Employee turnover and retention measure one workforce from opposite sides. Turnover counts who leaves, and retention counts who stays.
U.S. employers recorded 62.8 million total separations in 2025, according to the Bureau of Labor Statistics (BLS, 2025). That figure includes quits, layoffs, retirements, and other exits.
This guide defines both terms, shows the formulas, and lists the metrics worth tracking. It also covers the strategies that lower turnover. HR leaders who track both numbers can see why people leave and what keeps them.
BRAVO, an AI-powered employee recognition and engagement platform by WorkHub, supports the recognition and feedback strategies later in this guide.
What Is Employee Turnover?
Employee turnover is the rate at which employees leave an organization over a set period. It counts resignations, retirements, layoffs, and dismissals. HR teams usually report it as a percentage of average headcount.
Turnover shows how often roles need refilling. A rising rate often points to weak management, low pay, heavy workloads, or unclear career paths. A falling rate usually signals a stable team.
Exits that count toward employee turnover:
- Resignations for another job
- Retirements
- Layoffs and restructuring
- Dismissals for performance or policy breaches
- Fixed-term contracts that are not renewed
Employee Turnover vs. Attrition
Attrition is a departure where the company does not refill the role. Turnover counts every departure, whether or not a replacement follows. Many teams use both terms for the same number, so state which definition your reports use.
A retiring analyst whose role is closed reduces headcount, so it is attrition. If the company hires a new analyst, the same exit is turnover. Both views matter when you plan hiring budgets.
Types of Employee Turnover
HR teams classify employee turnover in three pairs: voluntary and involuntary, avoidable and regrettable, and functional and dysfunctional. Each pair answers a different question about why people leave and what the exit costs.
| Type | Who starts the exit | Typical example | Best response |
|---|---|---|---|
| Voluntary | Employee | Resigns for a higher-paying role | Pay review and growth paths |
| Involuntary | Employer | Layoff or dismissal | Hiring and role-fit review |
| Avoidable | Either side | Quits after months without recognition | Recognition and workload fixes |
| Regrettable | Either side | Top performer resigns | Stay interviews and retention plans |
| Functional | Either side | Low performer leaves | Monitor, no urgent action |
| Dysfunctional | Either side | Key expert leaves and work stalls | Succession and knowledge transfer |
Voluntary and Involuntary Turnover
Voluntary turnover happens when an employee chooses to leave. Typical reasons include a better offer, limited growth, poor management, or burnout. Retention strategies target this group first.
Involuntary turnover happens when the employer ends the employment. Layoffs, restructuring, and performance dismissals fall here. A high involuntary rate often points to hiring mismatches or weak onboarding.
Avoidable and Regrettable Turnover
Avoidable turnover covers exits the company could have prevented. Examples include an employee who leaves after a year without recognition or a clear promotion path. High avoidable turnover shows gaps in management and retention planning.
Regrettable turnover means a high performer or a critical-skill employee leaves. The cost is higher because the company loses results, relationships, and know-how together. Many HR teams track it as a separate rate.
Functional and Dysfunctional Turnover
Functional turnover means a low performer leaves and the team benefits. Dysfunctional turnover means a strong or hard-to-replace employee leaves and the team suffers. Separating the two stops HR from treating every exit as a loss.
What Is Employee Retention?
Employee retention is an organization’s ability to keep its employees over time. It is the share of employees present at the start of a period who are still employed at its end. Most teams report it annually.
A high retention rate usually reflects trust in managers, fair rewards, and visible career paths. A low rate points to the opposite. Retention is also a strategy, not only a number.
Factors that most often shape retention:
- Manager quality and regular one-to-one conversations
- Fair pay benchmarked against the market
- Clear career paths and learning budgets
- Frequent, specific recognition of good work
- Flexible schedules and manageable workloads
Retention work starts before day one. Hiring for role fit and building a structured onboarding plan lower early exits. Our employee engagement guide covers the engagement drivers behind these factors.
Employee Retention vs. Turnover: What Is the Difference?
Employee retention measures who stays, and turnover measures who leaves. The two rates are related but not exact opposites. Retention excludes new hires, while turnover counts every separation, including people hired mid-year.
| Employee retention | Employee turnover | |
|---|---|---|
| Question answered | How many people stayed? | How many people left? |
| Typical cadence | Annual | Monthly, quarterly, or by team |
| Counts new hires | No | Yes, if they leave |
| Signals | Loyalty and stability | Churn and structural problems |
Why the Two Rates Do Not Add Up to 100%
Here is a worked example. A company starts the year with 100 employees. Ten of them leave, and the company hires 10 replacements.
Five of those new hires quit before year-end.
Total leavers are 15. Year-end headcount is 95, so average headcount is 97.5.
Turnover is 15 ÷ 97.5, or about 15.4%. Retention is 90 ÷ 100, or 90%, because 90 original employees stayed.
The two rates add up to more than 100% because the five new-hire exits count only toward turnover. That gap is a signal. It tells HR that onboarding, not just long-term retention, needs attention.
Tracking turnover and retention together is easier when recognition and feedback data sit in one place.
BRAVO combines peer recognition, BRAVO Points, and BRAVO Voice surveys on one platform. HR can then review engagement next to turnover. Book a free BRAVO demo to see how the pieces connect.
How to Calculate Employee Turnover and Retention Rates
You need three inputs: headcount at the start of the period, headcount at the end, and the number of separations. Use the same period for every rate so the numbers compare cleanly.
Employee Turnover Rate Formula
The turnover rate divides separations by average headcount. Average headcount is the start count plus the end count, divided by two.
Turnover rate = (employees who left ÷ average headcount) × 100
If 20 people left a company with an average of 200 employees, turnover is 10%. Split the result into voluntary and involuntary rates for a clearer picture.
Employee Retention Rate Formula
The retention rate divides the employees who stayed by the starting headcount. Count only people who were employed at the start of the period.
Retention rate = (employees at end who were there at start ÷ employees at start) × 100
If 100 people started the year and 90 of them remained, retention is 90%. Don’t count new hires in the numerator.
How to Calculate Regrettable Turnover
Regrettable turnover measures exits you wanted to prevent. Define the group first, for example top-rated performers, critical-skill roles, or high-potential employees.
Regrettable turnover rate = (regrettable exits ÷ average headcount) × 100
If 4 regrettable exits happen in a company averaging 200 employees, the rate is 2%. Also compare it to total turnover. Four regrettable exits out of 20 total exits means 20% of your losses were people you wanted to keep.
What Is a Good Employee Turnover Rate?
No single rate fits every company. The BLS reports that the average monthly total separations rate was 3.3% in 2025, unchanged from 2024. Multiplying by 12 gives roughly 40% a year across the U.S. economy, including layoffs and retirements.
Industry, role type, and company size shift the benchmark sharply. Compare your rate with your own trend line first. Then compare it with peers in your industry.
Employee Turnover and Retention Metrics to Track
Strong employee turnover and retention metrics combine outcomes with early warning signs. Turnover and retention rates tell you what already happened. Engagement and recognition data tell you what may happen next.
| Metric | How to calculate it | What it shows |
|---|---|---|
| Voluntary turnover rate | Employee-initiated exits ÷ average headcount | Preventable churn |
| Regrettable turnover rate | High-performer exits ÷ average headcount | Loss of critical talent |
| Retention rate | Stayers ÷ starting headcount | Long-term stability |
| 90-day new-hire turnover | New hires who left in 90 days ÷ new hires | Onboarding and hiring quality |
| Retention by manager or team | Retention rate split by team | Where managers need support |
| eNPS | % promoters minus % detractors | Loyalty before exits happen |
Leading and Lagging Indicators
Lagging indicators report outcomes. Turnover rate, retention rate, and cost per exit are lagging because the employee has already left.
Leading indicators predict outcomes. Engagement scores, eNPS, pulse survey participation, and recognition frequency by team are leading. A sharp drop in any of them is a prompt to talk with that team.
How Often to Measure
Track turnover monthly or quarterly so you can react quickly. Report retention annually for stability, then split it by department, tenure, and manager. Segmenting often uncovers a single team that hides inside a healthy company average.
How Employee Engagement Affects Turnover and Retention
Employee engagement and turnover move in opposite directions. Disengaged employees often withdraw first and resign later, so engagement scores act as an early warning system.
Three engagement signals deserve a monthly review:
- Pulse survey participation by team
- Recognition given and received by team
- eNPS by manager
A drop in participation often appears before a drop in scores. Teams that stop responding have usually stopped believing anything will change. Acting visibly on survey results rebuilds that belief.
BRAVO Voice supports pulse surveys and continuous feedback, so HR can run short check-ins instead of one annual survey. Our guide to the employee satisfaction survey explains how to write questions that surface real retention risks.
Why Employee Turnover and Retention Matter
Employee turnover and retention affect cost, knowledge, and team performance at the same time. Every exit triggers recruiting, onboarding, and a ramp-up period before the replacement works at full speed. Teams also absorb extra work while the role stays open.
Use this formula to estimate your own cost:
Cost per exit = recruiting cost + onboarding cost + training cost + lost output during ramp-up
As an illustration, assume one exit costs $20,000 all-in. A company that loses 20 people a year then spends $400,000 on replacement.
Cost is only part of the damage. Experienced employees carry context that new hires need months to build. Remaining staff also take on extra work, which raises burnout and can trigger the next resignation.
Common Causes of High Employee Turnover
High employee turnover rarely has one cause. Exit data usually points to a handful of repeating patterns, and most of them sit within management’s control. Review them before you pick a retention strategy.
The causes that appear most often:
- Weak management: unclear expectations, little feedback, and no career conversations.
- No growth path: employees cannot see a next role or a way to build skills.
- Low recognition: good work goes unnoticed for weeks or months.
- Poor role fit: the job differs from what the hiring process promised.
- Workload and burnout: a few people absorb the work of open roles.
- Pay gaps: salaries lag the market, or pay decisions feel unfair.
Treat this list as a hypothesis, not a diagnosis. Your own exit interviews and stay interviews should confirm which causes apply to which teams. A cause that dominates sales may not matter in support.
Segment the data before acting. Split exits by manager, tenure, and role, then look for clusters. A cluster of exits under one manager points to a coaching problem, not a company-wide pay problem.
Proven Strategies to Reduce Turnover and Improve Retention
The best strategies to reduce employee turnover target the reasons people leave. Combine several, and measure each against the metrics above.
Hire for Fit and Onboard Well
Early turnover often starts with a mismatch between the role and the hire. Use structured interviews and a clear 90-day plan. Pair every new hire with a buddy who answers the small questions managers never hear.
Listen Before People Leave
Stay interviews ask current employees what keeps them and what might push them out. Run them twice a year with top performers. Pair them with short pulse surveys so you hear from quieter employees too.
Add structured exit interviews as well. Ask each leaver the same five questions so patterns appear across teams. Share the themes with managers every quarter.
Recognize Good Work Often
Recognition is one of the cheapest levers on avoidable turnover. Employees who hear specific praise from peers and managers see that their work is noticed. Our guide to employee recognition strategies that work shows how to build a program that lasts beyond the launch month.
BRAVO’s rewards and recognition tools let peers recognize each other and award BRAVO Points that employees redeem for rewards.
Invest in Career Growth
Employees leave when they can’t see a next step. Build individual development plans, fund learning, and make internal moves easy to apply for. Goal-tracking tools such as BRAVO Focus connect personal goals to team objectives so growth stays visible.
Support Managers
Managers shape the daily experience, so retention often differs more by manager than by company. Track retention by manager and coach the lowest-scoring teams first. Train managers to hold regular one-to-ones focused on growth, not only status updates.
Review Pay, Benefits, and Flexibility
Pay alone rarely keeps people, but unfair pay pushes them out. Benchmark salaries every year and share the results in plain terms. Add flexible schedules or hybrid options where the work allows them.
How BRAVO Supports Employee Retention
BRAVO helps HR teams act on the engagement drivers behind retention. It brings recognition, rewards, feedback, and goals into one platform with Slack and Microsoft Teams integrations. Teams can recognize colleagues where they already work.
What each part contributes:
- Peer recognition keeps appreciation frequent and visible.
- BRAVO Points turn recognition into redeemable rewards.
- BRAVO Voice collects pulse surveys and ongoing feedback.
- BRAVO Feats runs team challenges that build connection.
- Focus links individual goals to team objectives.
Pair these tools with the metrics in this guide. For example, compare recognition frequency by team with retention by team each quarter. A team where managers have not recognized anyone in 30 days is a natural place to start a stay interview.
Next Steps to Improve Employee Turnover and Retention
Start with one honest number. Calculate your voluntary turnover rate and your regrettable turnover rate this week. Then choose one team with the weakest retention and run a round of stay interviews.
Employee turnover and retention improve when measurement leads to visible action. Recognition, regular feedback, and clear career paths give people reasons to stay. Review the numbers every quarter and adjust.
To see recognition, feedback, and goals working together, book a free BRAVO demo. You can walk through a retention scenario with your own team structure.
Employee Turnover and Retention FAQs
Retention measures how many employees stay over a period, and turnover measures how many leave. Retention excludes new hires, while turnover counts every separation, including new hires who quit.
The rates are related but do not add up to 100%. Track both for a complete view of workforce stability.
No universal target exists because industry, role type, and company size change the baseline. The BLS reported an average monthly total separations rate of 3.3% across the U.S. in 2025. Compare your rate with your own history and with peers in your industry, then focus on voluntary and regrettable exits.
Divide the number of regrettable exits by average headcount and multiply by 100.
Define “regrettable” in advance, such as top-rated performers or critical-skill roles. Then compare regrettable exits to total exits. A 2% regrettable rate can still mean one in five departures was someone you wanted to keep.
Low engagement often appears before resignations, which makes engagement scores an early warning. Falling pulse survey participation, weaker eNPS, and fewer recognition moments in a team are common signals. Reviewing them monthly gives HR time to act through stay interviews, manager coaching, or workload changes before people leave.
Measure turnover monthly or quarterly so you can react quickly to spikes. Report retention annually to judge long-term stability, then split it by department, tenure, and manager. Review leading indicators, such as pulse survey scores and recognition frequency, every month because they change before turnover does.
Turnover counts every employee departure, whether or not the company hires a replacement.
Attrition counts departures where the role is not refilled, so headcount shrinks. Many HR teams use the terms interchangeably, so state your definition in reports. Use turnover for hiring-cost planning, and attrition for headcount planning.
He is an SEO strategist and content writer focused on employee engagement and SaaS marketing. He creates data-driven content that ranks on Google and AI search while helping businesses improve motivation, productivity, and retention.
