What is Turnover Rate?
Employee turnover rate is a key HR metric that tells you what percentage of staff members left your company over a given period of time. It is typically calculated on a monthly or yearly basis, but you can use whatever frequency fits your needs.
When calculating turnover rate, you generally do not count inter-company movement such as promotions or transfers. The metric concerns employees who leave the company for good — those who resign, retire, or are laid off. Employees on long-term but temporary leave (maternity leave, sabbaticals) are also excluded.
How to Use the Turnover Rate Calculator
- Enter the period label (optional) — for example, "Year 2024" or "Q1 2025".
- Enter the number of employees who left during that period.
- Choose how to provide the average employee count:
- Check "I already know the average number of employees" and enter it directly, or
- Enter the headcount at the beginning and end of the period — the calculator will compute the average for you.
- Click Calculate — the turnover rate and an industry assessment appear instantly.
Turnover Rate Formula
The employee turnover rate formula is straightforward:
Turnover Rate = (Employees Who Left ÷ Average Number of Employees) × 100%
If you need to calculate the average number of employees at the same time:
Average Employees = (Employees at Start + Employees at End) ÷ 2
Turnover Rate = [Employees Left ÷ ((Employees at Start + Employees at End) ÷ 2)] × 100%
Example Calculation
Over the last year, 9 people left a company that had 100 employees at the start and 82 at the end:
- Average employees = (100 + 82) ÷ 2 = 91
- Turnover rate = (9 ÷ 91) × 100% = 9.89%
What Does the Turnover Rate Tell You?
In the simplest terms — high turnover means employees are leaving in groups, which is expensive and disruptive. The employee turnover rate allows companies to assess team health and act when something starts going wrong.
There is no universal "bad" threshold — values vary from industry to industry. According to LinkedIn's analysis, typical turnover rates by sector are:
| Sector | Turnover Rate |
|---|---|
| Tech (software) | 13.2% |
| Retail | 13.0% |
| Media & Entertainment | 11.4% |
| Government / Education / Non-profit | 11.2% |
| Financial services & insurance | 10.8% |
| Healthcare & pharmaceutical | 9.4% |
What is a Good Turnover Rate?
A turnover rate of around 10% or less is generally considered good. This indicates that employees tend to stay with the company, suggesting a positive work environment and strong employee satisfaction.
A 15% turnover rate is not necessarily bad — it depends on the industry. In retail or hospitality, 15% may be average or even low. In finance or technology, it could be considered high.
Why Turnover Rate Matters for Your Business
- Cost control — replacing an employee typically costs 50–200% of their annual salary.
- Productivity — high turnover disrupts teams and slows output.
- Culture signal — rising turnover often reveals problems with management, compensation, or company culture before they become critical.
- HR strategy — tracking turnover over time helps measure the impact of HR initiatives.
Frequently Asked Questions
How do I calculate turnover rate?
- Count how many employees left during a specific period (e.g. 40).
- Calculate the average headcount: (start + end) ÷ 2. For example, (120 + 80) ÷ 2 = 100.
- Divide and multiply: 40 ÷ 100 × 100 = 40%.
What is a good turnover rate?
Generally, 10% or less per year is considered a good turnover rate. It indicates stable staffing and a satisfying workplace.
Is a 15% turnover rate bad?
Not necessarily. A 15% turnover rate falls within the normal range for many industries such as retail, hospitality, or tech. In lower-turnover sectors like finance or healthcare, 15% would be above average and worth investigating.
Does turnover rate include internal transfers?
No. Standard employee turnover rate only counts staff who leave the company entirely — resignations, retirements, and layoffs. Promotions, lateral moves, and temporary leaves are excluded.