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Average Turnover Rates by Industry
How is your business doing compared to industry averages? Understanding your employee turnover rate in relation to what is typical can give you a good gauge of that.
According to Gallup, a turnover rate of less than 10% is considered healthy, regardless of industry. At the same time, having a turnover rate of less than 1% can signify lack of organic mobility within your organization, stifling promotions and advancement for others.
The Cost of High Employee Turnover Rates
High turnover rates can be costly for organizations due to the expenses associated with recruiting, hiring, and training new employees. It can also impact team morale and productivity. Analyzing turnover patterns can help companies address underlying issues and improve retention strategies.
In this post, we define employee turnover as the loss of talent in your workforce over the calendar year. This rate includes natural, voluntary, and involuntary endings to jobs like retirement, layoffs, deaths, terminations, or transfers to different locations. Unlike attrition in which jobs are not replaced, turnover rates pertain to jobs are replaced.
Defining Employee Turnover
To get more specific, employee turnover refers to the rate at which employees leave a company and are replaced by new hires, or the number of employees you have at the end of the year divided by the number of employees you have at the beginning of the year. You can also use this rate to calculate employee retention with this following formula:
Reports usually express turnovers as a percentage. While you can measure it on a yearly basis, it’s possible to calculate this figure over various periods, such as monthly or quarterly. Turnover can be classified into two categories:
- Voluntary: When employees choose to leave the company. This can be for a variety of reasons such as career advancement, leaving a bad boss, pursuing better compensation, or other personal reasons.
- Involuntary: When employees are terminated by the company, they are not leaving on their own will. This can occur due to a layoff, performance issues, organizational restructuring, or other reasons.
National Average Employee Turnover Rates
According to recent YOY data from the U.S. Bureau of Labor Statistics, the national average employee turnover rate across all industries is 3.6%. However, this rate is different by industry and industry subcategories.
Average Employee Turnover Rate by Industry
- Healthcare: 20.7%
- Technology: 13.2-18.3%
- Public Education: 16%
- Aerospace 6.7%
- Arts & Entertainment: 6.4%
- Leisure, Hospitality, & Food: 6.3%
- Professional and Business: 4.7%
- Retail Trade: 4.5%
- Mining and logging: 4.2%
- Private Education and Health: 3.4%
- Construction: 3.9%
- Trade, Transport, and Utilities: 3.9%
- Manufacturing: 2.7%
- Information: 2.7%
- Finance and Insurance: 1.6%
- Government Jobs: 1.3%
As you can see, certain industries are more likely to experience higher employee turnover than others. Stabilizing these rates should be top priority for businesses, as losing talent and onboarding new candidates costs a lot of time and money.
If you notice a higher-than-normal turnover rate, it’s important to evaluate your business practices and see if there are any ways you can improve your employees’ experience. Do they have adequate compensation? Is your work culture healthy? Are there common complaints that need to be addressed? Getting to the bottom of why people leave a place of employment will help you create an environment in which talent is most likely to stay.
Prevent High Turnover by Offering Competitive Pay and Benefits
In our 2025 Recruitment Trends Report which is to be released later this year, we found that companies that offer desirable benefits make happier employees. Data pointed to younger generations desiring different types of employment perks compared to their predecessors. Here is a sample of the information you can find when we release our report later this year. Stay tuned for more insights that can aid your retention game!
Average Employee Turnover Rate by Industry
Understanding the average turnover rate in your industry provides valuable insights for both employers and employees. Industries with high turnover often reflect challenges such as job dissatisfaction, inadequate compensation, or intense work environments, while those with lower rates tend to benefit from more stable and engaging work conditions and good benefits.
By recognizing these patterns, organizations can develop targeted strategies to improve retention, enhance employee satisfaction, and ultimately foster a more productive and happy workforce.
As the business landscape continues to evolve, staying informed about industry-specific turnover trends will be crucial for navigating the complexities of talent management and building resilient, high-performing teams.
Building a candidate pipeline can also keep you prepared for the inevitable turnover that occurs in all industries. Contact Corporate Navigators today to get started on future-proofing your organization with vetted and interested candidates!
