Turnover rate is the percentage of employees who leave an organization during a defined period. Also called “labor turnover rate” or “staff turnover rate,” it helps HR teams assess workforce stability and identify areas where retention may be a concern.
Viewed in the context of organizational structure, turnover rate is more than a number on an HR report. It is a lagging indicator that can reveal problems with role clarity, manager capacity, and reporting lines.
What Is Turnover Rate?
Turnover rate is the percentage of an organization’s workforce that leaves during a defined period (also known as “labor turnover rate” or “staff turnover rate”).
This metric covers both voluntary and involuntary departures, though it often excludes internal moves (e.g., promotions, transfers) as well as extended leave, such as maternity leave or sabbaticals, when the employee remains with the organization.
Turnover Rate vs. Retention Rate
Turnover rate and retention rate measure opposite sides of workforce movement. Turnover tracks employees who leave; retention tracks employees who remain.
Knowing the difference helps HR teams interpret workforce trends and avoid treating the two metrics as interchangeable.
| Turnover Rate | Retention Rate | |
| What It Measures | % of employees who leave | % of employees who remain |
| Direction | Higher % = more turnover | Higher % = more retention |
| Formula Relationship | Turnover Rate = 100% − Retention Rate | Retention Rate = 100% − Turnover Rate |
This relationship holds only when both metrics are calculated using the same method and time period. If the underlying calculation conventions differ, the two figures may not add up to exactly 100%, see our guide to retention rate for how that plays out.
Voluntary vs. Involuntary Turnover
Voluntary turnover occurs when employees choose to leave, such as when they resign for another job or personal reasons.
Involuntary turnover occurs when the organization ends the employment relationship, such as through termination or a layoff.
Separating these categories allows HR teams to diagnose turnover more accurately.
Higher voluntary turnover can signal a retention problem. Higher involuntary turnover may reflect workforce restructuring, performance decisions, or other organizational factors.
How to Calculate Turnover Rate
Turnover Rate = (# of Employees Who Left ÷ Average # of Employees) × 100
For Example:
If 25 employees leave a company that has an average workforce of 500 employees during the year:
(25 ÷ 500) × 100 = 5%
The company’s annual turnover rate is 5%.
This formula works for a straightforward turnover calculation. However, calculations can differ based on whether you are measuring turnover monthly, annually, or over another period, as well as how employee departures are counted.
See our detailed guide to calculating employee turnover rate for a deeper look at calculation methods and considerations.
What Is a Good Turnover Rate? (Benchmarks)
No single, universal turnover rate qualifies as “good.” In general, a lower turnover rate means more employees are staying with the organization, but the right benchmark depends on factors such as industry, workforce composition, and whether departures are voluntary or involuntary.
Industry and workforce benchmarks can help show whether your organization’s turnover is comparatively high or low, but the most meaningful comparison is often against your own historical rate and where turnover is concentrated.
Turnover Rate Benchmarks by Industry
US Bureau of Labor Statistics (BLS) separations data provides a useful reference point for comparing employee separations across industries. In 2025, the annual average total separations rate was 3.3% across all industries, with significant variation by sector.
One thing to note: According to BLS, “total separations” include quits, layoffs, and discharges, and other separations such as retirements, deaths, disabilities, and transfers to other locations. This indicates that BLS figures may be higher than an organization’s turnover rate calculated from employee departures alone.
| Industry | 2025 Annual Average Total Separation Rate |
| Information | 2.8% |
| Retail Trade | 3.8% |
| Healthcare / Social Assistance | 2.9% |
| Finance / Insurance | 2.1% |
| Manufacturing | 2.4% |
| Government | 1.5% |
| Accommodation / Food Services | 5.5% |
Source: U.S. Bureau of Labor Statistics, Job Openings and Labor Turnover Survey (JOLTS), 2025 annual averages.
BLS data shows why industry context matters when evaluating turnover. A rate that is relatively high compared to the national average may be closer to the “norm” in an industry with more frequent employee movement.
SHRM provides another benchmark for HR teams focused specifically on voluntary departures. Its 2025 CHRO Benchmarking research found a 12% median voluntary turnover rate, giving organizations another reference point for evaluating employee departures.
Turnover Rate Benchmarks by Company Size
Company size does not determine a single benchmark turnover rate, but it does affect how an organization should interpret its overall number.
As workforces grow, an organization-wide rate can become less informative if you lack an understanding about where and why turnover is occurring.
| Company Size | What to Know When Interpreting Turnover |
| 100–249 Employees | Each employee departure has a greater effect on the overall rate, making turnover in individual teams or roles more visible. |
| 250–999 Employees | Turnover can vary substantially across functions and management levels, making the company-wide rate less useful on its own. |
| 1,000+ Employees | A company-wide rate can mask high-turnover pockets within specific teams, roles, locations, or reporting structures. |
Mercer’s Global Talent Trends research also reinforces why turnover should be interpreted alongside the factors shaping employees’ decisions to stay or leave. Its research identifies career advancement, compensation, and learning and development among the factors associated with employees leaving.
For organizations with 100 or more employees, the overall turnover rate is a starting point, not the whole picture. Breaking turnover down by department, role, manager, or reporting structure can show where departures are concentrated and whether the issue is broad or localized.
Causes of Employee Turnover
Commonly cited causes of employee turnover include:
- Compensation: Employees may leave when pay or benefits do not meet their expectations or keep pace with the market.
- Management and Leadership: Poor communication, limited support, or ineffective leadership can contribute to employee departures.
- Lack of Growth Opportunities: Employees may leave when they see limited opportunities for advancement, skill development, or career progression.
- Culture and Work Environment: A negative workplace culture, low trust, or poor team dynamics can make employees more likely to leave.
- Work-Life Balance: Excessive workloads, inflexible schedules, or limited flexibility can contribute to turnover.
Understanding how these factors connect to team structure, role design, and reporting lines can reveal deeper organizational drivers of turnover.
How to Reduce Employee Turnover
Reducing turnover starts with pinpointing why employees leave and addressing the factors an organization can influence. Common approaches include:
- Conduct Stay Interviews: Ask employees what keeps them engaged and what might cause them to leave.
- Use Exit Interviews: Look for recurring patterns in why employees leave and where those patterns occur.
- Review Compensation: Evaluate pay and benefits against market conditions and internal equity.
- Strengthen Manager Training: Give managers the skills to communicate clearly, support employees, and address concerns.
- Create Clearer Growth Paths: Make advancement opportunities, career paths, and development expectations easier for employees to understand.
How Organizational Structure Impacts Turnover
Turnover is not always a company-wide problem. A pattern of departures within one team may reflect an individual leader, but it can also reveal a structural issue.
How a department is organized can either support or constrain its leaders through factors such as span of control, role clarity, and reporting design. Those structural conditions can shape workloads, accountability, and employee experience, and ultimately, contribute to turnover.
Span of Control and Turnover
Span of control affects how much management capacity is available within a team.
When managers have too many direct reports, employees may receive less support and feedback, which can contribute to disengagement and voluntary departures.
Examining turnover alongside span of control can help identify whether teams with unusually broad management responsibilities also experience higher turnover.
Role Clarity and Turnover
Role clarity helps employees understand their responsibilities, how their work fits into the organization, and where they can grow.
When responsibilities or advancement paths are unclear, employees may become disengaged or look elsewhere.
Comparing turnover across roles can help reveal whether unclear responsibilities or limited career paths are contributing to higher departures.
Reporting Lines and Manager-Level Turnover
Reporting lines show where responsibility and management oversight sit within the organization.
If turnover repeatedly clusters within one reporting line, the pattern can help identify whether the issue is isolated to a leader or reflects broader conditions within that part of the structure.
Compare turnover across managers and teams. Then, examine differences in span of control, role design, and workload to determine whether the pattern points to an individual leadership issue or a structural one.
Turnover Rate and Org Design: Why Visibility Comes First
Turnover rate alone cannot show where departures are happening or what conditions may be contributing to them.
Before deciding whether turnover reflects a broader culture issue or a structural one, organizations need a clear view of how teams, roles, managers, and reporting lines are organized.
Organizational visibility makes it easier to examine span of control, role clarity, and reporting lines alongside turnover patterns. It can help determine whether turnover is isolated to a specific team or leader or points to a broader issue.
For HR and workforce planning teams, the first step is to visualize your org structure and reporting lines alongside the workforce data used to understand turnover.
This visibility also provides a foundation to plan your organizational structure as teams, roles, and workforce needs change.
See Where Structural Gaps Are Driving Turnover
OrgChart gives HR and operations teams a clear view of reporting lines, span of control, and role definitions, so you can see whether turnover is concentrated in specific teams or structural gaps before it becomes a company-wide retention problem.
FAQ
There is no single healthy turnover rate for every organization with 100+ employees. Industry, workforce composition, and voluntary versus involuntary departures all affect the benchmark.
For larger organizations, the overall rate should also be evaluated alongside turnover by department, role, manager, and location. A stable company-wide rate can still conceal elevated turnover in a critical team or function.
Turnover rate and attrition rate are often used interchangeably, but they describe slightly different workforce changes.
Turnover refers to employees leaving and being replaced. Attrition refers to employees leaving without replacement (resulting in headcount reductions).
No. A high turnover rate does not automatically indicate an organizational problem.
Rapidly growing companies may experience higher turnover as they expand their workforce. In other cases, industries such as hospitality historically have more employee movement.
Planned restructuring, seasonal work, or changes in business strategy can also increase turnover. The key is to examine why employees are leaving and where turnover is concentrated.
Labour turnover rate measures the percentage of employees who leave an organization during a defined period (written as “labor turnover rate” in the US).
Most organizations calculate turnover annually for reporting and benchmarking. Companies with 100+ employees can benefit from reviewing the metric more frequently.
Quarterly or monthly tracking can help identify sudden increases in turnover within a team, department, or reporting group before they become visible in the annual rate.
More frequent reviews are especially useful when turnover is changing quickly or concentrated in specific parts of the organization.