Calculating-and-Improving-Employee-Turnover Rate-in-2023

Calculating and Improving Employee Turnover Rate in 2024

By Kyla Mintz

Employee turnover is an inevitable part of doing business, but one that can significantly impact your organization’s bottom line. Are you aware of the factors that influence your employees’ decisions to stay or leave? Do you know how to calculate your company’s turnover rates and compare them to industry averages? Join us on a journey to better understand employee turnover, its causes, and effective strategies to reduce it – because keeping your best talent is essential for success.

Key Takeaways

  • Understanding employee turnover and its impact on businesses
  • Measuring turnover rate to identify trends, compare against industry averages, & inform retention strategies
  • Implementing effective retention strategies such as fostering engagement & promoting work-life balance

Understanding employee turnover


Employee turnover refers to the number of employees leaving a company, either voluntarily or involuntarily, and can have significant financial and operational impacts on a business. In essence, employees leave represents the rate at which your organization loses and replaces employees.

A deeper understanding of the two primary types of turnover, voluntary and involuntary, provides more insight into the reasons behind employee departures, and this knowledge aids in the development of improved retention strategies.

Voluntary turnover

Voluntary turnover occurs when employees choose to leave a company for various reasons, such as better job opportunities, higher pay, or dissatisfaction with their current role. The departure of experienced employees can have a significant impact on a business, as their responsibilities must be assigned to another employee, resulting in a redistribution of resources and an additional workload for existing personnel.

For maintaining a stable and experienced workforce, it’s paramount to execute retention strategies specifically targeting voluntary turnover.

Involuntary turnover

In contrast, involuntary turnover happens when employees are terminated or laid off by the company, often due to performance issues, restructuring, or other business-related factors. While it can raise concerns among remaining employees about job stability, involuntary turnover can also reinstate efficiency and productivity for those who were detrimentally impacted by a dismissed employee.

Companies should meticulously oversee controllable involuntary turnover, which occurs when an organization ends an employee’s contract due to inadequate performance or inappropriate behavior, to maintain fairness and consistency.

Measuring employee turnover rate


Calculating employee turnover rates, both monthly and annually, helps businesses in several ways.

  • Identify trends in turnover and understand the reasons behind them
  • Benchmark against industry averages to see how your turnover rates compare
  • Implement strategies to improve employee retention
  • Anticipate potential problems and modify practices to enhance retention

A regular examination of turnover data is essential for businesses to effectively manage their workforce and ensure long-term success.

Let’s take a look at how to calculate these crucial turnover rates.

Monthly employee turnover rate

To calculate the monthly employee turnover rate, simply divide the number of employees who left during a month by the total number of employees. This rate provides valuable insights into the short-term fluctuations in employee departures, allowing you to quickly identify any sudden changes that may require immediate attention.

Annual employee turnover rate

The annual employee turnover rate, on the other hand, is calculated by dividing the total number of employees who left during a year by the average number of employees for that year. This metric is particularly useful in assessing the company’s employee retention and can provide insight into the effectiveness of hiring policies and work culture.

Monitoring both monthly and annual turnover rates enables you to keep abreast of trends and make data-driven decisions for enhancing employee retention.

Industry averages and healthy turnover rates


Every industry has its own unique employee turnover rates, which can vary widely depending on factors such as job level, location, and economic conditions. Comparing your company’s turnover rate to industry averages can help you understand whether it’s high or low, while conducting internal turnover rate research can identify and address specific issues within your organization.

We will scrutinize how to juxtapose turnover rates with industry averages and the significance of conducting internal research.

Comparing your company's turnover rate

Benchmarking your company’s turnover rate against industry averages can provide valuable insights into how well your organization is retaining employees. If your turnover rate is consistently higher than the industry average, it may indicate that issues with management, workplace culture, or compensation need to be addressed.

On the other hand, a lower-than-average turnover rate can signify a stable and experienced workforce, indicating that your retention efforts are successful in achieving low employee turnover and preventing high employee turnover.

Internal turnover rate research

Aside from juxtaposing your company’s turnover rate with industry averages, conducting internal turnover rate research is vital for identifying trends and areas within your organization that need improvement. This involves analyzing employee turnover data, such as:

This analysis helps uncover underlying issues that may be contributing to high turnover rates.

Armed with this information, you can make targeted improvements to address the specific needs of your workforce.

Factors affecting employee turnover

Factors-affecting-employee -turnover

Understanding the factors that influence employee turnover rates is essential in developing effective retention strategies. Workplace culture, management practices, and job satisfaction are all potential influencing factors of employee turnover rates.

We will delve into each of these factors to gain a better understanding of their effect on employee retention.

Workplace culture

Workplace culture plays a significant role in employee retention, with a positive and inclusive environment leading to lower turnover rates. A strong company culture fosters a sense of belonging and can help attract and retain top talent.

Toxic cultures, on the other hand, can result in billions of dollars in avoidable turnover for companies. Investing in the creation of a supportive and inclusive work environment is paramount for retaining top talent.

Return-to-office and hybrid work policies

Organizational strategy, especially as it pertains to hybrid and return-to-office policies, plays a crucial role in influencing employee turnover rates. While the shift to remote work during the pandemic offered employees flexibility and adapted to their changing needs, the transition back to the office or the adoption of hybrid models may not always be smooth. If implemented without careful consideration, these policies can alienate employees who have grown accustomed to the benefits of remote work, such as reduced commuting times and better work-life balance. Furthermore, a one-size-fits-all approach may not cater to individual preferences and needs, leading to feelings of being undervalued or overlooked. Employees who perceive a lack of flexibility or an unwillingness from the organization to accommodate their needs may be more inclined to seek opportunities elsewhere. The resulting turnover not only adds to recruitment and training costs but can also hamper team cohesion and productivity, emphasizing the importance of a thoughtful strategy in shaping workplace policies.

Management practices

Management practices, including communication, feedback, and support, can significantly affect employee satisfaction and turnover rates. Research has revealed that an incredible 82% of employees would be willing to resign from their job because of a bad manager. This suggests that managers can have a profound impact on employee morale.

Recognition and resolution of issues with management practices can significantly enhance employee retention and overall satisfaction.

Job satisfaction

Job satisfaction encompasses factors such as compensation, work-life balance, and career growth opportunities, which can impact an employee’s commitment to a company. If employees are not satisfied with their jobs, they may seek out other opportunities, leading to higher turnover rates.

Addressing issues related to job satisfaction enables companies to cultivate a more engaged and committed workforce, thereby reducing employee turnover rates.

Strategies for reducing employee turnover

Strategies-for -reducing-employee-turnover

Now that we’ve explored the factors affecting employee turnover, let’s discuss some strategies for reducing employee turnover rates.

Implementing strategies such as:

  • Enhancing recruitment and onboarding processes
  • Fostering employee engagement and recognition
  • Encouraging career growth and development
  • Promoting work-life balance
  • Investing tech solutions like virtual office software

Implementing effective strategies for onboarding and supporting new employees can help reduce employee turnover rates and create a more satisfied and committed workforce.

Enhancing recruitment and onboarding processes

Improving recruitment and onboarding processes can help attract and retain top talent, leading to lower turnover rates. This includes:

  • Utilizing social media platforms to locate potential employees
  • Conducting preliminary interviews to identify the most suitable candidates
  • Investing in onboarding new staff to ensure a smooth transition into the company.

Refining these processes allows companies to lay a foundation for enduring employee satisfaction and retention.

Fostering employee engagement and recognition

Fostering employee engagement and recognition can improve job satisfaction and loyalty, reducing the likelihood of employees leaving the company. This can be achieved by implementing strategies and practices such as:

  • Providing professional development opportunities
  • Offering regular feedback and recognition
  • Promoting a positive work culture
  • Encouraging employee participation in decision-making processes

Companies can establish a more motivated and loyal workforce by centering on employee engagement and recognition.

Encouraging career growth and development

Offering career growth and development opportunities can help retain employees by providing them with a clear path for advancement within the company. Investing in training and development programs not only improves job satisfaction, but also reduces turnover rates by creating a more skilled and satisfied workforce.

Companies can foster a more committed and engaged workforce by equipping employees with the necessary resources and support for their professional growth.

Promoting work-life balance

Promoting work-life balance can improve employee satisfaction and reduce turnover rates by addressing the needs of employees both in and outside of work. This involves:

  • Recognizing the importance of work-life balance
  • Seeking enjoyable careers
  • Emphasizing health
  • Taking time away from work

Promoting work-life balance allows companies to cultivate a more contented and loyal workforce, ultimately leading to a reduction in employee turnover rates.

Investing tech solutions like virtual office software

Utilizing virtual office software, with Kumospace recognized as the industry leader, can significantly aid organizations in reducing employee turnover rates. Such software often fosters a sense of connection, collaboration, and flexibility, especially for remote or distributed teams. This can be instrumental in addressing the challenges of working from home without resorting to potentially detrimental return-to-office policies. Virtual office environments can simulate the in-office experience, enabling spontaneous conversations, team meetings, and one-on-one discussions—all essential for team cohesion and camaraderie. By offering features that facilitate seamless communication, these platforms can alleviate the feelings of isolation or disconnection often cited by remote employees. Moreover, virtual office software frequently includes tools that promote work-life balance, such as flexible scheduling. Such features can be especially appealing to employees seeking a harmonious balance between their professional and personal lives. By fostering an inclusive, connected, and adaptable work environment, organizations can address many workforce concerns, thereby enhancing job satisfaction and reducing the risk of turnover.

Monitoring and adjusting turnover rates

Monitoring-and-adjusting -turnover-rates

Regularly analyzing turnover trends and implementing retention strategies can help businesses maintain a healthy employee turnover rate. By staying proactive and continuously monitoring turnover data, companies can make data-driven decisions to improve employee retention and satisfaction.

We will examine how to analyze turnover trends and execute effective retention strategies.

Analyzing turnover trends

Examining employee turnover data over time allows companies to:

This analysis can help companies make informed decisions and implement strategies to reduce turnover and improve employee retention.

Armed with this information, companies can make targeted improvements to address the specific needs of their workforce and reduce employee turnover rates.

Implementing retention strategies


After identifying areas for improvement within your organization, the next step is to implement retention strategies. These may include enhancing workplace culture, providing competitive compensation packages, and offering continuous employee support.

By addressing the specific needs of your workforce and continuously monitoring the effectiveness of these strategies, you can ensure a more satisfied and committed workforce, ultimately reducing employee turnover rates.


In conclusion, understanding and addressing employee turnover is essential for any organization’s success. By calculating turnover rates, comparing them to industry averages, and conducting internal research, you can identify trends and areas for improvement. Implementing strategies such as enhancing recruitment and onboarding processes, fostering employee engagement and recognition, encouraging career growth and development, and promoting work-life balance can help reduce employee turnover rates and create a more satisfied and committed workforce. Don’t let your best talent slip away – invest in your employees and watch your organization thrive.

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Headshot for Kyla Mintz
Kyla Mintz

Kyla is part of the Marketing team at Kumospace, where she helps run the social media accounts and creates content. Kyla has many different passions outside of work, including volleyball, traveling, and restaurant dining.

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