Employee Turnover
Employee turnover is the rate at which employees leave an organisation over a given period and are replaced, usually expressed as a percentage of the average headcount.
Definition
Employee turnover measures the movement of people out of an organisation. It includes voluntary departures, such as resignations, and involuntary ones, such as dismissals or the end of a contract, and it is usually followed with a distinction between the two. Some organisations also separate regretted turnover, the departure of people they wanted to keep, from the rest.
The common formula divides the number of departures in a period by the average headcount of that period, multiplied by 100. A company can calculate it monthly, quarterly or yearly, and by team, role, tenure or manager. Early turnover, within the first months, is often tracked separately because it points to recruitment or onboarding issues rather than to long-term engagement.
Turnover matters because replacing someone involves recruiting, training and a period of lower productivity, and because departures affect the morale of those who stay. The main pitfall is looking at a single company-wide figure. A moderate overall rate can hide a team where everyone leaves, or a rate that looks high only because of seasonal contracts. Always pair the number with the reasons for leaving.
Key points
- Formula: departures in the period divided by average headcount, times 100.
- Separate voluntary from involuntary departures, and regretted from non-regretted ones.
- Track early turnover on its own, because it often points to recruitment or onboarding.
- A single company figure hides hot spots: break it down by team, role and tenure.
- The rate says how many leave, exit interviews and data on reasons tell why.
Example
A retail company with an average of 50 employees records 9 departures over the year, so turnover is 18 percent. Looking closer, 6 of the 9 left within their first four months, all in the same store. The HR manager reviews the onboarding in that store and the information given during recruitment, rather than launching a retention plan for the whole company.
Frequently asked questions
What is a good turnover rate?
There is no universal threshold, because it depends on the sector, the type of contracts and the local labour market. Compare your rate with your own history and with similar organisations, and look at who leaves rather than only at how many.
What is the difference between voluntary and involuntary turnover?
Voluntary turnover is when employees choose to leave, for example by resigning. Involuntary turnover is when the organisation ends the relationship, through a dismissal or the end of a fixed-term contract. Retention work focuses mostly on voluntary departures.
How can exit interviews help reduce turnover?
They collect the reasons people give for leaving, which you can group by theme and by team over time. Patterns such as repeated mentions of the same manager or the lack of growth tell you where to act. A ready-to-use exit interview template can structure the conversation.
Related terms
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