Should I use average headcount or starting headcount for turnover?

Most HR and analytics teams use average headcount because it better reflects changes in staffing during the period. Using only starting headcount can distort the rate if you are growing or shrinking quickly. A simple average is (Start headcount + End headcount) ÷ 2; more advanced approaches use monthly or even daily averages.

What is the difference between voluntary and involuntary turnover?

Voluntary turnover happens when employees choose to leave (resignations, retirements). Involuntary turnover happens when the company initiates the separation (layoffs, dismissals). Many organizations track these separately because high voluntary turnover is often a stronger signal of engagement, culture, or pay issues.

How can I reduce employee turnover?

To reduce employee turnover, focus on root causes: hire for fit, provide competitive and transparent pay, invest in onboarding and development, train managers, improve internal communication, and regularly review engagement and exit feedback. Use segmented turnover metrics (by manager, role, tenure, location) to target the highest-impact areas.

Employee Turnover Rate Calculator

Q: How do you calculate employee turnover rate?

Employee turnover rate is typically calculated as: Turnover rate = (Number of separations during period ÷ Average number of employees during period) × 100. Average employees is usually (Employees at start + Employees at end) ÷ 2. You can calculate this monthly, quarterly, or annually.

Q: What is a good employee turnover rate?

There is no single good turnover rate for every organization. Many benchmarks show overall annual turnover between 10–20% for stable organizations, but it can be much higher in retail, hospitality, and call centers. The most important comparison is against your own historical trend and against peers in your industry and region.

Quickly calculate monthly and annual employee turnover, retention rate, and voluntary vs. involuntary turnover for your organization.

Turnover & Retention Calculator

Time period

Employees at start of period

Employees at end of period

Total separations during period

Include all employees who left (resignations, retirements, dismissals, layoffs) unless you are tracking a specific type.

Results

Turnover rate (for selected period)

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Retention rate (for selected period)

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Retention = 100% − turnover rate.

Annualized turnover estimate

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This extrapolates your current period’s turnover to a 12‑month equivalent. Use it as an indicator, not a forecast.

What is employee turnover rate?

Employee turnover rate measures how quickly people leave your organization over a given period. It is one of the most important HR KPIs because it affects productivity, culture, and cost.

Most HR teams track turnover monthly and annually, and often break it down by department, manager, location, tenure, and reason for leaving.

Employee turnover rate formula

Basic turnover rate

Turnover rate (%) = (Number of separations during period ÷ Average number of employees) × 100

Average headcount

Average employees = (Employees at start of period + Employees at end of period) ÷ 2

This is the same logic used by leading HR references and analytics providers: use average headcount in the denominator so the rate is not distorted by growth or downsizing.

Voluntary vs. involuntary turnover

In the advanced mode of the calculator, we separate:

Voluntary turnover – employees choose to leave (resignations, retirements).
Involuntary turnover – the company initiates the separation (layoffs, dismissals).

Voluntary turnover rate

Voluntary turnover (%) = Voluntary separations ÷ Average employees × 100

Involuntary turnover rate

Involuntary turnover (%) = Involuntary separations ÷ Average employees × 100

Retention rate formula

Retention is simply the complement of turnover for the same period:

Retention rate (%) = 100% − Turnover rate (%)

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

Choose the time period. Most organizations use calendar month, quarter, or year.
Count employees at the start and end. Use HRIS data for headcount on the first and last day of the period.
Compute average headcount. Add start and end headcount and divide by 2.
Count separations. Count how many employees left during the period. Decide whether you include all separations or only voluntary ones.
Apply the formula. Divide separations by average headcount and multiply by 100 to get a percentage.

Interpreting your turnover rate

There is no universal “good” turnover rate. Benchmarks from surveys and labor statistics show that:

Stable professional and technical roles often see annual turnover in the 10–20% range.
Retail, hospitality, and call centers can see 40–80%+ annual turnover.
Early‑stage startups or restructuring organizations may have higher rates for a period of time.

The most useful comparisons are:

Your own trend over time (is turnover rising or falling?).
Differences between departments, locations, or managers.
Turnover by tenure band (e.g., < 1 year vs. 1–3 years vs. 3+ years).

Common pitfalls

Using headcount at one point in time instead of average headcount.
Mixing voluntary and involuntary turnover when you really want to understand resignations.
Comparing different period lengths (e.g., monthly vs. annual) without annualizing.
Ignoring small sample sizes – in small teams, one resignation can produce a very high rate.

Strategies to reduce employee turnover

Once you know your numbers, focus on the root causes behind them. Evidence‑based strategies include:

Improve hiring quality and job fit – clear role expectations, realistic job previews, structured interviews.
Strengthen onboarding – first‑90‑day plans, buddy programs, manager check‑ins.
Invest in managers – manager training, feedback skills, coaching, workload management.
Review pay and benefits – benchmark against market, ensure internal equity and transparency.
Offer growth and development – career paths, learning budgets, internal mobility.
Listen and act – engagement surveys, stay interviews, and exit interview themes translated into action plans.

Employee turnover rate FAQ

How do you calculate employee turnover rate?

Use this formula: Turnover rate = (Number of separations ÷ Average number of employees) × 100. Average employees is usually (Employees at start + Employees at end) ÷ 2. You can calculate this for any period (month, quarter, year) as long as you are consistent.

What is a good employee turnover rate?

It depends on your industry, geography, and business model. Many stable organizations target annual turnover around 10–20%, but labor‑intensive sectors like retail or hospitality may see much higher rates. Focus on improving your own trend and understanding hotspots rather than chasing a single benchmark.

Should I include internal transfers in turnover?

Most organizations exclude internal transfers from turnover because the employee is still with the company. However, you may track internal mobility as a separate metric. The key is to define your rules clearly and apply them consistently.

How often should HR report turnover?

Monthly reporting is common for HR dashboards, with a deeper quarterly or annual review by leadership. For critical teams or high‑growth companies, weekly or rolling 12‑month views can be useful to spot issues early.

What data do I need to calculate turnover accurately?

At minimum you need: headcount at the start and end of the period, and a list of all separations with dates. For richer analysis, capture reason for leaving, manager, department, location, tenure, and performance rating.