Are employees quitting voluntarily or being fired?

How much does this turnover cost employees? All in all important questions. The answers affect all of us.

Let’s find out what the stats have to say: 

Employee Turnover Statistics (Editor’s Pick)

  • Retail and Wholesale is the industry with the highest average voluntary turnover rate.
  • The total separation rate in the USA in 2019 was 45%.
  • Voluntary turnover costs exceed $600 billion.
  • Between 60 to 70% of all employee turnover is voluntary.
  • 63% of CFOs have reported an increased turnover rate these past 3 years. 
  • The turnover rate of the fast-food industry is 150%.
  • 81% of business owners agree that turnover is a costly problem. 

Now, before we move on with the latest employee turnover statistics, let’s cover some of the basics regarding this topic. 

What Is Employee Turnover? 

We will start with a turnover definition. So, employee turnover is the rate or the percentage of employees that have left the company and were replaced with new employees.

There are two types of turnover:

  • Voluntary and
  • Involuntary (termination, retirement, death).

If an employee decides to leave the company because they got a better job offer, then that would be a case of voluntary turnover. The opposite would be when an employee is fired, laid off, has to retire, etc. Then, there is also internal and external turnover. Internal turnover occurs when an employee leaves their position for a different position in the same company, as is the case when an employee is promoted. 

How to Calculate Employee Turnover Rate

You can calculate the rate by dividing the number of employees who left the company by the average number of employees. Then, you multiply that number by 100 to get a percentage. Employee Turnover Rate Formula:

And now that we have covered the basics, let’s move on with the latest statistics: 

Employee Turnover Rate Statistics

1. The turnover rate in the USA is 22% on average. 

The 2019 North America Mercer Turnover Survey includes data of around 200 organizations based in the USA.It has found that the average rate is 22%, out of which:

  • Voluntary turnover accounts for 15%,
  • Involuntary turnover accounts for 6% and
  • Retirements account for 1%. 

2. Retail and Wholesale is the industry with the highest average voluntary turnover rate. 

The same report includes retail employee turnover rates 2018. According to their data, this is the industry with the highest voluntary turnover rate. What’s more, it is also the industry with the highest overall turnover rate. Below you can find the turnover rates from the 2018 Mercer US Turnover Survey, which includes data about voluntary, involuntary and retirement separations in 2017.Average Employee Turnover Rate by Industry

  • Retail & Wholesale - 60.5%
  • Other Manufacturing - 26.7%
  • Consumer Goods - 21.5%
  • High-Tech - 20.9%
  • Transportation Equipment - 20.4%
  • Services (Nonfinancial) - 17.4%
  • Logistics - 16.8%
  • Other Nonmanufacturing - 16.3%
  • Banking/Financial Services - 16.0%
  • Insurance/Reinsurance - 15.5%
  • Life Sciences - 14.5%
  • Chemicals - 12.6%
  • Energy - 11.8%

3. Contact Centre and Customer Service are the job functions with the highest average voluntary turnover rate.

These 2019 turnover rates regarding customer service employees come as no surprise.

The job functions with a high rate are:

  • Contact Centre/Customer service - 17%
  • Manufacturing and operations - 15% and
  • Sales - 14%

4. A better job opportunity is the main reason for voluntary turnover. 

The same Mercer report gives us insight into the main reasons why employees leave their jobs voluntarily. The main causes of employee turnover are: 

  • A better job opportunity - 81%
  • Personal/family - 62%
  • Relocation - 41%
  • Better base salary - 39% 
  • Career change - 29% 

Out of the employees leaving their job voluntarily, 44% were Gen Xers and millennials. 

5. 27% of employees left their jobs voluntarily in 2018. 

To get a better idea of the turnover rate in the USA, we gathered data from multiple employee turnover statistics. According to the 2019 Retention Report done by the Work Institute, 27% of employees left their jobs voluntarily. This represents a 88% increase when compared to 2010!

6. The total separation rate in the USA in 2019 was 45%.

The Bureau of Labor does a report on Job Openings and Labor Turnover on a monthly basis. This report includes data about the number of employees that have quit, been laid off, discharged etc. Annual separation rate in the USA: 

  • 2019 - 45%
  • 2018 - 44.5%
  • 2017 - 43.3%
  • 2016 - 42.6%
  • 2015 - 42.3%

7. Voluntary turnover costs exceed $600 billion.

Gallup estimates that the cost of replacing an employee can range from a half to two times the annual salary of that employee. If we take $50,000 as the average annual salary, the cost of staff turnover for a company with 100 employees can range from $600,000 to $2.6 million per year.

Work Institute on the other hand, has different estimates. According to this source, each employee that is lost costs the company $15,000. US employers have lost $617 billion in 2018 due to voluntary turnover. 

8. 76.8% of employment turnover is preventable. 

As stated in the 2019 Retention Report, almost 77% of the reasons why employees are leaving are preventable. More Preventable:

  • Career development - 22.2%
  • Work-life balance - 12%
  • Manager behavior - 11.3%
  • Compensation & benefits - 9.6%
  • Well-being - 8.4%
  • Job characteristics - 8.1%
  • Work environment - 5.2%

Less Preventable:

  • Relocation - 10.2%
  • Involuntary - 6.7%
  • Retirement - 6.3%

To find out more about how satisfied or unsatisfied employees are with their job, check out these job satisfaction statistics.

9. 38.6% of all employees that quit, did so in their first year of employment. 

More than a third of the staff turnover rate is due to employees quitting within the first year. And more than half of them quit in the first 180 days.

10. Between 60 to 70% of all employee turnover is voluntary. 

Now, that is a high turnover rate if we consider the fact that if companies tried, they could have probably retained some of these employees. According to the ADP Research Institute, the accommodation and food services have the highest voluntary turnover - 72%. This research institute has found that the lowest turnover rate in the administrative, support, waste management, and remediation services. 

11. There are more than 40 factors contributing to voluntary turnover. 

We already mentioned that the Mercer report found that a better job opportunity is the main cause for voluntary job turnover. Well, the ADP Research Institute confirms this. Among these 40 different factors causing employees to look for another job, pay and promotion are the leading causes. Other important factors are overtime, premium time and commute time. So, if companies want to keep their valuable employees, perhaps they should consider offering them a better remuneration package, before their competitor does! 

12. Leisure and hospitality have the highest average monthly turnover. 

The following are the industries with the highest average turnover rate on a monthly basis:

  • Leisure and hospitality - 9.1%
  • Construction - 6.2%
  • Education and health - 5.5%

And on the opposite end we have the industries with the lowest average monthly turnover rates:

  • Manufacturing - 3.4%
  • Finance - 3.8%
  • Information - 4.1%

13. September has the highest turnover rate. 

The ADP Research Institute has found that the month of September has a high turnover whereas the turnover rate is lowest in March. This of course largely depends on the industry. The education industry has the highest turnover in July, when the academic year ends. 

14. 63% of CFOs have reported an increased turnover rate these past 3 years. 

Is employee turnover good or bad?

Should you be worried if the company you manage or work at has a high turnover? The thing is, employee turnover is not always a bad thing. It is sometimes an opportunity for companies to replace employees that are no longer engaged or happy with their work, with employees that would be more productive. The best way to find out the reason why your employees are leaving their position is to have the Human Resources Department conduct an exit interview.

At that stage, it is too late to retain your leaving employee, but at least this will give you some insight on how to prevent your valuable and talented employees from quitting their jobs. However, if the number of employees who left the company is too high, then you are losing money, time and resources in training new employees. Recent cost of employee turnover statistics show that there are various other aspects in which companies are losing. These are some of the most costliest aspects of losing a lot of employees: 

  • Lost productivity - 29%
  • New hire training - 26% 
  • Recruiting - 25%

15. 32% of job seekers have left a job within 3 months due to the company culture. 

According to the 2018 Job Seeker Nation Study, approximately 30% of job seekers have left a job they had started within 90 days. Here are the reasons why:

  • They weren’t expecting the day-to-day responsibilities - 43%
  • An incident or bad experience changed their mind - 34%
  • Company culture - 32%
  • Changed their mind after signing - 11%

So companies seeking to increase their employment retention rates, should probably work on their culture and work environment, as well as provide a realistic job preview. 

16. The average annual worldwide employee turnover rate is 10.9%. 

According to a Linkedin analysis in 2017, the percentage of LinkedIn members that left their jobs was 10.9%.

They also reported that the sectors with the highest turnover rates were:

  • Technology
  • Retail & Consumer Products
  • Media & Entertainment
  • Professional Services 
  • Government/Edu/Non-profit 
  • Financial Services and Insurance 
  • Telecommunications
  • Oil & Energy
  • Aero/Auto/Transport
  • Healthcare & Pharmaceutical 

17. The turnover rate of the fast-food industry is 150%.

The fast-food chain average employee turnover rate is estimated to be between 130% to 150%. This is way above the national average. In fact, it has gotten so bad that some chains, such as McDonald’s, have added digital ordering kiosks. According to the Bureau of Labor Statistics, the restaurant sector had a turnover rate of 81.9% in the period between 2015 and 2017 however, the industry estimates that the rate is higher. 

18. 63.3% of business owners have stated that it is easier to hire employees than retain them. 

According to Zenefits Employee Turnover Statistics 2019, more than half of business owners are having trouble retaining their employees. In fact, one out of three business leaders don’t expect their employees to stay longer than a year. And while the latest unemployment statistics state that unemployment is low, new hires seem to have commitment issues!

19. 67.8% of business leaders can notice that an employee is about to leave. 

Most business leaders can tell if their employee is thinking of leaving. And the tell tale sign?Loss of performance.

Here are the symptoms they notice:

  • Performance decline - 60.5%
  • Unusual office behavior - 47.6%
  • Absenteeism - 50.6%
  • Tardiness - 47.6%

Key Takeaways 

We have now covered the turnover meaning, the turnover rate formula, as well as the most important facts. But is there a good side to it all?

What is a good turnover rate?

To find out if your business has a ‘healthy turnover rate’, compare it with the national average of your industry or other companies in the same industry that you consider your main competitors.  While each situation is different, it is good to be somewhat close to the average. Don’t be too discouraged - you can prevent your employees from leaving. Business relationships are a two-way street, after all.

If you think it’s inevitable, try to look at it as an opportunity to replace disengaged employees with new ambitious hires. And don’t forget to always check out the latest employee turnover statistics!