A line chart can help you optimally visualize your Employee Turnover Rate data by letting you see how this metric trends over time. You can then adjust your strategy to meet your goals.
Employee Turnover Rate visualization example
Employee Turnover Rate
Line Chart
Employee Turnover Rate
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Measuring Employee Turnover RateMore about Employee Turnover Rate
Employee turnover, as a top level metric, includes employees who leave by choice and those who are dismissed, retire, or lose their certification.
This data can prompt you to ask important questions such as who is leaving and why and whether there’s a time when more people tend to leave.
Understanding the reasons for voluntary turnover can help you improve employee engagement and retention and can shed light on your management practices and overall company culture.
Employee Turnover Rate Frequently Asked Questions
What's considered a "healthy" turnover rate?
Industry norms vary significantly, from 10% in highly specialized fields to over 30% in retail or hospitality. However, the quality of turnover matters more than the percentage alone. Functional turnover (losing low performers) can actually benefit an organization, while dysfunctional turnover (losing high performers) is concerning even at low rates. A technology company might tolerate 20% overall turnover if it's primarily affecting low performers, but become alarmed at 10% if it's concentrated among top engineers.
Should we include all departures in our turnover calculation?
This depends on your analytical goals. For overall workforce stability, include all departures. For deeper insights, segment your analysis: voluntary vs. involuntary, regretted vs. non-regretted, or by tenure bands. For example, high turnover among employees with less than one year tenure suggests onboarding or selection issues, while increased departures among tenured staff might indicate career development problems.
Our turnover rate seems low compared to benchmarks—is this always positive?
Not necessarily. Unusually low turnover can indicate insufficient performance management, lack of career growth triggering disengagement without departure, or compensation structures that reward tenure over performance. A professional services firm with 3% turnover against an industry benchmark of 15% should investigate whether they're retaining the right people for the right reasons.