What is Employee Turnover?

Q: What are the types of employee turnover?

Voluntary – refers to employees who voluntarily resign, retire, or leave the company for another job. Involuntary – refers to employees who are terminated, fired, or laid off. Positive – positive turnover occurs when new employees re-energize the company, boost productivity, and replace low-performing employees. Negative – negative turnover occurs when employees leave under negative circumstances, such as mass layoffs or mass resignation due to workplace conflict.

Discover what employee turnover is, average turnover rates by industry, answers to frequently asked questions, and more.

By Paul Peters, May 10, 2024

Paul Peters is the Chief Editor of Betterteam. He's a former print journalist and small business owner and has written articles for a variety of newspapers, magazines and websites.

employee in red and black resting forehead on laptop

Employee turnover is employees leaving a company voluntarily or involuntarily. Companies often calculate their turnover rate to gauge if they are at a sustainable level.

Average Employee Turnover Rate by Industry:

Industry	Turnover Rate
All Industries	4.2%
All Government	1.6%
All Private	4.7%
Mining and Logging	3.3%
Construction	5.4%
Manufacturing	3.3%
Trade, Transportation, and Utilities	4.8%
Information	3.4%
Financial Activities	2.5%
Professional and Business Services	5.5%
Education and Health Services	3.5%
Leisure and Hospitality	7.7%

What is a high turnover rate?

A high turnover rate is anything above your industry norm, or, if that data is not available, above the nationwide average. According to The Bureau of Labor Statistics (BLS), if you’re above 3.7%, you’ve got high turnover in a general sense, but this could be normal for your industry.

How to tell when employees are going to turnover:

Work focus decreases.
Negativity increases.
They are reluctant to commit to long-term deadlines.
Work productivity decreases.
They do the minimum amount of work acceptable.
They don't work well with colleagues.
They leave work early.
They don't work to please customers.

If managers are aware of these indicators, they can look out for them. If an employee is showing signs that they may turnover, it may be possible to intervene, find out what can be done, and prevent that turnover from happening.

Company-wide you can watch for a decrease in productivity, an increase in early outs, and a decrease in customer satisfaction as indicators that you may have a turnover issue on the horizon.

You may also want to keep an eye on sites like Glassdoor, where employees can rate and review employers. A sudden downturn in your ratings can be an indicator of coming turnover, and you can read reviews to see exactly what’s bothering your employees.

What to do if you think an employee will turn over:

Ask if there are any problems you can fix. If they are underpaid compared to what they can earn at other companies, try to fix it. See if you can offer perks or benefits, such as a more flexible schedule, work from home days, or new equipment.

Employee Evaluation

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FAQs:

What is the definition of employee turnover?

Employee turnover is employees leaving a company voluntarily or involuntarily, which companies often calculate to gauge if they are at a sustainable level.

What are the types of employee turnover?

Voluntary – refers to employees who voluntarily resign, retire, or leave the company for another job.
Involuntary – refers to employees who are terminated, fired, or laid off.
Positive – positive turnover occurs when new employees re-energize the company, boost productivity, and replace low-performing employees.
Negative – negative turnover occurs when employees leave under negative circumstances, such as mass layoffs or mass resignation due to workplace conflict.

What causes employee turnover?

Lack of advancement opportunities.
Poor management.
Staff conflict.
Lack of recognition.
Poor employee selection.
Lack of vision.
Work-life imbalance.
Micromanaging staff.
Instability in the company.

Is employee turnover good or bad?

Employee turnover is bad when employees leave under negative circumstances, such as mass layoffs or mass resignation due to workplace conflict. Positive employee turnover is when new employees re-energize the company, boost productivity, and replace low-performing employees.

What is employee turnover intention?

Turnover intention is simply defined as an employee's intention to voluntarily leave a job or organization.

How is employee turnover calculated?

To calculate employee turnover, divide the number of employees who left during a time period by the total number at the company and multiply the result by 100. So, if 10 employees leave, and there were 100 total, you’d have a 10 percent turnover rate.

Why is employee turnover important?

It is important to keep an eye on your business's staff turnover, as a high employee turnover rate can be costly.

Why is employee turnover bad?

Employee turnover is bad when employees leave under negative circumstances, such as mass layoffs or mass resignation due to workplace conflict. The negative impact of employees leaving can be expensive and damaging to your organization’s goals and objectives.

What is the difference between employee retention and attrition?

Employee retention is an organization’s ability to retain its employees through specific policies and strategies that encourage an employee to stay with the organization, whereas attrition is the gradual reduction of a workforce as employees leave or retire.

What is a good employee turnover rate?

A high turnover rate is anything above your industry norm. If that data is not available, above the nationwide average. As of 2019, using Bureau of Labor Statistics (BLS) numbers, if you’re above 3.7 percent, you’ve got high turnover, but this could be normal for your industry.

What is regrettable turnover?

Regrettable turnover is when your business is negatively affected by an employee leaving.

How do you manage employee turnover?

Hire the right employees.
Improve onboarding and employee engagement.
Offer a competitive salary and benefits.
Involve employees in decision-making.
Share the company's vision, mission, and goals with employees.
Provide feedback and show appreciation for great work.
Provide opportunities for growth.
Offer flexible work hours, if possible.
Encourage work-life balance.

Is high turnover a problem?

Yes. The negative effect of employees leaving can be expensive and damaging to your business's goals and objectives. High turnover also causes an increase in recruitment costs, and a loss of enterprise knowledge, Bear in mind that new employees take around three months to achieve optimal productivity.

The frequency of new employees can impact the morale of your team, and undermine their loyalty.

How does employee turnover affect a company?

Increases recruitment costs.
Increases training costs.
Causes loss of productivity.
Causes loss of enterprise knowledge.
Affects the morale of your team negatively.
Undermines staff loyalty.

Why is employee turnover very costly for companies?

Employee turnover increases recruitment and training costs, and causes loss of productivity and enterprise knowledge.

What is voluntary employee turnover?

Voluntary employee turnover refers to employees who voluntarily resign, retire, or leave the company for another job.

What does dysfunctional employee turnover mean?

Dysfunctional turnover is where average and high performers leave your company.

Why is low turnover good for a company?

A low turnover rate increases productivity, saves costs, and ensures cohesion within your company.

What is employee turnover and retention?

Employee turnover is the proportion of your employees who leave during a certain period, whereas retention is the proportion that stays.

How can I decrease the employee turnover rate of my business?

Knowing your employer turnover rate will tell you if you already have a problem, and how big it is, but it won’t give you a way to deal with it. Ideally, you’ll spot trends that indicate that employees are about to turnover, and take steps to reduce it.

What does involuntary turnover mean?

Involuntary turnover means an employee was terminated, fired, or laid off. It is part of your overall turnover, and is sometimes calculated separately as a way to check on recruiting effectiveness. Involuntary turnover does not include when an employee quits or abandons a job.