High turnover hurts. It slows down teams, burns out your best people, and costs way more than most leaders realize. But before you can fix it, you need to track it, and that starts with a simple question:
What’s your turnover rate?
Here’s how to calculate it, what the number actually tells you, and what to do if it’s headed in the wrong direction.
The Simple Turnover Formula
Here’s the standard turnover formula most HR teams use:
(# of Employees Who Left ÷ Average # of Employees) × 100
Let’s say you had 12 people leave last year, and your average headcount was 80.
(12 ÷ 80) × 100 = 15% turnover rate
That’s it. You can run it monthly, quarterly, or annually, whatever helps you spot trends.
A few tips:
Use voluntary turnover separately if possible.
Contractors and seasonal workers? Only include them if you’re tracking their exits too.
For average headcount, just add your starting and ending total, then divide by 2.
What’s a “Normal” Turnover Rate?
Turnover rates vary by industry, but in general:
10–15% annually is considered average across most sectors.
Over 20% may signal a problem, especially if it’s not seasonal or expected.
Under 10% can be a good sign, or a sign of stagnation. Context matters.
Some examples:
Retail & Hospitality: 30%+ is common
Healthcare: Often above 20%
Finance & Tech: Usually aim for under 15%
Nonprofits: Typically land around 18–20%
It’s not just the number, it’s who’s leaving, and why.
Why It Matters
Turnover isn’t just an HR stat, it shows up in your budget, your culture, and your day-to-day work. A high turnover rate means more money spent on hiring and training, slower productivity, and a steady loss of institutional knowledge.
It also hits morale. When good people leave and seats stay empty, the pressure builds on everyone else. If you’re not tracking the numbers, or don’t know how to calculate turnover rate, you might miss the signs until people start burning out. And if you’re consistently losing strong employees or struggling to replace them fast enough, the impact adds up quickly.
How to Respond If Your Rate Is High
If your turnover rate feels too high, don’t panic, but do look deeper.
Run exit interviews and look for patterns
Ask managers what they’re seeing day to day
Check your time-to-fill — long gaps increase burnout
Look at pay, benefits, and workload — are you losing people to avoidable issues?
Talk to your team — not just surveys, actual conversations
The number is just a signal. The real insight comes from what you do with it.
Final Thoughts
Knowing how to calculate turnover rate is a small move with big value. It gives you a clear view of what’s really happening inside your team and helps you act before problems snowball.
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