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What is employee turnover rate?

HR & Workforce Planning

Employee turnover rate is the share of an organization's employees who leave during a period, usually a month or a year. It is the number of separations divided by average employment, times 100. Teams often split it into voluntary and involuntary turnover and track regrettable attrition, the loss of employees they wanted to keep.

How employee turnover rate is defined

Employee turnover rate measures how many employees leave an organization during a period, relative to its size. A common formula is:

Employee turnover rate = separations during the period ÷ average number of employees during the period × 100

The U.S. Bureau of Labor Statistics uses the same structure in its Job Openings and Labor Turnover Survey (JOLTS), where the separations rate is the number of separations divided by employment, multiplied by 100. For an annual rate, a BLS paper on annual estimates divides the year's total separations by average monthly employment. For example, a company with 24 separations in a year and an average of 200 employees has an annual turnover rate of 12%.

JOLTS groups separations into three types:

  • Quits: Employees who left voluntarily, except retirements and transfers to other locations.
  • Layoffs and discharges: Involuntary separations initiated by the employer.
  • Other separations: Retirements, transfers to other locations, deaths, and separations due to disability.

Organizations make different choices about what to count. Some include temporary and seasonal staff, and some do not. Some count internal transfers between teams as turnover for the team, and others count only exits from the company. Some report monthly rates, and others annualize them. Comparing rates across teams or companies only works when these choices match.

Regrettable attrition: Many teams track departures of employees they wanted to keep separately from overall turnover. The idea traces back to research such as Dalton, Todor, and Krackhardt, "Turnover overstated: The functional taxonomy," Academy of Management Review, vol. 7, no. 1 (1982). The authors argued that sorting turnover only into voluntary and involuntary overstates its harm, since some voluntary turnover is functional for the organization. Usage of "regrettable" varies. Teams define it by performance, role criticality, manager judgment, or a mix.

Why employee turnover rate matters for talent teams

Turnover drives hiring demand. Each departure can open a requisition, so turnover assumptions shape headcount planning and recruiter capacity, and they affect how teams read time to fill.

A company-wide rate can hide the population that needs attention. Breaking turnover down by role, level, team, and location shows where departures concentrate. It also helps to separate observed exits from predicted risk, and internal moves from external losses. A transfer from one function to another is an outflow for the first function and an inflow for the second, not a loss for the company.

Turnover among new hires is a narrower measure. Recruiting metrics such as new hire retention track whether people hired in a period are still employed after a set time, and early attrition is 100 minus that retention rate.

How Findem approaches employee turnover rate

Findem Market Intelligence enables comparison across companies and teams using attributes such as experience mix, tenure, attrition, and representation.

Findem includes predictive workforce analytics. Its attrition prediction identifies flight risk ahead of departures to support headcount planning, performance forecasting, and regional trend analysis. Findem's guidance is to keep modeled signals separate from recorded departures and to review context before acting.

Findem's ROI guidance treats regrettable attrition as an outcome metric, reviewed alongside retention at defined milestones, internal mobility, and time to productivity. The Findem Studio talent flow template shows an example report, built with sample data, of observed joiners, departures, and net flow for one company and role.

Further reading

Related terms

Sources

Frequently asked questions.

Divide the number of separations during a period by the average number of employees during that period, then multiply by 100. For example, 24 separations in a year with an average of 200 employees gives an annual turnover rate of 12%. BLS uses the same structure for its JOLTS separations rate.

Voluntary turnover covers employees who choose to leave, which JOLTS calls quits. Involuntary turnover covers separations the employer initiates, such as layoffs and discharges. JOLTS counts retirements, transfers to other locations, deaths, and disability separations as other separations.

Regrettable attrition is the departure of employees the organization wanted to keep. Teams define it in different ways, such as by performance, role criticality, or manager judgment. Tracking it separately shows whether turnover is costing the business people it needed, which an overall rate can hide.

The terms are often used interchangeably, and usage varies. Some teams use attrition for departures that are not backfilled, or for voluntary exits only, and turnover for all separations. Whatever terms you use, write down what each one counts so rates can be compared over time.

Findem Market Intelligence compares companies and teams on attributes such as tenure and attrition. Findem's attrition prediction identifies flight risk ahead of departures to support headcount planning, and Findem's guidance is to keep those modeled signals separate from recorded departures.