What Is Employee Turnover? Types And Causes

Globally, a lot of businesses are concerned about employee turnover. Business management has long given research on employee retention tactics a lot of consideration. 

Given the current context of intense global rivalry, employee turnover is a significant problem for businesses.

According to recent studies, the turnover problem often causes challenges for organizations. Decreased productivity and financial performance would be the result. 

Conversely, skilled workers are more likely to leave if there is a high employee turnover rate.

Businesses make a lot of effort to retain competent individuals because of their significance to a company’s production and profitability.

The high staff turnover rate has always been challenging to run an organization.

What is Employee Turnover? 

Employee turnover is influenced by the pressure to find candidates for open positions as quickly as feasible. 

Regular company operations may need to be improved by high personnel turnover. Thus, the idea of Turnover is essential to human resources. To deal with this issue, a related concept is called the turnover rate. 

 The turnover rate provides information on how many employees left the company within a particular period. As a percentage, that is the most typical way to say it.

This information can be used to assess whether the company’s turnover rate is regular or excessive. 

You may calculate your company’s turnover rate to find out how much Turnover there is in your company. Understand that any firm has some degree of Turnover; this is crucial.

However, the turnover rate may differ significantly from one field to another.

Types of Employee Turnover

Voluntary Turnover

Such Turnover is a result of voluntary staff departures. They may focus on other facets, such as caregiving, travel, or beginning a new career. This sort of Turnover is regrettable most of the time. 

 Because voluntary terminations typically do not involve performance difficulties, they are more expensive and have a higher effect on the company. 

Having less voluntary Turnover is a common objective for HR executives. Still, stopping is quite challenging. No one stays at a company permanently, whether they choose to or not.

Involuntary Turnover

Involuntary Turnover occurs when an employee quits their job without their permission. Problems with performance are the leading cause of this regular occurrence.

 It’s possible that the person isn’t producing any significant outcomes, a problem with their performance or behavior, or possibly with both. 

Involuntary Turnover, however, is not always a sign of stupidity; it may simply indicate that the worker was not a good fit for the job. Although having fewer unplanned departures is generally a positive thing, leaving a position that wasn’t working out is pretty OK.

Regrettable Turnover 

Despite what the name might suggest, this particular changeover is the hardest. A regrettable turnover causes a valuable, high-performing employee to leave who the company would have preferred to keep. 

Employees are what make every organization strong. Keeping exceptional employees on staff and minimizing unpleasant Turnover should therefore be HR leaders’ top priority.

Internal Transfers

When an individual gets promoted internally, they are given new duties inside the same company.

 A high staff turnover rate could be an indication of development. However, additional factors can be at play if an employee changes teams. Exit interviews can give a more precise picture of the factors influencing a worker’s transfer. 

They might have been excited about a new job or a chance to progress. They may be departing due to poor leadership, a lack of confidence in their coworkers, or a lack of career progression opportunities.

Using this survey data, you can learn what generally works and how specific teams might develop. 

Voluntary Turnover vs. Involuntary Turnover 

A worker quitting their employment voluntarily is known as voluntary Turnover. Disengagement, workplace strife, and better career chances elsewhere are just a few factors that might impact this. 

It’s crucial to remember that when analyzing Turnover inside a specific team or department, it should only apply to the group you are evaluating and not necessarily to those who leave the organization as a whole.

It is known as an involuntary turnover when a worker’s employer fires them or permanently removes them from the group in question—possibly due to subpar work, toxic behavior, or other reasons.

Every organization experiences Turnover. Although most organizations aim for low employee turnover, what happens more often than not reflects a typical or expected rate, which can vary depending on the industry, kind of employment, firm size, location, and other factors—and that number is very rarely zero. 

This comparison establishes if Turnover is high or low. The analysis of organizational Turnover by an insurance firm, for instance, shouldn’t be based on the anticipated turnover rate of a fast-food restaurant; rather, the opposite should be true.

Five Negative Implications Of Significant Employees Turnover

Obstacles to the job flow

A high turnover rate has several negative effects, including lower-than-average workplace productivity. The burden is put on the current personnel when a corporation fires many workers each year. 

As a result, the workflow can be noticeably disrupted as the company adjusts to the new adjustments. Even if you swiftly locate replacements, it will still take some time for them to become used to their new positions.

A lack of community spirit

The work environment will worsen if existing employees are overworked due to the increased burden. 

Because of a high staff turnover rate, current employees may worry more about their job security and temporarily have more work to complete. 

Anxiety at work increases with low workplace morale, which also lowers overall productivity. Surveys show that one in four workers will quit their jobs due to mental stress.

Therefore, there can be more resignations if there is a high staff turnover rate.

The emergence of a negative work reputation

Before applying for a new job, workers investigate. One of the key problems some workers attempt to avoid at work is high staff turnover rates. 

According to the ADP poll, only one in five workers prioritize job security while exploring new opportunities because they are happy in their current employment. 

According to studies, job security has a significant impact on employee engagement. People concerned about their job security report a 36% decline in engagement.

Money lost

For several reasons, any business that frequently loses staff runs a larger chance of suffering financial setbacks than one that keeps its workers. 

The corporation may have to spend extra money on hiring new employees to replace the departing workforce.

Because they lack expertise, the new staff might potentially cause a decline in the percentage of repeat customers and client satisfaction ratings.

Placing their highly qualified employees in danger

Mass layoffs considerably increase the likelihood that the organization will lose irreplaceable and highly qualified personnel, even when some professions suffer employee turnover rates that are comparably greater or lower than average. 

 Voluntary Turnover is an alternative to forced replacement. It has been suggested that a high turnover rate may be enough to persuade some employees to resign or look for alternative employment opportunities.

Finding Problems With the Employee Turnover Rate

As we’ve already discussed, high employee turnover rates can cause various problems for an organization or firm.

 The good news is that these problems are solvable through recognition and action. Because high staff turnover rates can be an extremely expensive issue, you should make sure to identify problems early. Go now by following these easy directions:

Step 1. Calculate your monthly turnover rates to get started.

A few of the factors that can affect turnover rates are the industry, the time of year, and general economic conditions. 

You must compute and monitor your workforce turnover rate regularly to spot problems. To gauge the performance of your business, compare its average to the average for your industry sector or its intended audience.

How are employee turnover statistics determined?

The total number of departing employees must be divided by the average number of employees, and the result must then be multiplied by 100 to determine the staff turnover rate. The average employee count can be calculated by dividing the beginning and ending staff numbers for a given time period by two.

How many turnovers should there be each year?

Staff attrition is inevitable since companies rarely see zero employee turnover. Additionally, turnover rates are sometimes not a problem until they reach an unacceptable level, especially if it proves challenging to fill empty jobs by prompt departing employees. The average annual turnover rate varies by industry and can be as low as 10%, but it is typically lower.

Step 2. Interview departing employees 

The greatest way to understand the rationale behind a decision is to inquire about the departing employee. If you want to learn more about issues from the employee’s perspective or get suggestions for change, make sure your inquiries are well-planned. 

Being open-minded will give you the best opportunity to hear direct feedback because it’s crucial to remember that departing employees may be doing so for various reasons.

Step 3. Employer surveys of employees

Customary employee polls, like engagement or satisfaction polls, ask about the workplace, work-life balance, and career advancement. Design a more in-depth survey to look into a problem after spotting it in a larger one and explore potential remedies. 

The effectiveness of current projects can be evaluated through surveys. Adding a few questions to semi-annual or quarterly surveys will let you track the outcome over time. You can also ask for anonymous comments to encourage staff to be more sincere and forthcoming.

Step 4. Alter the phrase

All that’s left to do is self-reflect, add your own vision, and try to put solutions in place to raise retention rates in your business now that you have a broader view of turnover rates. 

You may use many strategies to lower staff turnover rates if you’re wondering how to do it. These are the top five retention suggestions:

  • Be certain that staff are paid well.
  • Keep a clean and safe workplace.
  • Respect the work of the employee.
  • Have excellent management, please.
  • Present chances for professional advancement 

Leading Causes Of Employee Turnover

Offers for increased salaries

Nobody is good or bad; everyone has different reasons for doing things. Even though some of your employees have been with the firm for a long time and may believe in it, they may consider leaving if better opportunities are presented. 

To help them comprehend their compensation, give each employee a printed statement at the end of the year that details their pay cost and any other charges the company owes them.

Ineffectively managing the workforce.

Workers frequently leave their jobs freely, leading to negative relationships. Although it’s possible that this won’t always be the case, the cause typically begins here. 

If the relationships they have at work are typically positive, employees will be more driven to perform well, maintain their focus on the task at hand, and stay engaged. 

 By strengthening human management, you can lower the rate of employee turnover. Find the right laws and regulations to benefit both the organization and the person.

Applying best practices throughout the system is crucial if you want your organization to prosper. The loyalty of employees is essential to businesses.

On the part of the personnel, a lack of interest

Low employee engagement is one of the biggest problems that businesses face. Employee disengagement at work regularly causes workers to leave their jobs.

Your plan should focus on what is best for the organization and whether it fits the business culture. 

Organizations can improve engagement activities in a variety of ways.

Both keeping the organization’s leadership committed and ensuring that your managers have received the proper crisis management training are crucial.


Several indications highlight how difficult it is for businesses of all kinds and market segments to manage their human resources in the current, intensely competitive labor market; when several factors contribute to discontent, employee turnover increases. 

Some steps can be used to lower Turnover and enhance other operational outcomes.

It is crucial better to understand the costs and effects of high employee turnover and be more willing to change long-standing people management practices. 

Employees are a crucial source of influence and motivation for businesses in a competitive economy, and their performance is essentially what makes a company successful.


What is employee turnover?

Employee turnover refers to the number or percentage of employees who leave a company within a given time frame.

What are the types of employee turnover?

There are two types of employee turnover: voluntary and involuntary. Voluntary turnover occurs when employees choose to leave the company, while involuntary turnover occurs when employees are terminated or laid off by the company.

What are the causes of employee turnover?

There are many causes of employee turnover, including poor management and leadership, limited opportunities for growth and advancement, inadequate compensation and benefits, unhealthy work environment, incompatibility with a job or company culture, lack of work-life balance, personal reasons, lack of training and development opportunities, poor communication and feedback, and no recognition and appreciation.

How does employee turnover affect a company?

High employee turnover can be costly for a company in terms of time, money, and productivity.

It can also lead to a loss of institutional knowledge and experience, reduced morale among remaining employees, and difficulty in finding and retaining qualified replacements.

How can a company reduce employee turnover?

A company can reduce employee turnover by improving management practices, providing opportunities for career growth and development, offering competitive compensation and benefits, fostering a positive and inclusive work environment, promoting work-life balance, providing training and development opportunities, improving communication and feedback, and recognizing and appreciating employee contributions.

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