High Employee turnover isn't just a business problem; it's a symptom of a deeper issue. When employees feel disconnected, undervalued, or see no future with your organization, they leave. Whether it’s voluntary turnover, where workers choose to leave, or involuntary turnover resulting from poor performance or restructuring, the consequences can be severe.
High turnover not only disrupts teams but also leads to lost productivity, hidden costs, and decreased employee morale among remaining employees.
Employee turnover rate in the United States for 2025 is approximately 13.5% for voluntary turnover.
Understanding the causes of employee turnover and implementing strategies to keep employees engaged is crucial for retaining talent, fostering a strong company culture, and achieving long-term cost savings. This guide explores what turnover means, how to calculate it, why it matters, its most common causes, and proven ways to reduce it.
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In simple terms, employee turnover refers to the rate at which employees leave a company within a given time period, typically measured annually. This includes both:
A certain level of turnover is normal and even healthy. For example, new hires who are a poor fit leaving early can help ensure stronger team alignment in the long run. This is sometimes called a good employee turnover rate. However, high employee turnover is usually a red flag, signaling deeper problems such as poor management, lack of development opportunities, or a toxic company culture.
Calculating the employee turnover rate is straightforward. Most organizations use this formula:
Turnover Rate (%) = (Number of Employees Who Left ÷ Average Number of Employees) × 100
Example:
This number helps HR teams benchmark against industry labor statistics, track trends, and run a labor turnover survey to identify risks. A high turnover rate compared to industry averages can indicate issues with hiring processes, job satisfaction, or employee experience.
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The impact of high employee turnover goes far beyond empty desks. It affects nearly every aspect of business performance:
Recruiting qualified candidates requires time, money, and effort. Job postings, interviews, and background checks all add up quickly.
And even after hiring, new employees need training—often taking months before reaching full productivity. For example, a sales representative may take six months before closing deals at the same pace as their predecessor.
Meanwhile, lost productivity piles up as remaining employees shoulder extra responsibilities. Teams often find themselves stretched thin, leading to delayed projects or reduced service quality.
When employees watch co-workers leave one after another, motivation decreases. They start questioning whether staying is worth it.
Those who remain often face burnout from repetitive tasks or picking up the slack. For instance, if two customer service agents resign, the remaining team may have to handle double the calls—causing stress and frustration.
High turnover can erode company culture. When departures become the norm, trust and stability weaken.
This often creates a cycle: engaged employees decline, which leads to more avoidable turnover. Over time, the workplace may feel less like a team and more like a revolving door.
Your company’s reputation is also at risk. High turnover makes job seekers wary—no one wants to join a company where employees don’t stay.
Negative reviews on platforms like Glassdoor or Indeed can discourage top-skilled workers from applying. For example, a candidate might skip an interview after reading several reviews that mention poor retention and lack of support.
The losses don’t stop with salaries. Health insurance, retirement plans, and benefits packages represent significant investments. When employees leave prematurely, those investments go to waste.
Additionally, constant rehiring disrupts talent management strategies. Long-term goals like succession planning or leadership development take a back seat as HR teams scramble to fill positions.
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Why do employees leave? The following are the 10 most common causes of employee turnover, supported by research and real-world examples:
Employees often cite poor compensation and lack of a comprehensive benefits package—such as health insurance or retirement plans—as a top reason for leaving.
For example, if a competitor offers a higher salary plus health coverage, employees are likely to switch jobs. Pay and benefits remain a powerful motivator.
Without career advancement opportunities or a clear growth path, employees feel stuck.
Companies that neglect professional development risk losing top talent. For instance, ambitious employees who want leadership roles may leave for organizations that provide training and promotions.
Bad managers are consistently ranked as the number one reason employees leave.
A lack of feedback, recognition, or empathy from managers quickly causes disengagement. For example, a manager who only criticizes without coaching often drives employees to seek healthier work relationships elsewhere.
Poor company culture, office politics, and lack of inclusivity can push employees away.
A toxic environment drains morale, making people feel undervalued. Over time, this leads to disengaged employees and a reputation that repels new hires.
Without a healthy work-life balance or flexible schedules, burnout becomes inevitable.
Overworked employees eventually start seeking opportunities that allow them to manage both personal and professional responsibilities. Remote work and hybrid models are increasingly popular because they offer balance.
A lack of recognition leaves employees feeling undervalued.
Something as simple as a “thank you” or a structured recognition program can improve retention. Without it, staff may assume their contributions don’t matter and look for appreciation elsewhere.
Sometimes the problem begins before employment even starts. Hiring the wrong candidates can lead to mismatched expectations, poor performance, and early exits.
For example, if a company hires someone without the right skills for the role, frustration builds on both sides, leading to turnover within months.
When work feels monotonous, productivity and job satisfaction decline.
Employees want challenges and variety in their roles. Without engagement, even talented workers may leave to pursue jobs that keep them motivated.
Not all turnover is within a company’s control. Economic downturns, new job openings, or competitive offers can lure employees away.
For instance, during a boom in tech jobs, many professionals from traditional industries switch careers to take advantage of higher pay and perks.
Beyond day-to-day development, employees crave long-term career growth and advancement.
Companies that fail to provide clear progression paths—like leadership pipelines or mentorship programs—often see staff turnover rise as employees seek growth elsewhere.
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Organizations can minimize turnover and strengthen retention by adopting strategic approaches. When employees feel valued, supported, and recognized, they are far more likely to stay. Here are some of the most effective methods:
Money isn’t everything, but it matters. Benchmark salaries against industry labor statistics to ensure fairness and competitiveness.
Providing strong benefits packages—including health insurance, retirement plans, and flexible schedules—shows employees that the company values their long-term well-being. For example, tech companies offering wellness stipends and remote work flexibility often see higher retention rates.
Employees don’t just want jobs—they want careers. Offer professional development programs, career growth tracks, and learning opportunities to keep staff motivated.
Encourage both new hires and experienced workers to pursue training, whether through mentorship programs, online certifications, or internal workshops. This creates a culture of growth that reduces turnover.
Bad managers drive good employees away. To prevent this, train leaders to avoid becoming bad managers by focusing on empathy, coaching, and communication.
For example, a manager who conducts regular one-on-one check-ins builds trust and prevents issues from escalating into resignations.
Engaged employees are less likely to leave compared to disengaged ones. Keep staff motivated through recognition programs, team-building activities, and meaningful work assignments.
For instance, companies that celebrate milestones—like project completions or anniversaries—foster a stronger sense of belonging.
A healthy workplace culture is one of the best defenses against turnover. Build a culture of trust, transparency, and respect where employees feel heard.
Address conflicts early and ensure inclusivity to reduce avoidable turnover. When employees believe in the company’s values, they’re more likely to stay.
Recognition doesn’t have to be expensive—it just has to be consistent. Implement structured recognition programs and make it a habit to acknowledge both small wins and big achievements.
A simple “thank you” from leadership or a shout-out during meetings can go a long way in improving employee morale.
Burnout is a major cause of turnover. Prevent it by offering flexible schedules, remote work options, and wellness programs.
For example, introducing mental health days or flexible hours helps employees manage stress and improves job satisfaction. A strong employee experience is a proven driver of retention.
Turnover often starts with a poor fit. Attract the right candidates by focusing on cultural alignment and providing realistic job previews during interviews.
Once hired, invest in proper onboarding to ensure new employees feel welcomed, prepared, and motivated to succeed.
Employees want to know where they can go within the company. Map out clear career advancement opportunities to retain ambitious staff.
For instance, showing junior staff how they can progress into management roles provides motivation to stay and grow within the organization.
Data is a powerful tool in preventing turnover. Use talent management systems to predict risks, monitor engagement, and identify employees who may be dissatisfied.
Regular labor turnover surveys and feedback sessions can highlight red flags early, allowing companies to act before valuable employees walk out the door.
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At Highrise, we understand that employee engagement is the foundation of employee retention. By creating a workplace where team members feel valued, supported, and motivated, organizations can turn disengaged employees into engaged employees who thrive.
Highrise coaching will enable you how to enhanc ejob satisfaction, foster career growth, and help businesses retain talent in competitive markets. Our approach addresses everything from hiring processes and talent management to recognition programs and employee well-being.
If you’re ready to transform your employee experience, reduce staff turnover, and unlock long-term cost savings, let Highrise guide you. Together, we can build stronger, more resilient organizations where employees don’t just work, they grow and succeed.
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