Blog Post
Quick Read
June 14, 2021

Here's what your turnover and retention rates should look like

Employee turnover can be difficult to track as certain industries – and even jobs – often have higher rates. Here are a few considerations to keep in mind when setting a benchmark for your organisation so you can make more strategic decisions around developing or improving retention. 


The average employee turnover rate in Australia was approximately 8.2% in 2020. If you're an HR manager, you might look at that number and compare it to your company's rate and make a simple calculation: if your number is lower, you're doing great, but if it's higher, you need to do some work.

Unfortunately, calculating employee turnover and retention isn't that simple.

The ideal turnover rate (the number of employees who have left your company during a certain time period) and retention rate (the number of employees who have stayed at your company during a certain time period) for your organisation aren't necessarily the average rates listed on national surveys – they're going to depend on factors such as your industry, your historical turnover rate, and internal promotion rate. If you don't take the time to consider each of these factors, you might end up with an inaccurate view of how your company is handling employee turnover and retention.

Here are three things to consider as you establish turnover and retention rate guidelines for your organisation:

1. Measure the right metrics

Start tracking the data you need to measure turnover and retention year over year. This shouldn't only include positions lost and positions filled – you also want to collect data around specific kinds of turnover.

For example, the UK average employee turnover rate is approximately 15% a year, but that number drops when considering only voluntary turnover, and drops further when considering voluntary turnover of high-performers.

Furthermore, you'll also want to account for turnover related to employees who left a position but did not leave the company, such as in the case of a promotion or inter-departmental transfer. Or you might have a situation where you've listed two openings, filled them both, and then had to fill them again. In this case, you'll want to make sure you're tracking turnover and retention separately and not simply assuming these numbers are inversely related to each other.

To make sure you have an accurate view of what's happening within your organisation, you can start tracking the following metrics:

  • Average employee tenure
  • Positions opened and positions filled
  • Overall turnover rate (Broken down into three categories: voluntary, involuntary, and employees noted as high-performers)
  • Average turnover due to promotions or transfers

Then use established formulas from SHRM and SAMHSA to monitor your turnover and retention rates over time.

2. Consider your industry

Next, make sure you're considering your turnover and retention rates within the context of your industry. Different industries maintain different standards for turnover because they face unique challenges associated with attracting and recruiting talent with the skills needed to perform the job. For example, the retail and food services industries are often associated with high turnover rates.

3. Take action

Capturing data is a good first step but it won't help you improve retention and turnover within your organisation unless you take action. So while the first step of managing employee retention and turnover is tracking it, the real work begins when you assess your rates in the context of your industry and identify whether or not your company needs to improve its retention strategies or develop new ones.

If you find your organisations retention rates are on the low side and your turnover rates are on the high side, there's a lot you can do to improve them. Leaders can focus on increased transparency around company policies and updates, flexible work arrangements, and better employee recognition to improve retention rates, which in turn, can support a better employer brand.

There are many different ways to calculate, track, and analyse turnover and retention rates. HR leaders will need to decide how to effectively track these rates within the context of their own organisation, then use them to stay informed about how and why employees join and leave the company today and in the years to come.

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