How to calculate the employee turnover rate

The employee turnover rate is the percentage of employees leaving your workforce over a specific period of time. 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 who leave over a given period of time. 

A business that has a low employee turnover will typically have 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 as a percentage, use this 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 and then multiply by 100.

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

For example, a human resource professional counted 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%).

Analysing your employee turnover rate enables you to determine whether your employee experience programme is working 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 whether you’re on the right track. Then, comparing your employee turnover rate from year to year will indicate whether 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 have an impact on 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 was 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, such as retail, have higher turnover rates than others. Here are the annual average employee turnover rates (for the US) in different industries:

When looking to determine what high, low and average employee turnover rates are, 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 above 7.5% per year. 

Always use recent data when trying to pinpoint whether your employee turnover rate is high or low.

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

If you are concerned 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 wish to leave, including the following: 

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

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

Benchmarking your employee turnover rate and continuously measuring monthly changes will help indicate whether your employee experience strategy is having 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 about turnover rates helps you create a better strategy to reduce them.

Employee retention relies on several different factors. All of these are closely related to the overall experience that you offer employees during their lifecycle with your company. 

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

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

Related reading: HR quick start guide

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

As part of your feedback culture, a recognition programme helps to 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 to motivate your teams and improve the employee experience. 

Your business could also use employee engagement surveys across every stage of the employee lifecycle. You can collect feedback to gain a better understanding of your employees’ thoughts and feelings at any given time. Feedback can point you towards areas of the employee experience that you could improve upon or iterate. 

You can collect employee feedback during performance reviews or one-to-one interviews, or by means of feedback surveys. 

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

The best survey to use if you want to collect employee feedback at the recruitment stage is the candidate experience survey. This survey template allows businesses to monitor how smoothly the recruitment process runs from a candidate’s perspective. 

A candidate experience survey uses a Likert scale to measure how satisfied someone was with the recruitment process.

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

Each of these surveys will measure the effectiveness of your onboarding processes and determine whether employees need any support. Ensuring that things are just so from the outset is a great step towards reducing your employee turnover rates.

During the development stage of the employee lifecycle, employees will have settled into their roles. They will often seek opportunities to take on more responsibilities and increase their impact within the organisation.

Here are three helpful employee feedback surveys that you can use 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. Utilising the surveys mentioned above can help your business prioritise becoming an education-first organisation.

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

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

The following surveys will reveal how satisfied your employees are and point towards 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. Although it can be sad when employees leave, their experiences can be taken on board to improve the working conditions of other staff. 

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 within the company. 

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

By providing your employees with training and career development opportunities, you’re demonstrating your willingness 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 remunerating your employees fairly. Building a comprehensive benefits package with competitive remuneration 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: 

It’s often the case that companies with the lowest turnover rates offer some or all of these additional perks, and some companies offer even more. 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.