11 Essential Things to Know About Employee Turnover – Infographic

TL;DR summary

• Employee turnover is measurable, manageable, and often far more expensive than teams expect.
• Start by tracking your employee turnover rate by role, location, manager, and time period.
• Separate voluntary turnover from involuntary turnover to understand what you can influence.
• Use consistent turnover rate formulas and the average number of employees to keep reporting clean.
• The biggest hidden costs come from recruitment costs, lost productivity, and knowledge gaps.
• If you want to reduce high employee turnover, focus on job expectations, managers, and employee engagement.
• This infographic summarises 11 essentials from our employee turnover white paper, with practical next steps.

Do you know how much employee turnover costs your organisation? And how much you could save by improving employee retention and building extraordinary teams?

Only 28% of organisations can answer “yes” to both questions. For everyone else, it’s a costly dilemma that often gets parked until it becomes urgent: resignations spike, one department is stretched, and open positions pile up.

If you want to do something about high turnover, the first step is to measure it properly and consistently. That’s exactly what this infographic is for: a clear, practical snapshot of the essential employee turnover measures that help HR leaders move from anecdotes to action.

This infographic pulls key points from our white paper, Employee Turnover: The hidden cost crippling business. It covers the metrics to monitor, what to include when you calculate employee turnover costs, and how to start reducing employee turnover before it becomes chronic.

What employee turnover refers to (and why it matters)

Employee turnover, also known as staff turnover, measures the number of employees who leave an organisation during a specified time period, typically in one year. Some turnover is normal. But high employee turnover rates usually signal a mismatch between the role and reality, poor management, limited career development, or a company culture problem. Supporting a healthy work-life balance is also crucial for retention.

It also creates compounding pressure on remaining staff: workload increases, employee morale drops, employee wellbeing suffers, and team performance can slide. The departure of co-workers can further impact morale and organisational stability, as employees may feel less motivated or question the work environment.

Measure employee turnover rate properly

A strong turnover rate metric needs two things: a clear definition and a consistent formula.

• Turnover rate = (total separations during a time period ÷ average number of employees during the same time period) × 100
• Track the average number of employees consistently (for example, start-of-month + end-of-month ÷ 2).

Some HR teams also track internal turnover, such as internal transfers, to better understand internal mobility and career progression within the organisation.

If you don’t standardise how you calculate employee turnover, you’ll end up comparing apples to oranges across teams and months.

Don’t lump all turnover together

To make turnover data usable, split it into categories:

• Voluntary turnover: employees leaving by choice (resignations).
• Involuntary turnover: employees leaving due to decisions made by the organisation (redundancy, termination for poor performance, end of contract).

This is where insight lives. If voluntary turnover is driving the issue, focus on retention levers. If involuntary employee turnover is high, focus on hiring quality, job expectations, and management capability.

Turnover can also be analysed by demographic groups to identify trends across different segments of the workforce.

A good example can be found with Sapia.ai’s work with Holland & Barrett, a UK-based pharmaceutical chain. By interviewing everyone, H&B were able to reduce their churn by 89%.

The true cost goes well beyond “replacing employees”

When teams think about turnover, they often focus on recruitment agency fees or job postings. Those direct expenses matter, but they’re rarely the biggest cost. The financial impact to replace employees goes far beyond initial recruitment, as onboarding and training new staff can be substantial.

The larger impact often comes from:

• time spent to fill open positions
• lost institutional knowledge and knowledge gaps
• reduced output while new employees ramp up
• distraction load on hiring managers and HR teams
• ripple effects on employee engagement and job satisfaction

The cost of doing business remains high, and replacing employees can amount to substantial sums, such as £180,000 for SMEs with a 13% turnover rate.

If you want to retain talent, you need to treat turnover as a business metric, not an HR inconvenience. Take a look at Sapia.ai’s impact on Starbucks, for example. By implementing automated tools, they managed to reduce early staff turnover by 56%, hugely increasing the efficiency of their Australian expansion. 

What drives high turnover most often

The causes of employees leaving vary by sector (food services vs professional services, for example), but patterns tend to repeat:

• unclear job expectations at hiring
• poor managers and inconsistent support
• limited career path and career advancement
• unsustainable work life balance and stress
• weak employee satisfaction and engagement signals ignored too long
• toxic work environment
• inadequate compensation
• external factors and life events (which you can’t control, but can plan for)

Competitive job offers from other companies can also entice employees to leave.

A healthy employee turnover rate depends on role type, market, and seniority. The key is to set your own baseline, then identify where turnover is concentrated and why. Low employee turnover is desirable because it reduces costs and helps stabilise your workforce.

How employee engagement impacts turnover

Employee engagement is a powerful driver of employee retention and a key factor in reducing employee turnover rates. When employees feel engaged, meaning they are emotionally invested in their work and connected to the company’s mission, they are far less likely to leave. Engaged employees are more productive, show higher levels of job satisfaction, and contribute positively to team performance. In contrast, low employee engagement often leads to higher turnover rates, as employees who feel disconnected or undervalued are more likely to seek opportunities elsewhere.

Research from Gallup shows that organisations with high employee engagement experience 24% to 59% lower turnover rates compared to those with low engagement. To improve employee retention, companies should focus on building a positive work environment, offering opportunities for career development, and encouraging open communication. Simple steps like recognising achievements, providing regular feedback, and supporting work-life balance can make a significant difference in how employees feel about their workplace, and whether they choose to stay.

Industry trends: what’s normal and what’s not

Understanding how your organisation’s turnover rate compares to industry norms is essential for effective workforce management. Employee turnover rates can vary widely depending on the sector. For example, according to CIPD, hospitality and retail are the highest turnover industries in the UK, with staff churn rates in hospitality reaching up to 52%, well above the average. In contrast, industries like finance and insurance report much lower turnover rates, averaging about 12% annually.

By benchmarking your turnover rate against labour statistics and industry averages, you can determine whether your organisation’s rate is healthy or a cause for concern. This comparison helps identify if high employee turnover is an industry-wide challenge or a sign of internal issues that need attention. Using this insight, HR teams can develop targeted strategies to reduce turnover and improve employee retention, ensuring your organisation remains competitive in attracting and retaining top talent.

Monitoring and analysing turnover for actionable insights

To truly understand and address employee turnover, organisations need to go beyond basic metrics and dig into the reasons behind employee departures. Monitoring and analysing turnover data allows HR professionals to spot trends, identify problem areas, and develop data-driven solutions. This process should include tracking turnover rates by department, role, and manager, as well as gathering feedback from departing employees through exit interviews, surveys, or focus groups.

Analysing this turnover data can reveal underlying issues such as poor management, limited career development, or a misaligned company culture. For example, if a pattern of employee departures points to a lack of career advancement opportunities, investing in training and development programs can help retain talent. By using these insights, organisations can implement targeted initiatives to reduce turnover, improve employee satisfaction, and create a more supportive environment for both current and future employees.

The ROI of investing in retention

Investing in employee retention delivers measurable returns for organisations of all sizes. High employee turnover rates come with significant recruitment costs, lost productivity, and the expense of training new hires. According to the Society for Human Resource Management, replacing an employee can cost anywhere from 90% to 200% of their annual salary, factoring in direct expenses and the impact of lost institutional knowledge.

By prioritising employee retention through strategies like employee engagement programs, career development opportunities, and competitive compensation, companies can reduce turnover and save on these substantial costs. Beyond the financial benefits, high retention rates also lead to stronger team performance, higher job satisfaction, and a more positive company reputation. Ultimately, investing in retention not only reduces turnover but also supports a thriving business and a more engaged, productive workforce.

Conclusion

High turnover isn’t solved with a single programme. It’s solved when you track the right employee turnover rate metrics, separate voluntary and involuntary departures, and fix the points in the hiring process andemployee experience that drive avoidable exits.

If you want to reduce turnover at the source, start by improving quality at the top of the funnel: clearer role expectations, structured and fair screening, and a candidate experience that sets people up to succeed.

Investing in HR software can help streamline HR processes, improve employee management, and reduce turnover. Providing easy access to HR support also fosters trust and reduces turnover.

Book a Sapia.ai demo to see how structured, mobile-first screening can help you hire more consistently and protect employee retention.

FAQs about employee turnover

About Author

Laura Belfield

Head of Marketing