What is Employee Turnover?

Employee turnover is the process by which employees exit an organization and are replaced. While often used interchangeably with turnover rate, turnover broadly encompasses the full cycle of departure and replacement — including the causes, costs, and organizational impact of workforce churn. It is one of the most closely watched workforce metrics because it directly impacts productivity, knowledge continuity, team dynamics, and financial performance.

Turnover is categorized along several dimensions. Voluntary turnover occurs when employees choose to leave (resignations), while involuntary turnover is employer-initiated (terminations, layoffs). Functional turnover removes underperformers or poor cultural fits, while dysfunctional turnover loses valued contributors. Internal turnover (employees moving to other roles within the organization) is generally positive, as it retains institutional knowledge and signals career mobility.

Understanding turnover requires looking beyond the headline number to examine patterns and drivers. Organizations should analyze turnover by tenure (first-year turnover signals onboarding or hiring problems), by department (concentration indicates management or workload issues), by performance level (high-performer turnover is the most costly), and by demographics (disparate turnover among underrepresented groups signals inclusion failures). Exit interviews, stay interviews, and predictive analytics help uncover root causes and enable proactive interventions before departure decisions are made.

Turnover is simultaneously a cost, a symptom, and a data source. As a cost, it directly impacts the bottom line through recruiting, onboarding, and lost productivity. As a symptom, it reveals underlying problems with culture, management, compensation, or career development. As a data source, turnover patterns provide some of the most actionable insights available to HR leaders. Organizations that analyze and address turnover strategically — rather than treating it as an inevitable cost of doing business — gain significant competitive advantages in talent retention and organizational stability.