Voluntary vs Involuntary Turnover: Definitions, Calculations, and Benchmarks

Overview

• The amount and type of employee turnover is often a key indicator of workforce health.
• Knowing the difference between voluntary and involuntary turnover helps leaders understand why people leave and what these patterns reveal about culture, performance, and priorities.
• This blog breaks down each type of turnover, how to calculate them, and practical ways to leverage benchmarking data.

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Table of Contents

• What Is Voluntary Turnover?
• What Is Involuntary Turnover?
• Key Differences Explained
• How to Calculate Turnover
• Benchmarking Your Turnover
• Interpreting Benchmark Data
• Turnover FAQs

What Is Voluntary Turnover?

Voluntary turnover happens when employees choose to leave on their own terms. The most important thing to understand is that voluntary turnover reflects sentiment, experience, and perceived opportunities within your organization. It shines a light on how employees feel about their work, their managers, and promotion expectations.

People tend to resign for obvious reasons, such as:

• Better pay or benefits
• Lack of career growth
• Poor relationship with their manager

While some voluntary turnover is healthy, consistently high levels signal deeper cultural or leadership issues. However, companies that track voluntary turnover closely often catch retention problems early (hopefully your company is one of them)!

What Is Involuntary Turnover?

Involuntary turnover occurs when a company decides to stop employing workers. This type of separation usually reflects performance, employee behavior, or structural changes in the business. Involuntary turnover is sometimes necessary for long term success, yet excessive levels can point to poor workforce planning.

Common drivers of involuntary turnover include performance challenges, redundant roles during a restructuring process, and violations of workplace policy. It's important to review turnover data within the context of your organization, because involuntary turnover can reflect either thoughtful management or organizational misalignment. The answer is always in the context.

Key Differences Explained

The main difference comes down to who makes the decision - Voluntary turnover is an employee decision, while involuntary turnover is an employer decision. That single distinction affects how each metric should be interpreted. Here are a few ways they differ and signals that they can send:

• Voluntary turnover often reveals employee engagement and satisfaction trends.
• Involuntary turnover often reflects hiring quality and the effectiveness of managers.
• High voluntary turnover is usually more expensive and harder to fix than high involuntary turnover.
• High involuntary turnover often indicates a need to improve recruiting, onboarding, and workforce planning.

Understanding these differences helps leaders target the right root causes rather than applying generic retention strategies.

How to Calculate Turnover

Turnover calculations are relatively straightforward. The formula is simple and works for both voluntary and involuntary turnover. To calculate turnover for any given period:

1. Identify the number of leavers for that category (voluntary or involuntary).
2. Divide the number of leavers by the average number of employees during the period.
3. Multiply the result by 100 to convert it into a percentage, also known as the turnover rate.

Many companies calculate turnover monthly and report it quarterly. The more frequently you track it, the earlier that you’ll be able to spot concerning patterns!

Benchmarking Your Turnover

No number is truly meaningful until you can compare it to something else. Benchmarks provide the data point for you to compare turnover in your organization against. They help you understand whether your levels are typical for your industry, size, region, or all three.

While Mercer state an average turnover of 13% in the US, our general rule is that anything under 10% is regarded as healthy. With that said, it's always wise to gather benchmarking data relevant to your company. Here are some things to keep in mind:

• Voluntary turnover tends to be higher in competitive labor markets.
• Involuntary turnover tends to rise during economic uncertainty.
• Customer service and hospitality roles often experience higher turnover than technical or professional roles.
• Benchmarking data works best when segmented by role type or business unit.

Smart leaders avoid relying on a general benchmark, with the most accurate comparisons always based on relevance.

Find benchmarks for your industry, size, and geography

Interpreting Benchmark Data

When it comes to interpreting turnover benchmarks, there’s two key questions to ask:

1. Is our turnover higher or lower than the benchmarks?
2. Is the trend rising or falling over time?

Companies that ask these questions will quickly understand how they stack up and what it means for them. For example, a slightly higher voluntary turnover rate may be acceptable if the market is experiencing the same shift. On the other hand, if your involuntary turnover is double the benchmark, you likely have issues in hiring, training, or workforce planning.

Turnover FAQs

What is a healthy employee turnover rate?

A healthy rate depends on industry and role type, but many organizations aim for a level that balances stability with a healthy number of leavers.

How often should companies measure employee turnover?

Monthly tracking with quarterly reviews works best for identifying trends early on.

What is the difference between turnover and attrition?

Turnover refers to all leavers or exits from an organization. While attrition is when positions remain unfilled after someone leaves (no backfill).

Is high involuntary turnover always a concern?

Not always. It can reflect necessary restructuring or quality improvements, but consistently high levels suggest hiring, training or workforce planning issues.

How can organizations reduce voluntary turnover?

The top three reasons for voluntary turnover are low pay, bad managers, and lack of career progression opportunities. To combat these, offer competitive compensation, provide clear career development opportunities, and invest in manager coaching.

Should startups expect higher turnover?

Yes. Early stage companies often go through rapid changes that naturally increase both voluntary and involuntary turnover.

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