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Understanding Employee Turnover

Posted by Alexa Rivera on Mar 29, 2022 8:53:45 AM
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Retention and turnover have been quite the topic of conversation in the last couple of years and it seems employees and employers are both growing frustrated and confused.

There is constant talk of The Great Resignation, and while many people got their “ah-ha” moment in isolation, we can only place the blame on the pandemic for so long. The reality remains that understanding employee turnover goes far deeper than The Great Resignation.

A Millennial Workforce

A stark reality is that Millennials now make up 40% of the U.S. Workforce. For a plethora of reasons, it seems that Millennials simply don’t stay at their jobs as long as previous generations.

Some of this is becoming a cultural norm, where it is normal for younger generations to stay an average of 2.8 years at a job. This is a new reality for other generations, many of which are likely managing these millennials.

According to the U.S Bureau of Labor Statistic, the median tenure of workers aged 55-64 at a single company is 9.9 years. The generational differences in mentality surrounding tenure are vastly different and can leave managers confused as to what the root of the problem is.

More Than Just a Job

Besides your typical career advancement movements, there is a number of reasons employee turnover could be high within an organization, or even in an industry.

Employees are seeking more than just money in their jobs and more and more, you’ll hear the unified voice exclaiming how, “you should work to live not live to work” –a sentiment that may not have been held in the same regard in previous decades.

Seeking a purposeful mission and companies that inspire them are top of mind for many employees that are jumping ship early. A job must come with true purpose and a culture that pushes their people to be better or risk losing them completely.

Finally, time off, benefits, and promotion opportunities are all appealing reasons for employees to find new jobs and will likely be the cause of turnover if an organization can’t quite keep up.

Improving Retention

Keeping your employees at your organization ultimately comes down to being communicative in all aspects of business.

Communicate goals and expectations, opportunities to improve, and areas where productivity is lacking. All of these elements of business can be sensitive but when clearly communicated between employee and employer, so much confusion and frustration can be avoided further down the road.

Additionally, making any growth opportunities known and incentivizing employee development can lead to extreme productivity and overall satisfaction in your peoples’ career paths, effectively negating turnover.

MEasuring Employee Turnover

With a better understanding of the why and the solution, how can you measure if your turnover rate is enough to raise some eyebrows and cause concern?

For basic calculation, divide the number of employees who leave in a year by the average number of employees to get a percentage. Easy enough, but how do you find significance in the percentage?

For starters, you need to consider the industry. What is high for one vertical may be completely typical for another. While the national average turnover rate is 20%, industries like retail or wholesale have the highest annual turnover rates at 37%.

Finally, ensure you are accounting for voluntary and involuntary turnover rates separately. Involuntary turnover rates include employees who are fired, laid off or otherwise terminated. Voluntary turnovers on the other hand, include employees who left on their own terms.


While managing and mitigating employee turnover can be extremely difficult to handle, remember that your employees are just people. They likely have the same goals, desires, and priorities that you do and want to be happy at work.


If you find HR functions are taking over precious time to put towards managing your employees, evaluate HR solutions and partners that help you through you day to day.

This blog post was written by Alexa Rivera and may not be copied or published without PeopleGuru's express written consent.

Topics: Workforce Management, HR, retention

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