What Is Employee Turnover?
Employee turnover refers to the rate at which employees leave an organisation over a defined period of time. It includes all kinds of separations — voluntary resignations, involuntary terminations, retirements or other departures — and reflects how frequently the workforce is renewed or replaced. Turnover is a key HR metric that organisations monitor to understand workforce dynamics, stability and the effectiveness of hiring, retention and employee engagement efforts.
Why Turnover Matters for HR and Organisational Health
Turnover matters because it directly affects continuity, productivity and costs within a company. High turnover often leads to repeated recruitment, onboarding and training cycles, which consume time and resources. It can disrupt team cohesion, drain institutional knowledge and lower overall morale among the remaining staff. For HR and leadership, turnover becomes a signal — indicating potential issues such as dissatisfaction, mis-fit between role and expectations, ineffective management, or lack of growth opportunities within the organisation.
Common Types of Turnover and What They Indicate
Understanding the different types of turnover helps organisations interpret the metric more precisely and decide when action is needed. Below are common categories of turnover based on cause or context:
- Voluntary turnover — when employees decide to leave on their own (resignation, retirement, personal reasons, better opportunity elsewhere).
- Involuntary turnover — when the employer initiates the separation (dismissal, layoffs, contract termination, downsizing).
- Functional turnover — when lower-performing or mis-fit employees leave (or are asked to leave), which can be less harmful or even beneficial for the organisation.
- Dysfunctional turnover — when high-performing, critical or difficult-to-replace employees leave, causing potential damage to performance, continuity or morale.
Monitoring turnover carefully and analysing its nature enables organisations to respond appropriately — whether by improving retention, adjusting recruitment strategies or enhancing workplace conditions — and thus maintain a stable, motivated and high-performing workforce.
