How to calculate employee turnover rate

Employee turnover rate is the percentage of employees leaving your workforce over a specific time period. Businesses with high turnover rates often report low employee satisfaction, poor working conditions, and less motivated employees.

In this article, we’ll explore how you can calculate your employee turnover rate. You’ll also learn how to benchmark and improve your turnover rate to enhance your overall employee experience. 

Employee turnover is the percentage of your employees that leave across a given period. 

A business that has a low employee turnover typically has high employee satisfaction. It also translates to higher productivity, engagement, and more profit. Decreasing employee turnover rates can enhance your workplace and create a better workplace culture.

To calculate your employee turnover rate, use the formula to determine the final percentage.

Here is the employee turnover rate formula:

To calculate the employee turnover rate, use the turnover rate formula (or an employee turnover rate calculator). Divide the number of employee separations by the average number of employees, then multiply by 100.

Here’s how you can use the formula to calculate employee turnover:

For example, a human resource professional counts 200 employees at the start of the year. The year ended with 300 employees. The average number of employees for the year is 250 (200 + 300 = 500 / 2 = 250). If 10 employees separate from the company during that year, the annual turnover rate is 4% (10/250 = 0.04 x 100 = 4%).

Analyzing your employee turnover rate lets you determine whether your employee experience program works effectively. A high turnover rate signals the need to improve your employee value proposition and overall employee experience.

Always benchmark your employee turnover rate against your wider industry and against your previous data. Understanding how you stack up against others in your sector will show you if you’re on the right track. Then, comparing your employee turnover rate from year to year will indicate if you’re improving or regressing.

Benchmarking is an important strategy for continually improving the employee experience and decreasing your turnover rate.

It’s also important to remember that there are two types of employee turnover rates: voluntary and involuntary.

Not all employee turnover happens for the same reason. There are two distinct forms of employee turnover, both of which have different connotations: 

Involuntary and voluntary turnover rates will impact your overall turnover rate. You may want to calculate the turnover rate for each to gain a more holistic view.

In 2024, the average monthly employee turnover rate in the US is 2.1% across all businesses. This figure stems from Bureau of Labor Statistics research and is notably lower than in the past few years.

It’s important to understand that some industries, like retail, have higher turnover rates than others. Here are the annual average employee turnover rates in different industries:

When looking for high, low, and average employee turnover rates, always look for benchmarks in your industry. 

A high employee turnover rate is anything that is above the average for your industry. For example, a high employee turnover rate in healthcare would be anything about 7.5% per year. 

Always use recent data when pinpointing whether your employee turnover rate is high or low.

A low employee turnover rate is any rate below or far below the average for your industry. For example, a low employee turnover rate for hospitality would be anything below 7.2% per year. If you had an employee turnover rate of only 4%, you should have an extremely low rate for your industry.

If you worry about a high employee turnover rate, you can implement strategies that combat employee churn.

Most of the time, there isn’t any one single cause that makes an employee leave a business. 

A range of factors could contribute to their desire to leave, including: 

Running exit surveys and monitoring employees will help you identify which factors contribute to employee churn.

Here are several retention strategies your business can use to reduce employee turnover rates.

Benchmarking your employee turnover rate and continuously measuring monthly changes will help indicate whether your employee experience strategy has a positive impact. 

Without constantly measuring its turnover rate, your business will not have a benchmark against which to track its change over time. You should use your employee turnover rate as a core employee experience KPI. 

More data on turnover rates helps you create a better strategy to reduce them.

Employee retention relies on several different factors. All of these closely relate to the overall experience you offer employees during their life cycle with your company. 

Here are the six pillars of employee retention and how they impact turnover rates:

Building an employee engagement action plan starts with understanding the retention pillars and working on meeting each one.

Related reading: HR quick start guide.

Recognition shows employees that you appreciate their hard work. SurveyMonkey research shows that 63% of recognized employees are unlikely to job-hunt within six months. Creating an employee recognition program is one strategy to get a complete picture of employee performance. 

As part of your feedback culture, a recognition program helps celebrate your employees' work. Over time, recognition and appreciation for employees can lower burnout, boost productivity, and reduce your employee turnover rate.

Employee feedback can be one of the most effective ways of motivating your teams and improving the employee experience. 

Your business could also use employee engagement surveys across every stage of the employee lifecycle. Collect feedback and better understand what your employees feel at any moment. Feedback can point you toward areas of the employee experience that you could improve upon or iterate. 

You can collect employee feedback in performance reviews, 1:1 interviews, or feedback surveys. 

Here are the best employee experience surveys to use at each stage of the employee life cycle:

The best survey to collect employee feedback in the recruitment stage is the candidate experience survey. This survey template allows businesses to monitor how the recruitment experience runs from a candidate’s perspective. 

A candidate experience survey measures how satisfied someone was with the recruitment process using the Likert scale.

There are four helpful employee experience surveys that you can use to collect feedback during onboarding: 

Each of these surveys will measure the efficacy of your onboarding processes and determine if employees need support. Starting on the right foot is a great way to ensure you reduce employee turnover rates.

During the development stage of the employee life cycle, employees have settled into their roles. They often seek opportunities to take on more responsibilities and expand their impact within the organization.

Here are three helpful employee feedback surveys to monitor satisfaction at the development stage and reduce employee turnover rates:

SurveyMonkey research shows that only 27% of employees rate their growth opportunities within their company as excellent. Utilizing the surveys mentioned above can help your business prioritize becoming an education-first organization.

Related reading: Best tools for collecting and sharing employee engagement results.

The retention phase of the employee life cycle is an opportunity to solicit feedback from your seasoned employees. 

The following surveys will reveal how satisfied your employees are and point toward opportunities to hone your employee experience:

Incorporating employee feedback can enhance retention, reduce turnover, and foster a happier workforce.

Don’t overlook the power of effective offboarding. When employees leave, you can use this to launch an exit interview. 

In an exit interview, you’ll discover why an employee is leaving. By pinpointing the significant reasons behind turnover, you can create strategies to combat them. 

Over time, you can turn exit interviews into a treasure trove of helpful employee feedback. While it’s sad when employees leave, their experiences improve worker conditions down the line. 

You can also use stay interviews during an employee’s time with you to track their needs.

One leading factor contributing to high employee turnover is employees feeling stuck in their roles. Without opportunities to learn and grow, employees may feel there is no clear path for advancement in the company. 

Investing in employee training materials, courses, or self-learning modules will provide employees with professional development opportunities to thrive. Here are a few strategies you can employ:

When you provide training and career development opportunities, you show your employees you’re ready to invest in them. Not only does this lower employee turnover rates, but you’ll also create a more skilled team of workers.

You might have the most amazing workplace, company culture, and managers. But it won't make much difference if you're not fairly compensating your employees. Building a comprehensive benefits package with competitive compensation is the most effective way to reduce your employee turnover rate. 

Here are a few aspects of a competitive offer that you should aim to include: 

Companies with the lowest turnover rates meet these additional perks, often having many more than just this. By reducing your employee turnover rates, you’ll create better employee experiences and retain your top talent.

Monitoring and regularly calculating employee turnover rates will help your business monitor employee churn. High turnover rates could be a symptom of a poor employee experience. 

Using strategies to reduce employee turnover can create a better employee experience and enhance your value proposition. Learn how SurveyMonkey can help you track and improve employee engagement.