Key Takeaways
Employee turnover rate equals separations during a period divided by average headcount, times 100.
US quits averaged 2.0% of employment a month in 2025, roughly 24% a year, with accommodation and food services the highest at 4.2% a month, according to BLS JOLTS.
Gallup found 42% of voluntary leavers say their manager or organization could have done something to keep them.
Gallup estimates replacing an employee costs about 40% of salary for frontline staff, 80% for technical professionals and around 200% for leaders.
Stay conversations, clear career paths, manageable workloads, regular recognition and competitive pay are the most direct ways to reduce employee turnover.
The employee turnover rate is the percentage of employees who leave an organization during a period, usually a year, calculated as separations divided by average headcount, times 100. It reflects how well you keep talent: some turnover is healthy, but a high or rising rate means lost productivity, hiring costs and lower morale.
US employers recorded 62.8 million separations in 2025, according to the Bureau of Labor Statistics, so every business competes to keep its best people. This guide explains how to calculate employee turnover rate, the latest benchmarks by industry, the causes of employee turnover, what it really costs and 8 practical ways to reduce employee turnover, with a cost calculator you can fill in.
What the employee turnover rate means
Employee turnover is the number of employees who leave your company over a specific period, typically one year. You can calculate it for the whole company or for a department, location or team, and the turnover rate expresses it as a share of your workforce.
Turnover is not only voluntary. When an employee is let go for poor performance, that counts too, as involuntary turnover. Some turnover is inevitable, such as retirements or people changing careers, but a sudden spike often points to problems in the workplace that push people out, and companies with high turnover get a reputation that makes hiring harder.
- Voluntary turnover: Employees choose to leave, for example by resigning for another job.
- Involuntary turnover: The employer ends the relationship through dismissals or layoffs.
- Regretted turnover: Voluntary exits of people you wanted to keep, usually strong performers. This is the number to watch most closely.
- Healthy turnover: Some turnover brings in fresh ideas and lets people who are a poor fit find roles that suit them better. Do not aim for zero.
Turnover and attrition are related but different: attrition usually means a role is not refilled. This guide to employee attrition explains the distinction in detail.
How to calculate employee turnover rate
Knowing your turnover rate is crucial, because it is a key indicator of culture and retention. The standard formula divides separations by average headcount.
- Count separations: Add up every employee who left during the period, voluntary and involuntary.
- Work out average headcount: Add the headcount at the start and end of the period and divide by 2.
- Apply the formula: Divide separations by average headcount and multiply by 100.
Worked example: A company starts the year with 200 employees and ends with 180, and 20 people left during the year. Average headcount is (200 + 180) ÷ 2 = 190, so the annual turnover rate is 20 ÷ 190 × 100 = 10.5%.
Decide upfront how you will treat part-time, temporary and seasonal workers and people on leave, and apply the same rules every period. Then add the related measures below, because a single company-wide rate hides where the problem is.
| Measure | Formula | What it tells you |
|---|---|---|
| Voluntary turnover rate | Voluntary leavers ÷ average headcount × 100 | How many people choose to leave |
| Regretted turnover rate | Regretted leavers ÷ average headcount × 100 | Whether you are losing the people you most need |
| First-year turnover rate | Leavers with under 12 months' service ÷ new hires in the period × 100 | Whether hiring and onboarding work |
| Annualized rate from a month | Monthly turnover rate × 12 | A quick yearly view from monthly data |
| Retention rate | Employees employed for the whole period ÷ headcount at start × 100 | How many people stayed |
Average employee turnover rate by industry
A turnover rate means little until you compare it with your industry. A rate that looks low may still be above the norm for your sector, while a high rate may be typical for hourly, seasonal work.
The BLS Job Openings and Labor Turnover Survey (JOLTS) reported 62.8 million separations in 2025, of which 38.0 million were quits and 21.2 million were layoffs and discharges. Total separations averaged 3.3% of employment a month and quits 2.0% a month. The table shows the 2025 monthly averages by industry, with a rough annual quits figure.
| Industry (US, 2025) | Total separations, monthly avg. | Quits, monthly avg. | Approx. annual quits (×12) |
|---|---|---|---|
| All industries (total nonfarm) | 3.3% | 2.0% | About 24% |
| Accommodation and food services | 5.5% | 4.2% | About 50% |
| Professional and business services | 4.6% | 2.3% | About 28% |
| Construction | 4.0% | 1.8% | About 22% |
| Retail trade | 3.8% | 2.6% | About 31% |
| Health care and social assistance | 2.9% | 2.0% | About 24% |
| Information | 2.8% | 1.3% | About 16% |
| Manufacturing | 2.4% | 1.4% | About 17% |
| Finance and insurance | 2.1% | 1.3% | About 16% |
| Government | 1.5% | 0.8% | About 10% |
Hospitality and retail run high because many roles are entry-level, hourly or seasonal; see this guide to the retail turnover rate for that sector. Finance, manufacturing and government run lower. Compare your voluntary rate with the quits column, since quits are the turnover you can most influence.
Spot flight risk before people resign
Run pulse and lifecycle surveys, recognize effort every day and automate milestone rewards from one platform.
Talk to our ExpertTrusted by 5,000+ companies
Causes of employee turnover
Some departures, such as retirement, are outside your control, but most causes of employee turnover are not. Gallup's 2024 research on preventable turnover found that 42% of employees who voluntarily left say their manager or organization could have done something to keep them. When asked what would have helped, leavers named these five actions most often:
The seven causes below appear again and again in exit data, and each links to a fix in the next sections.
- Poor compensation or benefits: If employees work as hard as peers at competitors but earn less, they will leave, and pay transparency makes the gap easy to see.
- Negative workplace culture: Overwork, under-appreciation, unhealthy competition, poor boundaries or harmful behavior tell people the company does not care about them.
- Lack of growth: People have professional goals. If the job does not help them learn, take on new challenges and advance, leaving gets easier.
- Too much work: Sustained overload leads to stress, burnout and sickness, and burned-out people look for the exit. See these ways to prevent burnout.
- Lack of recognition: People who feel their efforts go unnoticed disengage and become easier to poach.
- Micromanagement: Little room to decide frustrates people, kills initiative and erodes morale.
- Poor hiring decisions: Hiring for skills alone, without checking values and expectations, leads to early exits.
The cost of employee turnover
Few leaders know what turnover actually costs, and without that number it is hard to create urgency. The cost of employee turnover has three parts: money, knowledge and morale.
The financial cost covers recruiting, hiring, onboarding, training and lost output while the role is empty and the new hire ramps up. Gallup estimates replacement costs of about 40% of annual salary for frontline employees, 80% for technical professionals and around 200% for leaders and managers. The calculator below applies those multipliers; replace the example figures with your own.
| Role group | Leavers in a year | Average salary | Replacement cost multiplier | Estimated cost |
|---|---|---|---|---|
| Frontline employees | 10 | $40,000 | 40% | $160,000 |
| Technical professionals | 4 | $90,000 | 80% | $288,000 |
| Leaders and managers | 1 | $120,000 | 200% | $240,000 |
| Total | 15 | $688,000 |
The knowledge cost is harder to see. Every year an employee stays, they learn your processes, build relationships with customers and colleagues and become able to train others. When they leave, that knowledge leaves too, and sometimes a client follows them.
The morale cost compounds the rest. Colleagues pick up the slack, miss the relationship and start wondering whether they should leave too. Left unchecked, turnover becomes a cycle that leaves a team with only its newest, least experienced members.
How to reduce employee turnover: 8 strategies
These eight strategies target the causes above, starting with the cheapest and fastest: regular conversations about how people feel and where they are going. Gallup found 45% of voluntary leavers had no such conversation with a manager or leader in the three months before they quit.
1. Hold stay conversations before people decide to leave
Ask employees what keeps them, what might make them leave and what they want next, in regular one-on-ones or dedicated stay interviews. Act on what you hear and follow up. Exit interviews tell you why people left; stay conversations give you the chance to keep them.
2. Ensure a clear career path for employees
Work with managers to identify employees with potential and give them the skills, projects and sponsorship to grow. Fund training, show internal openings first and invite senior leaders to share how they grew in the organization. People stay where they can see a future.
3. Protect work-life balance and workload
Monitor workloads and redistribute tasks so no one becomes overloaded. Encourage breaks and time off, offer flexibility where the role allows and make it clear that productivity never comes at the expense of health.
4. Improve engagement through two-way communication
A lack of communication and transparency makes employees feel disconnected from the company's mission. Share decisions and the reasons behind them, create open spaces for discussion and use regular pulse surveys to catch concerns before they turn into resignations.
5. Recognize and reward contributions regularly
Employees stay when they feel valued. Make recognition timely and specific, encourage peer-to-peer appreciation and celebrate milestones such as work anniversaries. Reward standout results too, for example with extra leave, experiences or rewards employees choose themselves.
6. Train managers not to micromanage
Hands-on managers are valuable, but managers who must approve everything slow work down and frustrate their teams. Brief managers on what good looks like, then give employees room to decide and build their judgment. Manager quality is one of the biggest drivers of whether people stay.
7. Get the selection process right
Do not rush to fill a role with the first candidate who has the skills. Assess attitude, values and expectations as well as skills, give a realistic preview of the job and invest in onboarding, because many exits happen in the first year.
8. Offer competitive compensation and benefits
Pay was the top preventive action in Gallup's research, so benchmark salaries regularly and fix gaps before people find them. Comprehensive benefits, such as health and wellness support, performance bonuses, flexible benefits and tax-efficient perks, add security and show employees they are valued. For more retention ideas, see these employee retention strategies.
How Empuls helps reduce employee turnover
Employees rarely leave for pay alone; they leave when they feel undervalued, disconnected or unheard. Empuls helps you act before people resign, not after.
- Recognition and rewards: Empuls recognition makes timely appreciation part of daily work, and milestone rewards automate work anniversary and service celebrations.
- Listening and early warning: Pulse surveys and lifecycle surveys surface hidden concerns by team and stage, from onboarding to exit.
- Connection across teams: The social intranet keeps remote, hybrid and frontline teams informed and connected.
- Benefits people value: Flexible benefits and perks let employees choose wellness, learning and lifestyle options that suit them.
Lowering your employee turnover rate
High employee turnover is never good for business, but you cannot fix it until you measure it and know what it costs. Calculate your rate by team, compare it with your industry, work out the cost with the calculator and then target the causes your exit and stay data reveal.
Most voluntary turnover is preventable. Regular conversations, fair pay, growth, manageable workloads and everyday recognition keep good people, and they cost far less than replacing them.
Book your Empuls demo
Frequently asked questions
A good employee turnover rate is one at or below your industry's norm, with low regretted turnover. In 2025, US quits averaged about 2.0% of employment a month, roughly 24% a year, per BLS JOLTS, but hospitality runs far higher and finance and government far lower. Track your trend and voluntary rate, not one universal target.
Divide the number of employees who left during the period by the average number of employees, then multiply by 100. Average employees is the start headcount plus the end headcount, divided by 2. For example, 20 leavers with an average headcount of 190 gives a turnover rate of 10.5%.
Turnover counts employees who leave and are usually replaced, whether they resign or are let go. Attrition usually refers to departures, such as retirements or roles eliminated, where the position is not refilled, so headcount shrinks. Many HR teams track both, and use voluntary and regretted turnover to focus on preventable exits.
The main causes of employee turnover are pay and benefits below market, poor relationships with managers, a negative culture, lack of career growth, excessive workload and burnout, lack of recognition, micromanagement and poor hiring decisions. Gallup found more pay or benefits and better manager interactions were the top changes that could have prevented voluntary exits.
Gallup estimates the cost of replacing an employee at about 40% of annual salary for frontline employees, 80% for technical professionals and around 200% for leaders and managers. That covers recruiting, onboarding, training and lost productivity. Lost knowledge, customer relationships and team morale add further costs that are harder to measure.
Reduce employee turnover by holding regular stay conversations, offering clear career paths, keeping workloads manageable, communicating openly, recognizing contributions often, training managers not to micromanage, hiring for fit as well as skills and keeping pay and benefits competitive. Measure turnover by team so you fix the right problem first.
Voluntary turnover happens when employees choose to leave, for example by resigning for another job. Involuntary turnover happens when the employer ends employment through dismissal or layoff. Voluntary turnover, especially among strong performers, is the more useful signal of retention problems because it is most often preventable.
Yes. Some turnover brings in new skills and ideas and lets people who are a poor fit move to roles that suit them better. A turnover rate of zero can signal stagnation. The goal is a rate in line with your industry, with low regretted turnover among the people you most want to keep.
![Diversity and Inclusion in the Workplace: Why It Drives Success [Activities + Survey Tips]](/Blog-cover-light/inclusion-and-diversity-in-the-workplace.avif?dpl=dpl_8fJikYxuCmYv3RQT1yaE4Git6nzR)
![How to Run an Effective Employee Commitment Survey [+ Sample Questions]](/Blog-cover-light/employee-commitment-survey.avif?dpl=dpl_8fJikYxuCmYv3RQT1yaE4Git6nzR)
