Employee Turnover Rates by Industry: Updated for 2022 (2023)

Employee Turnover Rates by Industry: Updated for 2022 (1)

When it comes to workforce planning meetings, one of the top issues sure to be on the agenda will be employee turnover rates.

And this year, any conversation about employee turnover rates is sure to include talk about The Great Resignation. The Great Attrition. The Big Quit. The Great Reshuffle.

Call it what you will; this is an economic trend that started in early 2021 and has only shown signs of slowing down due to the recession we find ourselves in.

By the end of 2021, 47.8 million people quit their jobs in favor of other positions. In the United States alone, 5.9 million Americans left their jobs.

Most people said they were quitting to find a job that paid more, had a better work environment with more opportunities to advance, paid medical benefits, and were searching for a better work-life balance.

By August 2022, things seemed to be looking up, with a country-wide reported workforce larger than before the COVID-19 pandemic. While that sounds good on paper, a closer look shows that a record number of Americans quit to start their own small businesses. The irony is that these new business owners now face the same labor shortages the rest of the country is — the one they helped create.

This matters as replacing a full-time employee cost businesses at least one-half of each employee’s annual salary and can cost up to two times that amount. The costs are due to the following:

  • Recruitment and onboarding processes
  • Training new employees
  • Operational inefficiencies and delays
  • Organizational knowledge that leaves with the quitting employee
  • Opportunity loss when innovative thinkers and leaders leave
  • Negative impact on fellow staff members’ morale and burnout
  • Negative impact on the customer experience due to organizational inefficiencies

Back in 2019, the pre-pandemic days, Gallup calculated that employee turnover rates cost U.S. businesses one trillion dollars. Fast forward to 2021, and the number is estimated to be closer to 2.4 trillion.

Table of Contents

The Relationship Between Employee Turnover and Performance

Current Employee Turnover Rates by Industry

(Video) How to Calculate Employee Turnover in 3 Steps

How Employee Turnover Rates Impact Businesses

Ways to Improve Employee Turnover Rates

1. They provide an opportunity for growth.

2. They have a healthy workplace culture.

3. They promote work-life balance.

4. They are paid appropriately.

5. They are recognized for the contribution they bring.

The Relationship Between Employee Turnover and Performance

While “employee turnover rate” is a handy catchphrase to describe staff leaving, it may not be the most helpful way to assess why this is happening and what to do about it.

(Video) What is a good employee turnover rate? - FULL EPISODE

A more helpful metric in determining the relationship between employee turnover and performance starts with determining whether the turnover is happening with “top performers” or with the “bottom performers.” High turnover rates of under-performers are highly preferable to those of your top performers.

McKinsey & Company quoted a study of more than 600,000 researchers, politicians, athletes, and entertainers from “The Best and the Rest: Revisiting the Norm of Normality in Individual Performance” when they determined that high-performers are 400% more productive than average ones.

Employee Turnover Rates by Industry: Updated for 2022 (2)

They dug deeper and found that businesses shared the same statistic, if not a higher one. High-performance information- and interaction-intensive workers can be a mind-boggling 800% more productive than average- and bottom-performers.

McKinsey & Company cited a three-year project as an example of the impact this may have. They posited what would happen if you replaced the 20% average-talent workers with great workers. If the replacement staff were 400% more productive, the same project would take less than two years. If the replacement staff were 800% more productive, it would take less than one.

Clearly, if your high- or top-performers are heading out the door, you have a different and more costly problem than if your lower-performing employees leave.

Current Employee Turnover Rates by Industry

As 2022 comes to an end, the Bureau of Labor Statistics released its “Job Openings and Labor Turnover — October 2022” news release. Included in the release was a breakdown of industry “separations” that includes quits, layoffs and discharges, and other separations.

Employee Turnover Rates by Industry: Updated for 2022 (3)

Quits refer to “voluntary separations” that are initiated by the employee. Layoffs and discharges are initiated by the employer, and “other” separations cover employees leaving because of death, disability, or a transfer to another location in the same firm.

“In October, the number and rate of quits were little changed at 4.0 million and 2.6 percent, respectively. In October, quits decreased in information (-29,000).”

5,309 Total Private:

  • Mining and logging: 20
  • Construction: 326
  • Manufacturing: 390
  • Durable goods: 205
  • Nondurable goods: 186
  • Trade, transportation, and utilities: 1195
  • Wholesale trade: 144
  • Retail trade: 757
  • Transportation, warehousing, and utilities: 294
  • Information: 73
  • Financial activities: 207
  • Finance and insurance: 123
  • Real estate and rental and leasing: 84
  • Professional and business services: 1070
  • Education and health services: 728
  • Educational services: 86
  • Healthcare and social assistance: 642
  • Leisure and hospitality: 1070
  • Arts, entertainment, and recreation: 134
  • Accommodation and food services: 936
  • Other services: 230

374 Total Government:

  • Federal: 39
  • State and local: 336
  • State and local education: 169
  • State and local, excluding education: 167

Before COVID-19, the average employee turnover rate was in the neighborhood of 20%. But according to Gartner, the U.S. total annual employee turnover “will likely jump by nearly 20% from the prepandemic annual average.”

In today’s economy, another study by Gallup states that companies with turnover rates under 40% are considered “low-turnover businesses.”

Here’s the same list, somewhat simplified, of employee turnovers by industry, given in descending order of percentages:

  • Accommodation and food services: 86.3%
  • Arts, entertainment, and recreation: 76.3%
  • Retail trade: 64.6%
  • Professional and business services: 64.2%
  • Construction: 56.9%
  • Transportation, warehousing, and utilities: 49.0%
  • Nondurable goods manufacturing: 47.3%
  • Other services: 47.2%
  • Healthcare and social assistance: 39.4%
  • Information: 38.9%
  • Mining and logging: 36.2%
  • Durable goods manufacturing: 35.3%
  • Real estate and rental and leasing: 34.9%
  • Wholesale trade: 33.5%
  • Finance and insurance: 26.3%
  • Educational services: 25.5%
  • State and local government, excluding education: 20.2%
  • Federal government: 18.8%
  • State and local government education: 16.0%

How Employee Turnover Rates Impact Businesses

Digging a little deeper into how employee turnover rates impact businesses, beyond the costs to a company when they’re forced to hire and train someone new, shows that the most common impacts are related to:

  • Recruiting new staff
  • Employee productivity
  • Employee morale
  • Missed opportunities
  • Reduced product or service quality
  • Lower marketing return on investment

When it comes to recruiting new staff, the process involves more than reading resumes and conducting interviews. It starts with developing a thorough and well-defined job description outlining the “duties, competencies, qualifications, authority for decision-making, and impact of a given position on the organization.

(Video) How To Calculate Employee Turnover Rate - Employee Turnover Report Template

Once you’re satisfied with the wording on the job description, you’ll want to place ads on industry-specific platforms in order to target recruits. If your company size warrants it, you may want to consider hiring an employee recruitment service to help source and pre-screen potential employees.

One of the ways employee turnover impacts businesses relates to employee productivity. When a fully-trained and productive employee leaves the company, their replacement will need a grace period as they adjust to their new role and familiarize themselves with projects and tasks.

Long-term employees have a built-in understanding of a company’s culture, ways of doing business, and who they need to talk with to get the job done. All this “extra” intelligence is known as institutional knowledge. The only way to accumulate this knowledge is through time spent and developing long-term relationships with other team members.

Employee Turnover Rates by Industry: Updated for 2022 (4)

Employee morale can also take a hit when there are high employee turnover rates. This happens when the remaining employees are forced to take on increased workloads with more responsibility as a result of a gap in staff and also when new staff are hired and need to get up to speed on their job.

New employees can also struggle with employee morale. It can take time to learn how to do the job, relate to the team around them, and feel able to contribute to projects and deadlines. It takes an understanding boss and co-workers to onboard these new hires as quickly as possible.

There will necessarily be missed opportunities as a result of employee turnover. These missed opportunities, as well as reduced product or service quality and lower marketing return on investments, are all the indirect costs of employee turnover rates.

These are all natural consequences that come when trained and productive employees leave and new recruits step into their shoes. On average, it takes “between three and six months to learn a new job well.

That’s why most organizations have a three-month probation period in order to see how well a new hire does their job and fits in with the company culture. Granted, if the job is relatively simple to learn, the time period can be shortened considerably down to several weeks.

Ways to Improve Employee Turnover Rates

If your organization is currently experiencing higher turnover rates than you’d like, there are ways you can stem the bleeding and turn the tide.

The global pandemic is responsible for nearly seven in ten employees rethinking how they view the place work plays in their lives. A Gartner survey indicated that near the end of last year, 52% of employees said they would stay at their current jobs based on how flexible the organizations were.

Employee Turnover Rates by Industry: Updated for 2022 (5)

The United States was, until recently, commonly known as a nation of workaholics. Work became the new religion, a way to find meaning, and a “crucial part of our identity.”

In our (almost) post-pandemic world, that’s all changed. For better or worse, the “massive psychological shock” we all went through has become an opportunity to reevaluate our relationship with work. It became clear that the collective “we” wanted was to have greater control over the “terms of our labor.”

Companies must climb on board with this sentiment if they want to improve employee turnover rates and attract new hires. Understanding your employee and what their expectations are is critical.

The top trends that seem likely to continue into the new year and beyond when it comes to employee workplace expectations are:

1. They provide an opportunity for growth.

There’s a strong link between employees remaining with a company if that company offers internal promotion opportunities. Data shows that, on average, employees are 22% more likely to stay with their organization for longer than three years if they are offered an internal move through promotion or a lateral change.

(Video) Turnover rate: Why your employees are leaving and how you can address it

Employee Turnover Rates by Industry: Updated for 2022 (6)

This type of growth satisfies the employees’ desire to understand, “How can I do a better job so that I can get paid more, promoted, or land my next dream role?” Employers who neglect to answer this question will find some of their best people leaving.

2. They have a healthy workplace culture.

A University of California study identified six factors that, together, contribute to employee burnout. Toxic workplaces and a lack of fairness in the workplace were two of the areas that put staff at risk.

Employee Turnover Rates by Industry: Updated for 2022 (7)

Managers contribute greatly to a healthy workplace culture. The best ones take time to see their employees as individuals, help them develop their personal strengths, and give them work that will capitalize on them.

“Average managers play checkers, while great managers play chess.”

3. They promote work-life balance.

Companies that recognize the importance of a work-life balance will care if their staff feel they are “asked to perform tasks without being given the resources to succeed, when they feel a lack of control or when they consistently face more daily stresses than is manageable.”

Understanding that remote work is the new normal is part of the “new” workplace culture. Owl Labs’s recent survey found that offering employees the opportunity for hybrid schedules — part of the week working in the office and part working from home made for happier employees who would be willing to stay in their jobs longer.

Employee Turnover Rates by Industry: Updated for 2022 (8)

When it comes to millennials, 69% said they would be willing to give up some of their work benefits if it meant they could work from home. And the research shows these employees don’t want to work from home simply because they want to work in their pajamas. Seventy-eight percent of remote employees want to work from home to avoid distractions.

4. They are paid appropriately.

Compensation is the top reason why employees choose to leave their current company. Time off and benefits follow closely behind.

Organizations can’t expect to keep their best people without offering regular pay reviews and ensuring they are competitive with what other companies pay for similar roles. With 40-year-high inflation rates, people need to feel they are compensated to cover their standard expenses and earn enough money for extras.

Employee Turnover Rates by Industry: Updated for 2022 (9)

Research competitive salary ranges that are based on similar work done locally. This will give you the insight needed to keep your employees happier staying than going.

5. They are recognized for the contribution they bring.

Earlier this year, CNBC released an article stating that “recognition is a simple yet effective way to keep employees from quitting.” They quoted heavily from a new Gallup/Workhuman survey that noted that employees who worked for an organization that made “employee recognition a priority” are 56% less likely to look for new jobs.

Employee Turnover Rates by Industry: Updated for 2022 (10)

An old saying goes, “Good help is hard to find.” We know that good help is also hard to keep, and the companies that recognize their employees’ achievements are the ones who will have the best chance of flourishing in today’s ever-changing workforce.

(Video) Employee Turnover Rate | What is Employee Turnover Rate | F&B Management | Hospitality |

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What is the average employee turnover rate by industry 2022? ›

With a minimum of 5.43% and a max of 16.9%, the average employee turnover rate across all industries for 2022 is 9.31%.
Employee turnover rates by industry.
IndustryQ4 Annualized
Health Care13.07%
Information Technology10.39%
Internet Services8.89%
44 more rows

Are you at increased risk for employee turnover in 2022? ›

New employee expectations, and the availability of hybrid arrangements, will continue to fuel the rise in attrition. An individual organization with a turnover rate of 20% before the pandemic could face a turnover rate as high as 24% in 2022 and the years to come.

What is the industry standard for employee turnover rate? ›

However, you should aim for a turnover rate of 10% and, according to SHRM, most companies have a rate closer to 20% (and your target turnover rate will depend on different factors, such as your industry and your internal promotion rate.

What is the turnover rate in retail industry 2022? ›

A year-over-year comparison shows that turnover is also on the rise for corporate retail employees. In 2022, the average corporate turnover was 17.4%, up from 13.7% in 2021. Turnover is also up for salaried distribution center workers, at 18.6% for 2022, compared with14.

Why is employee turnover so high right now? ›

The pandemic impacted the structure and requirements of many jobs. As a result, many employees left their jobs in search of opportunities that were more similar to their original roles.

Is 20% employee turnover high? ›

Organizations should aim for 10% for an employee turnover rate, but most fall into the range of 12% to 20%. Certain industries report higher employee turnover rates due to the nature of the job.

What industry has the highest employee turnover? ›

  • For employee turnover rates by industry in 2021, the industry with the highest rate is in accommodation and food service at 86% . ...
  • For employee turnover rates by industry in 2021, the industry with the lowest rate is the government sector at 18%.
Feb 7, 2023

What is the current turnover rate in the US? ›

In the US, the annual voluntary turnover rate is 13% while the annual involuntary turnover rate is 6%. (SHRM, n.d.) Every year, 3% of high performers in companies resign. (SHRM, n.d.)

What is the average tenure at a job in 2022? ›

In January 2022, median employee tenure (the point at which half of all workers had more tenure and half had less tenure) for men held at 4.3 years. For women, median tenure was 3.8 years in January 2022, little changed from the median of 3.9 years in January 2020.

What is a reasonable turnover ratio? ›

In general, a higher accounts receivable turnover ratio is favorable, and companies should strive for at least a ratio of at least 1.0 to ensure it collects the full amount of average accounts receivable at least one time during a period.

What is an acceptable attrition rate? ›

What is a Good Attrition Rate? While it's difficult to define a “good” attrition rate, businesses should generally aim for an attrition rate of 10% or lower. Keep in mind, however, that this number will vary from company to company and industry to industry, depending on the circumstances.

What is a high employee turnover ratio? ›

A high turnover rate negatively affects the company's image. If employees leave due to poor compensation or lack of growth opportunities, it tells potential talent that it is not the best working environment. The image of a satisfied worker is a good way to attract and retain talent.

What is the turnover rate at Walmart? ›

Walmart's employee turnover rate is about 44%, which is lower than the retail industry average of 60%. This statistic is a testament to Walmart's commitment to creating a positive work environment for its employees.

What is Costco's turnover rate? ›

Costco's practices are clearly more expensive, but they have an offsetting cost-containment effect: Turnover is unusually low, at 17% overall and just 6% after one year's employment.

Is a 10 employee turnover rate considered high in HR management? ›

What is a good turnover rate? Ideally, business and HR leaders want to keep the employee turnover rate in their organization as low as possible. According to industry insiders, a 10% turnover rate is considered good, especially if the attrition comes from bottom performers.

What is the turnover rate of Amazon? ›

Endgadget said the information showed that the online retailer has an annual employee turnover rate of 150%—double the industry average—costing the company and its shareholders $8 billion annually.

What is the average turnover rate for 2023? ›

Talent turnover and scarcity will remain a risk for companies – Voluntary turnover is expected to reach 35% in 2023, according to research from Work Institute.

What is the strongest factor behind employee turnover? ›

The four main causes of turnover are lack of growth and progression, inefficient management, inadequate compensation, and poor workplace culture. These reasons for staff leaving are present at many organizations around the world.

What company has the highest turnover rate in America? ›

A new Payscale report published on Thursday ranked Massachusetts Mutual Life Insurance Company as having the highest turnover rate out of all of the Fortune 500 companies.

What job has the highest turnover rate in America? ›

Industries with high employee turnover: professional services deal with the most churn. The industry with the highest turnover rate, according to LinkedIn data, is professional services — a sector that includes companies like the Big Four accounting firms, as well as business and IT consulting organizations.

What is company current turnover? ›

To calculate the annual turnover of a company, simply add together the total sales. If the business sells products, the annual turnover refers to the total number of sales from the products sold. If the company sell services, the turnover is the total charged for these services.

What are examples of high turnover rate? ›

What are examples of high turnover jobs? Jobs that tend to have a high turnover include retail jobs, hospitality jobs, tech/IT jobs, and sales jobs.

What is current annual turnover? ›

Calculating Annual Turnover

To calculate the portfolio turnover ratio for a given fund, first determine the total amount of assets purchased or sold (whichever happens to be greater), during the year. Then, divide that amount by the average assets held by the fund over the same year.

What are the top 3 most sought after employee benefits? ›

Most Desirable Benefits According to Employees

If you want your benefits package to remain competitive, you'll want to offer health insurance, some disability and life insurance, and probably a retirement plan, such as a 401(k).

How long do Millennials stay at a job? ›

How often do millennials job-hop? According to Zippia, on average, a millennial will stay at their job for 2.75 years. And according to a Gallup report on the millennial generation, 21% of millennials surveyed report changing jobs within the past year – more than three times the rate of other generations.

What percentage of employees are looking for a new job? ›

Most commonly, 56 percent of workers are likely to search for a new job. Workers are also looking to try and optimize their work in additional ways: 47% are likely to ask for a raise at work.

Is 15% a high turnover rate? ›

There's no number that defines what is high or low, but about 15% is the average annual turnover. This means that out of every 100 employees who were in their post at the start of the year, an average of 85 is still there by the end of the year.

What is a good annual turnover ratio? ›

The average turnover ratio for managed mutual funds is 75–115%. 2 So, a conservative-minded equity investor might target funds with turnover ratios under 50%. If a fund's turnover ratio is significantly out of line with that of comparable funds, it might be something to note.

Which turnover ratio is most important? ›

The higher the asset turnover ratio, the more efficient a company is at generating revenue from its assets. Conversely, if a company has a low asset turnover ratio, it indicates it is not efficiently using its assets to generate sales.

What is the 5 and 20 rule attrition? ›

A good rule of thumb is that <5% loss leads to little bias, while >20% poses serious threats to validity. However, even less than 20% loss to follow-up can be a problem. Considering a worst-case scenario can help determine whether loss to follow-up poses a potential threat to validity.

What does 30% attrition rate mean? ›

What Is An Attrition Rate? Your attrition rate is a metric that represents the percentage of employees who leave an organisation over a specific period, either voluntarily or involuntarily.

What does 20% allowable attrition mean? ›

If you have a 20% attrition allowance, then you can drop 10 rooms per night. If you fall short of picking up 40 rooms for that night, then you will pay an attrition penalty on the difference.

Does Target have a high turnover rate? ›

Been working for Target for 4+ years now. There is no opportunity to grow within this company, even with "exemplary reviews" each year.

What is the retention rate of Google? ›

Google's retention rate is over 90%.

The fact that Google's retention rate is over 90% speaks volumes about the company's commitment to its employees.

Why is Walmart's turnover so high? ›

Walmart also is notable for remaining a low-road employer—not following the lead of other retail giants in establishing a higher minimum wage. With low wages and poor job quality, Walmart faces an estimated employee turnover rate of 70 percent per year.

What is Sams Club turnover rate? ›

Sam's Club, however, suffers from a 44 percent overall turnover rate. According to estimates by the Harvard Business Review, the total cost of turnover to Costco is $244 million annually, compared to $612 million annually for Sam's Club.

Who pays better Costco or Walmart? ›

Salaries. Of the top 3 common jobs between the two companies, Costco Wholesale salaries averaged $6 higher than Walmart.

Why is Costco turnover so low? ›

Good employee benefits

Some retail businesses do not offer perks such as health benefits or retirement savings programs, but Costco does. Offering such benefits increases employee loyalty and contributes to Costco's low employee turnover rate.

What is the average turnover in healthcare in 2022? ›

The number of workers leaving their jobs declined in the later part of 2022, leading to reduced hospital turnover. The hospital turnover rate decreased by 3.2 percent from 2021 but was still 22.7 percent in 2022. Labor competition, provider burnout, and retirement are still causing retention challenges.

What company has the highest employee turnover rate? ›

A new Payscale report published on Thursday ranked Massachusetts Mutual Life Insurance Company as having the highest turnover rate out of all of the Fortune 500 companies. Average employee tenure was a little over nine months.

What profession has the highest turnover rate? ›

Here are some examples of high turnover jobs including salary expectations, job responsibilities and the types of professionals who thrive in these positions:
  1. Fast food worker. ...
  2. Hotel receptionist. ...
  3. Childcare teacher. ...
  4. Hotel housekeeper. ...
  5. Waiter. ...
  6. Retail sales associate. ...
  7. Technical support specialist. ...
  8. Customer service representative.
Jun 24, 2022

What is a healthy annual turnover rate? ›

According to Gallup, 10% turnover is healthy, but every industry and every organization is different.

What is the US national average turnover? ›

According to the U.S. Bureau of Labor Statistics, the average employee turnover rate in 2021 was 47.2%. The turnover rate includes employees who voluntarily quit, layoffs, retirements and discharges.

What is the turnover rate for nurses in 2022? ›

1. In 2022, the turnover rate for staff RNs decreased by 4.6 percent, resulting in a national average of 22.5 percent. 2. The average cost of turnover for a staff RN is $52,350, with the range averaging $40,200 to $64,500.

What is the industry turnover rate for healthcare? ›

Hospitals average 100% staff turnover every 5 years — Here's what that costs. Hospitals have been paying astronomical prices for staff turnover, according to the "2022 NSI National Health Care Retention & RN Staffing Report."

How to calculate turnover rate? ›

You can get your average number of employees (Avg) by adding your beginning and ending workforce and dividing by two (Avg = [B+E]/2). Now, you should divide the number of employees who left by your average number of employees. Multiply by 100 to get your final turnover percentage ([L/Avg] x 100).

What is Amazon's employee turnover rate? ›

Endgadget said the information showed that the online retailer has an annual employee turnover rate of 150%—double the industry average—costing the company and its shareholders $8 billion annually.

Is employee turnover increasing? ›

U.S. employee annual voluntary turnover is likely to jump nearly 20% this year, from a prepandemic annual average of 31.9 million employees quitting their jobs to 37.4 million quitting in 2022, according to Gartner, Inc.

What companies have the worst turnover rate? ›

Here are the companies where workers don't want to leave, based on their score determined by Workforce Logiq.
  1. DuPont. Headquarters: Wilmington, Del. ...
  2. Honeywell. An aircraft engine is being tested at Honeywell Aerospace in Phoenix. ...
  3. Lockheed Martin. Headquarters: Bethesda, Md. ...
  4. Delta. ...
  5. Merck. ...
  6. Amazon. ...
  7. Microsoft. ...
  8. Intel.
Feb 20, 2020

Which industry has lowest turnover? ›

  • For employee turnover rates by industry in 2021, the industry with the highest rate is in accommodation and food service at 86% . ...
  • For employee turnover rates by industry in 2021, the industry with the lowest rate is the government sector at 18%.
Feb 7, 2023

What are the biggest drivers of turnover? ›

The four main causes of turnover are lack of growth and progression, inefficient management, inadequate compensation, and poor workplace culture. These reasons for staff leaving are present at many organizations around the world.


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