Employee turnover rate: formula and calculator.

The employee turnover rate formula.

Turnover rate (%) = leavers ÷ ((headcount at start + headcount at end) ÷ 2) × 100

Count everyone who left: resignations, dismissals and retirements. Exclude internal transfers and people on long-term leave who have not left.

For external comparisons, the US Bureau of Labor Statistics Job Openings and Labor Turnover Survey (JOLTS) publishes monthly separation and quit rates by industry. The CIPD factsheet on employee turnover and retention explains how to calculate and interpret turnover.

A note on the turnover formula.

Use the same definition every period so trends stay comparable.

Monthly, quarterly and annual turnover rate.

Use the same formula for any period. Only the leavers and the average headcount change.

To estimate an annual rate from part of the year, divide the year-to-date rate by the number of months so far and multiply by twelve. Treat the result as a projection, because turnover is often seasonal: many organizations see more resignations after bonus payments or at the start of the year.

Employee turnover rate examples.

The following examples are illustrative. They show how the same formula applies to different situations.

The growing company shows why average headcount matters. Dividing 40 leavers by the end headcount of 280 would give 14.3%; by the start headcount of 200, 20%. The average of 240 gives 16.7%.

How to calculate voluntary and involuntary turnover.

Split the leavers before you divide. The denominator stays the same.

Voluntary turnover rate = resignations ÷ average headcount × 100. Involuntary turnover rate = dismissals and redundancies ÷ average headcount × 100. The two rates add up to the total rate, apart from leavers you classify separately, such as retirements or the end of fixed-term contracts. Decide once how to treat these groups and keep the rule, so rates stay comparable from year to year.

How to calculate regretted turnover rate.

Regretted turnover rate = number of leavers you would have wanted to keep ÷ average headcount × 100. Agree with managers in advance who counts as regretted, usually based on performance and role criticality, so the measure is consistent. A rising regretted rate is more urgent than a rising overall rate, because it shows that good people are being pushed out.

First-year and new hire turnover rate.

First-year turnover shows whether hiring and onboarding work. Use a different base: the people who started in the period, not the whole workforce.

A high 90-day rate usually points to a mismatch between the job advertised and the job itself. A high rate between three and twelve months more often points to onboarding, the manager relationship or workload.

Employee turnover rate calculator.

Common mistakes when calculating turnover rate.

1. 1
   Using end-of-period headcount. It inflates or deflates the rate when headcount changes; use the average.
2. 2
   Counting internal moves. Transfers between teams are not leavers for the company rate, though they matter for team rates.
3. 3
   Mixing definitions over time. Changing what counts as a leaver makes trends meaningless.
4. 4
   Comparing small teams on percentages alone. One leaver in a team of eight is 12.5%; look at numbers as well as rates.
5. 5
   Reporting only the total. The total hides whether people you wanted to keep are leaving.

What is a good employee turnover rate?

There is no universal good number. Turnover varies widely by industry, country, role and labor market, and published benchmarks use different definitions. The most useful comparisons are internal: your own trend over time, the spread between teams, and regretted against total turnover. A rising voluntary rate in one team is a stronger signal than any external average.

What drives differences in turnover rate.

Turnover differs with industry, role, location, labor market and company size. Entry-level and hourly roles usually turn over faster than specialist and senior roles; tight labor markets raise quit rates everywhere. Within your organization, the biggest differences usually come from management, workload and growth opportunities, which is why team-level rates matter more than the company average.

Turnover rate benchmarks by industry.

Turnover differs sharply between industries. Hospitality, retail and other frontline sectors typically see much higher rates than finance, professional services or government. In the US, the Bureau of Labor Statistics publishes monthly quit and separation rates by industry, which are useful for checking whether your rate moves with your sector or against it. Compare like with like: a 20% voluntary rate may be normal in one industry and a warning sign in another.

How to use turnover benchmarks.

External benchmarks, such as the monthly quit rates published by the US Bureau of Labor Statistics, are useful context but rarely a target. They mix very different roles and regions. Use them to see whether your sector is facing a general rise in quits, then compare your own teams with each other and with your own history.

Split it to make it useful.

1. Voluntary
   Resignations only. The rate most linked to engagement, management and workload.
2. Involuntary
   Dismissals and redundancies. Often driven by hiring quality or restructuring.
3. Regretted
   People you wanted to keep. The number leadership should watch most closely.
4. First-year
   Leavers within twelve months of starting. A signal of hiring or onboarding problems.
5. By team
   Same formula per team. Turnover concentrates; company averages hide hot spots.

Turnover rate segments worth tracking.

Split the overall rate by team, role, location, tenure and performance level. A company rate of 15% can hide one team at 5% and another at 40%. Tenure splits show whether people leave early, pointing to hiring and onboarding, or after a few years, pointing to growth and pay. Performance splits show whether you lose the people you most want to keep.

What to report to leadership.

Show a rolling twelve-month rate rather than single months, which jump around. Then add the leading indicators, because the turnover rate on its own can only tell leadership what has already happened. Estimate the money involved with the cost of employee turnover calculator.

A turnover rate report: what to include.

Keep the report to one page and end with two or three actions. A turnover report that only describes the past does not change the future.

What to do when the turnover rate rises.

1. 1
   Find where it is concentrated. Split by team, role, tenure and manager.
2. 2
   Separate regretted from expected leavers. Focus on the people you wanted to keep.
3. 3
   Ask the people who stayed. An anonymous survey of current employees shows the conditions behind leaving while you can still act.
4. 4
   Fix one condition per team. Workload, manager support and growth are the usual levers.
5. 5
   Check again in three months. Look at the survey measures first; the turnover rate will follow later.

What a rising turnover rate costs.

Each leaver brings costs for recruiting, onboarding and lost productivity while the role is empty and while the new hire learns the job. The work of leavers also lands on colleagues, which can push the next people out. Use the cost of employee turnover calculator with your own salaries and hiring costs to turn a turnover rate into a budget figure leaders can compare with the cost of prevention.

Predict it before it happens.

Turnover is a lagging indicator: by the time it moves, people have already left. Survey measures move earlier. Intention to stay, trust in the manager and, often overlooked, energy and recovery fall before resignations rise. thrive research shows that engaged employees who are burning out lose three times as many days to not working effectively, and exhausted committed people are a common source of turnover that looks sudden.

How to reduce employee turnover rate.

1. 1
   Find where it is high. By team, role and tenure, not only the company average.
2. 2
   Learn why people leave. Exit surveys and stay interviews, read together.
3. 3
   Fix onboarding. If first-year turnover is high, the problem starts in the first 90 days.
4. 4
   Develop managers. Most voluntary turnover is shaped by the daily experience managers create.
5. 5
   Keep workload sustainable. Overload drives out the most committed people first.
6. 6
   Make growth visible. A clear next step keeps people looking inside rather than outside.
7. 7
   Watch early indicators. Falling energy and intention to stay show risk before resignations.

Who is responsible for employee turnover?

Everyone has a part. Leaders set strategy, pay principles and culture. HR measures turnover, analyzes causes and equips managers. Managers shape the daily experience that drives most voluntary turnover. A useful practice is to review turnover by team with each manager every quarter, alongside the team’s survey results, so the conversation is about conditions rather than blame.