How to calculate turnover rate: Free calculator + retention guide

With one in three employees in the United States ready to jump ship — and 3.2 million doing so in March 2026 alone — no organization can completely avoid sudden spikes in turnover.(1, 2) A few resignations in a short window can trigger a domino effect. The wave of departures is accompanied by ballooning workloads that lead to burnout, tanking productivity among remaining employees, and budgets and people teams stretched thin to replace the vacancies.

This guide explains how HR leaders can catch rising turnover rates before they spiral out of control, but it doesn’t stop at basic measurement. We’ll also explore how to interpret the results of Leapsome’s turnover rate calculator to find out what’s going on, so HR teams can take swift, targeted action to boost retention.

1. Leapsome’s Workforce Trends Report, 2026

2. Bureau of Labor Statistics, 2026‍

What is the employee turnover rate?

Employee turnover rate measures how many employees leave an organization within a specific period, typically one year. It’s expressed as a percentage to indicate which portion of the workforce has departed within the timeframe. 

As a popular business metric to monitor the health of an organization, calculating employee turnover rate helps assess a company’s management effectiveness over time.

There are two primary types of employee turnover:

• Voluntary turnover: Employees leave an organization by choice, with reasons for the departure ranging from personal duties (like caretaking or following a passion in a different field) to a toxic work environment.
  
  
• Involuntary turnover: Team members are asked to leave, either because of employee-specific issues, like poor performance and conduct violations, or due to business concerns, such as budget cuts or changing priorities.

The impact high turnover can have on your business

Too many employees leaving their positions over a short period can have far-reaching and long-lasting adverse effects on your company’s performance. That’s why employee retention is so important for creating a dynamic and resilient workplace.

Here are some of the consequences an organization with a turnover problem may face:

• A weak and unstable company culture — Culture is the bedrock of an organization, but it’s also a significant indicator of its health. Employees leaving can cause their colleagues to question whether they’re happy with their jobs. They may wonder what’s going on behind the scenes if many people are moving on to other opportunities, which could result in them displaying behavior that doesn’t align with your company’s culture. For instance, a business encouraging radical candor may notice staff not openly sharing their concerns.
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• Mounting hiring and onboarding costs — Experts say replacing an employee can cost three or four times their salary. If you have high turnover, you must keep allocating your budget toward expenses like job advertising, interviewing, and onboarding instead of investing in your people’s growth and development.
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• Lower-than-usual productivity levels — When teams can’t work at regular capacity, they find it harder to match their usual output. For example, if your programming department loses two or three people, even if everyone works just as hard as before, the entire team will still write less code. Staff is also at a much higher risk of burnout if forced to work over capacity.
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• Dissatisfied customers and clients — When capacity and productivity levels are lower, companies might struggle to meet their usual service standards. Customers may feel disappointed, give you negative feedback, or even turn to your competitors.
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• A breakdown in team cohesion and well-being: It’s difficult for employees to connect with their colleagues on teams with high turnover, but those relationships are necessary for a resilient, mutually supportive work environment. At the same time, managers have a hard time appropriately redistributing workloads as employees drop off. Burnout and dipping morale caused by too much work and not enough support create a negative feedback loop that can accelerate a climbing turnover rate.

• An escalating number of resignations — As staff leaves, they may also inspire their coworkers to quit. A recent Visier study found that people are 9.1% more likely to quit when a colleague does, and that number can be even higher for smaller, more close-knit teams.‍

From productivity levels to employee morale, the above turnover data demonstrates that a decline in employee retention rate will only decrease a company’s performance. It’s vital to measure turnover to identify meaningful patterns in how employees enter and, more importantly, exit your organization. Here’s how to calculate the employee turnover rate at your company.

“Disengaged employees who stay quietly can drain a company faster than those who leave. Engagement isn’t about who stays, it’s about who contributes with energy and ownership.” — Emma Leeds, Founder and CEO of People Function

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How to use our employee turnover rate calculator

You can find your turnover rate in seconds using our calculator. Here’s how: 

• Choose your starting point: If you already have the average headcount for the period you’re investigating, set the “Calculate average number of employees” toggle to “No.” Otherwise, choose “Yes” to let the calculator do the heavy lifting.

• Enter employee data: If you chose not to have the calculator crunch the average number of employees, input that number yourself. Otherwise, enter how many employees your organization had at the beginning and end of the window you’re looking at. For either option, finish by entering how many employees left the company during that same period.

• Review your turnover rate: Once you’ve loaded all the data, the calculator will automatically display your turnover rate. Benchmark it against industry standards and compare it to other metrics in your HR dashboard, such as employee engagement ratings or absenteeism, to start unraveling the story behind the numbers.

What’s the formula for calculating employee turnover rate?

To calculate how many employees departed from your company during a given period, use the following formula:

Employee turnover rate % = The number of employees who departed / [(Beginning + ending headcount) / 2] x 100 

Take a look at how to apply the turnover rate formula at your organization. 

How to calculate employee turnover rate (step-by-step) 

You need a few metrics to calculate the employee turnover rate, including the total number of employees at the start and end of a given period. For example’s sake, this step-by-step guide will solve the annual turnover rate. Let’s take out our calculators and get started.

Step 1: Select a time period 

There are various time frames to calculate your company’s turnover rate, whether monthly, quarterly, semi-annual, or annual. It’s essential to select a relevant time frame when calculating your company’s turnover rate to spot meaningful patterns in your data. 

For example, if you calculate your turnover rate quarterly, you can have four timely percentages to compare at the end of the year. From here, you can contemplate how various changes within each quarter, such as individual employee performance reviews or department-wide budget cuts, influenced your employee turnover rate over time.

Step 2: Calculate the number of employees who departed

Once you’ve selected a time frame, look up the exact number of workers employed at the start of the period. For example, if you calculate your quarterly turnover rate from January to March, identify your starting headcount on January 1. Next, identify the remaining headcount of active employees on March 31. 

From here, subtract your remaining headcount from your starting headcount to calculate the number of employees who left your organization during your selected time frame.

Step 3: Calculate the average number of employees 

The next step in the employee turnover formula is calculating your average number of employees. As the name might suggest, this figure refers to the average workforce size during your chosen period. It’s calculated by adding the number of employees at the start and end of a period and then dividing the sum by two.

Step 4: Apply the formula

At this point, you should have two numbers to plug into the employee turnover rate formula: your number of employee departures and your average number of employees within a certain period. 

First, divide the number of departures by the average number of employees. Then, multiply that figure by 100 to determine your final turnover percentage.

‍A step-by-step example

Unless you’re a mathematician, the sheer amount of numbers in the turnover rate formula can be intimidating. Fortunately, they don’t have to be. Consider the following example to illustrate the calculation process from beginning to end:

Imagine you work for a travel insurance company and want to calculate your turnover rate for the second quarter of the year (Q2). You had 300 employees at the start of April 2023 and were down to 280 by June 30. 

First, find the number of employees who departed in Q2:

300 starting headcount - 280 ending headcount = 20 employee departures

Next, determine the average number of employees you had during Q2 2023: 

300 starting headcount + 280 ending headcount / 2 = Average number employees

580 / 2 = 290 average employees

The final step is putting the above calculations into the employee turnover formula: 

(20 employee departures / 290 average employees) x 100 = Employee turnover rate

0.068 X 100 = 6.8% employee turnover rate 

In this example, your quarterly employee turnover rate is 6.8%.

Other turnover rate calculations

When it’s time to calculate the turnover rate, sometimes you look for more than just time-based insights, like quarterly or annual calculations. For instance, maybe you’d prefer to calculate the voluntary turnover rate versus the involuntary.

Select a timeframe just like you did above to get started on your voluntary and involuntary turnover calculations. However, when calculating the number of employees who departed, only factor in the number of employees who left willingly for your voluntary turnover rate and only factor in the number of employees who were asked to leave for your involuntary turnover rate. 

For instance, imagine you have a 100-person workforce but 10 left voluntarily over the past month. 

100 starting headcount - 90 ending headcount = 10 voluntary departures

100 starting headcount + 90 ending headcount / 2 = 95 average employees

(10 voluntary departures / 95 average employees) x 100 = 10.5% voluntary turnover rate 

You can also calculate turnover based on tenure, department, role, or demographic. For example, you can calculate the new hire turnover rate by using the number of new hires at the start of a period as your starting headcount and following the rest of the formula as usual.

How to interpret your company’s turnover rate

Calculating your staff turnover rate is a starting point, not a destination. The next step is analyzing your findings, so you can figure out what’s going on and course-correct if needed.

First, you’ll need to know what’s considered a “good” employee turnover rate (since some turnover is always inevitable). According to the U.S. Bureau of Labor Statistics, the average employee turnover rate in private industry was 3.3% per month in 2025. But whether that’s a strong turnover rate for your company depends on your field. For example, the same data reports that the average turnover for finance and insurance companies was 2.1% per month, whereas the average for leisure and hospitality positions was 5.6%.

Once you have an idea of how your turnover rate stacks up against industry benchmarks, you can examine other pieces of the puzzle to uncover what’s behind it. Structure your analysis around three core questions: Who’s leaving, when are they leaving, and why are they leaving?

Who’s leaving?

If senior management or top contributors are the most common roles on their way out, you may be facing a retention emergency even if the turnover rate looks good on paper. If most departures are entry-level roles or coming from the bottom of your organizational structure, you might be facing barriers to growth or poor management performance, but your turnover rate is probably accurately representing the situation at hand.

When are they leaving?

Reviewing when people choose to leave can help you pinpoint where your HR strategy might be lacking. If new hires typically only last six months, for example, review your training and onboarding programs to see where they might be leaving new team members feeling overwhelmed or undersupported. Talk to the interviewers as well: There may be a gap between how they’re portraying the company to applicants and how the work actually goes.

Keep an extra-close eye on turnover during periods of major organizational change, such as leadership transitions or large layoffs. Monitoring who heads for the door can tell you how the change is landing and what to tinker with if the numbers don’t stabilize.

Why are they leaving?

Tracking employees’ stated reasons for leaving helps you spot and mitigate harmful patterns. Each exit interview should drill down into the specifics of the employee’s decision, and HR should track and categorize those reasons over time. This data provides a shared reference point to help management, leadership, and remaining team members to find solutions for recurring retention issues.

Top five causes of employee turnover

Employee turnover can strike any segment of your workforce, from recently onboarded new hires to long-standing department veterans. The only way to address a high turnover rate is by getting to the root of the problem. Consider the top five causes of employee departure that could lead to a higher-than-desired turnover rate at your organization.

1. Underwhelming compensation packages

If your company is paying below the industry standard, it’s easy for competitors to lure your top talent away with better offers. And more of your team might be ready to resign than you think. 38% of professionals are dissatisfied with their current salary, while 19% would consider leaving their jobs for better benefits, such as more PTO or learning and development stipends.

2. A lack of career advancement and learning opportunities

Most people want to advance in their careers. When their employer doesn’t show them a clear path to reach their goals, they can become frustrated with the stagnation and look elsewhere. In fact, Hays reports that 24% of surveyed employees would leave their current role for a promotion at a different company.

When a promotion isn’t in the cards, robust learning and development programs can patch the gap — 40% of professionals changing jobs in 2022 did so due to a lack of development opportunities. Covering additional training opportunities, like classes and certification programs, lets employees continue developing their skills without a promotion.

3. Lackluster onboarding processes

New hires frequently report that onboarding processes are inadequate. A recent survey discovered many new hires didn’t think their employers had fully integrated them into the company culture or properly trained them on their tech stack. Problems like that are likely responsible for 40% of recently hired professionals actively searching for a new job.

4. Low trust in leadership

There’s a saying about turnover that goes, “Employees don’t leave companies; they leave managers.” It’s true — research shows managers can contribute to a company’s turnover problem with the following bad habits:

• Giving feedback too frequently or infrequently
• Not showing any interest in team development
• Setting unclear expectations
• Appearing to show a preference toward certain employees

All of the above can frustrate your staff, make them feel unsupported, and prevent them from realizing their full potential. Even worse, these habits contribute to a toxic company culture. Managers and their direct reports forget they’re on the same team, and the chance of smooth collaboration drops. And when workplaces turn toxic, a massive 90% of workers think about quitting.‍

5. Life changes

Many employees resign because major life events change their situation or priorities, and they don’t get sufficient support or accommodation from their employers. 

For example, new parents may quit their jobs when they can’t reconcile their schedules with childcare needs. Or someone who’s struggling with a new health condition might not be able to come into the office regularly and might resign if they can’t set up a remote or flexible work arrangement.

However, professionals going through changes in personal circumstances may be able to stay in their positions if their employers are empathetic and flexible about their working conditions.

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Nine tips to improve employee retention

Once you understand the causes of high employee turnover in your organization, you can explore solutions. Try using employee retention incentives or attending HR conferences to find the most innovative strategies. Here are some popular ideas:

1. Offer competitive salaries and benefits

Show your people you value their work with generous compensation packages. If your budget restricts your compensation management, aim to offer at least above the industry average.

Similar to salaries, offering a competitive benefits package is a great retention strategy. To make the most out of this approach and keep to your budget, investigate which benefits your people need or desire most and prioritize those.

2. Build a fair and transparent promotion process

Show your staff what they can achieve at your company with clear career paths. Once they know what opportunities exist, they’ll be more likely to pursue them with you than look for them externally.

3. Focus on learning and development

71% of employees say they’d like more opportunities to upskill. Meet their needs and reduce turnover by offering career development opportunities like training, mentoring, and seminars.

4. Recognize and reward excellent employee performance

Companies with effective recognition programs have staff members who are 56% less likely to be actively job hunting. Employee recognition can be a cost-effective way to reduce turnover and build a more positive work environment for everyone to enjoy. These can be simple initiatives like bulletins about employee achievements or a Praise Wall.

5. Foster a feedback culture

Consistent feedback is vital to organizational health. And when you normalize exchanging feedback, you create a work environment where your team feels comfortable sharing their opinions and receiving constructive criticism. That means employees feel like they have a voice and problems get solved faster.

6. Introduce flexible work schedules

Make your business more accommodating by letting staff work from home and choose their hours. It shows you understand their needs and helps those juggling other responsibilities stay at your company.

7. Boost employee engagement

Companies with engaged staff have up to 43% less turnover. Using engagement surveys to discover what motivates your team and acting on those findings can be a cost-effective way to reduce turnover. Don’t forget to check your employee NPS (eNPS) score to see whether your engagement levels are low.

8. Ensure a healthy work-life balance

Protect your people from burnout and show you recognize the importance of their lives outside work by encouraging them to take regular breaks and leave the office on time. Also, check in with your reports frequently to verify whether you’ve given them realistic workloads and deadlines.‍

9. Fine-tune your hiring process

Hiring candidates for cultural alignment instead of focusing solely on skills and experience increases the chances they’ll integrate into your company well and stay for the long haul. 

Communicate company values in job postings and interviews so candidates can make a fully informed decision about whether they’d enjoy working with your company. Once you’ve offered someone a position, connecting with your new hire frequently before their start date can increase their willingness to commit to your organization by up to 87%. 

When it’s time to get to work, set new hires up for success by following a comprehensive onboarding plan and scheduling regular feedback sessions, especially in the first 30, 60, and 90 days.

Achieve a healthy turnover rate with Leapsome

Given the damage high turnover rates can cause, it’s natural to be concerned about your company’s retention rate. But with the proper knowledge and close monitoring of the situation, you can reduce employee turnover and keep it low.

HR software solutions like Leapsome can help you maintain high retention rates. Our HRIS and people management platform automates the repetitive, time-consuming parts of performance reviews and onboarding. That leaves you more time to focus on supporting your people and helping them grow. 

We also provide a flexible Competency Framework and Compensation module so you can build fair, consistent, and transparent processes that put your employees first.

Elevate your company’s retention strategy and empower your workforce with Leapsome, the all-in-one intelligent people enablement platform. Request a demo today!

“With Leapsome, we’ve seen some amazing improvements. The initiatives we identified from the survey results decreased our turnover by 12.2%, increased our survey participation rate to 82%, and it made people more productive and excited to come to the office.” — Natasa Kovacevic, People and Culture Manager at Eurowings Digital

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FAQ

Is employee turnover bad?

Employee turnover is not bad when the number of employee departures does not impact organizational workflow or productivity or negatively influence other employees. Some turnover is necessary to infuse new talent into an organization. However, employee turnover can be bad when the turnover rate surpasses the employee retention rate, leaving positions unfilled. 

Why is the employee turnover rate important to measure?

It’s important to calculate turnover to identify meaningful patterns in your people engagement processes, including onboarding effectiveness, feedback culture, and management styles, to determine how these patterns correlate with losing employees and how to fix them.

What’s a good turnover rate?

There is no specific ‘good’ turnover rate; individual turnover rates should be compared to industry standards. The average turnover rate is 47%, though that figure has been inflated by industries like hospitality, where the turnover rate is much higher (82%). 

Is a high turnover rate good?

No, a high turnover rate is not good. High turnover indicates that many of your employees are leaving your organization. A high voluntary turnover rate indicates that many employees leave due to dissatisfaction. In contrast, a high involuntary turnover rate suggests that organizational restructuring or budget cuts negatively influence your workforce. 

Is a low turnover rate good?

A low turnover rate is excellent. In most companies, low turnover suggests that most employees, including top performers, remain in their positions. However, a certain degree of employee turnover is still welcomed to invite new talent to join the organization in their place.