High employee turnover? The real causes and impact

Updated on September 7, 2026

High employee turnover is the rate at which workers leave a company and have to be replaced, and it's expensive: replacing one employee costs 50% to 200% of their annual salary. Most of the causes are controllable, including poor management, limited career development, and weak communication. Turnover falls when organizations improve communication, recognition, pay, and career growth for every worker, including frontline and deskless staff.

Internal communications may not be the first thing you think of, but it plays a big role in a major metric at your company: turnover. Losing and replacing employees is costly, and those rates are largely dictated by how happy, and how well-informed, employees feel. New research makes the risk clear: in Firstup's State of Employee Engagement report, more than half of employees say they're looking for a new job within the year, and even those who describe themselves as engaged aren't staying put, with 40% to 46% likely to leave within twelve months and closer to 80% of the disengaged actively looking. People who are eyeing the exit aren't fully engaged, and it shows in their productivity and the quality of their work. Because HR and communicators shape that experience by improving engagement and communication, they're critical to keeping turnover, and its cost, low.

Employee turnover is the rate or number of workers who leave a company and are replaced by new employees. It happens in one of two ways. Voluntary turnover means employees quit their jobs or resign. Involuntary turnover means employees are let go. A high employee turnover rate signals that too many people are leaving too quickly.

Turnover is a key part of a company's profitability. Recruiting, hiring, and training new employees costs money and time. According to SHRM, replacing one employee costs between 50% and 200% of their annual salary, depending on the role. When turnover is high, employers spend more finding and training workers; when it's low, they benefit from tenured employees who know the culture.

The workplace has stabilized over the last few years, and the U.S. quits rate averaged 2.0% a month in 2025, close to historic lows, according to the Bureau of Labor Statistics. But lower quit rates don't mean the risk is gone: many employees stay put while quietly planning to leave.

For more details, download our State of employee engagement report here.

How can you tell if your turnover is high? Start by measuring it. The employee turnover rate formula is simple:

Turnover rate = (number of separations during a period / average number of employees) × 100.

For example, 6 departures in a month against an average of 200 staff is a 3% monthly turnover rate. You can calculate employee turnover monthly, quarterly, or annually, then compare it against industry standards from the Bureau of Labor Statistics. SHRM's turnover cost calculator helps you put a dollar figure on that rate.

So what counts as high? SHRM benchmarking puts median annual overall turnover at 15%, with the top quartile of employers at 32% or higher. For voluntary turnover alone, the median is 12% and the top quartile sits at 25% or higher. A rate approaching those upper bands is high for most employers, though context matters: retail and hospitality run structurally higher, so always compare against your own sector.

New hires are the highest-risk group. Typically, high turnover shows up first among new employees: almost 30% of new employees quit within the first 90 days of their employment, according to Jobvite. That presents an enormous cost, because the cycle of recruiting, hiring, and training starts over every time. High turnover is often the result of negative employee experiences: among those who left early, 34% report that an incident or bad experience drove them away, and 43% say the day-to-day role wasn't what they expected.

The risk doesn't end after onboarding. Qualtrics found that employees with less than six months' tenure have low intent to stay: 56% plan to leave within three years, versus 34% of more tenured workers.

Employees who are unhappy at work are more likely to leave, so there's a strong link between high employee turnover and a lack of employee engagement. Much of that engagement comes down to communication: it's the reason 52% of managers and 49% of office workers feel engaged, and 22% to 25% of employees say poor communication is pushing them to look for a new job. It usually points to deeper problems rather than one cause. Common triggers include:

• Workers who are bored, disengaged, and don't care about their work
• Better pay or benefits elsewhere
• Flexibility like remote work or paid time off elsewhere

Industries like healthcare and retail see higher turnover, since roles are repetitive and pay is low. But the most common causes are within an employer's control.

Poor management is one of the most common reasons employees resign. Managers shape the day-to-day employee experience, and Gallup finds managers account for 70% of the variance in team engagement. Trust in senior leadership is now the biggest driver of engagement, yet only 11% to 23% of workers say they trust the people at the top, according to Firstup's State of Employee Engagement report. When managers don't support their teams, disengaged employees start looking elsewhere. Inconsistent management and a lack of recognition push people out the door.

Pay is one of the most common reasons people start looking. When wages fall behind the market, employees find out quickly, and the gap between what a competitor offers and what they earn becomes the reason they take the call from a recruiter. Benefits carry the same weight, particularly in hourly and frontline roles, where modest differences in wages, scheduling, and perks decide where someone works.

Few opportunities for career development and little career advancement drive steady, avoidable losses. LinkedIn reports that career progress is the number one reason people want to learn, and that when employees can't move ahead, they leave and take their skills elsewhere. Companies with clear career paths and internal mobility keep people longer, which is why learning opportunities have become a leading employee retention strategy.

Burnout and excessive workload contribute heavily to employee turnover. Long hours, understaffing, and unpredictable schedules wear people down, and poor work life balance pushes even engaged employees to look elsewhere. Flexible scheduling and manageable workloads are consistently tied to stronger employee retention.

Frontline staff often turn over faster than desk-based employees, and weak communication is a big reason why. When internal communications are suffering, employees are more likely to seek out organizations that communicate clearly.

This gap is measurable. Firstup's research on North American workers found many describe themselves as engaged yet are still planning to leave: more than six in ten missed a critical update, and a large share intend to move on within the year. Among disengaged hourly workers, 75% feel their employer doesn't care about their wellbeing.

Employees increasingly expect communication built for the digital era. That includes:

• Messaging on the channel or device each employee prefers
• Reaching employees at times that are convenient for them
• Inviting two-way communication between executives and ground-level staff
• Authentic, transparent communication from executives and CEOs
• Reaching deskless and remote workers on a mobile app

Firstup targets messages by role, location, and behavior across app, email, intranet, and digital signage, so critical updates reach frontline and deskless workers who may never open a company email.

A positive employee experience makes people want to stay. There are four reliable ways to build it.

Strong internal communications keep employees engaged and lower turnover. Workers stay when they feel connected to the culture and supported. A few ways to improve them:

• Evaluate your current communications channels. What's working and what isn't? Standalone internal communications tools don't work as well as integrated workforce communications platforms, so email and the intranet alone won't reach every worker over time.
• Improve employee engagement by studying your employees. Learn who they are and which channels they prefer.
• Create a multi-channel approach. It lets you reach workers on their preferred channel and engage deskless and frontline employees who prefer a mobile app.
• Measure internal communications performance. Decide which KPIs matter, track the data over time, and share it with your team and leaders.

Managers shape workers' experience, and without support employees look elsewhere. Recognition is one of the highest-leverage fixes: Gallup found employees who receive high-quality recognition are 45% less likely to have left their jobs over a two-year period. Employees also value regular feedback and coaching from managers, which strengthen engagement and retention.

Review pay rates against the market on a set schedule rather than waiting for a resignation to force the conversation. The math favors acting early: a raise that keeps someone almost always costs less than the 50% to 200% of salary it takes to replace them. Be transparent about how pay is set and when it is reviewed, and apply the same discipline to hourly and frontline roles, where small differences in wages, benefits, and scheduling decide where people work.

Employees who cannot see a next step start looking for one elsewhere. Map out what progression looks like for each role, make internal openings visible before you advertise them externally, and fund the training that lets people qualify for the next job. Internal mobility keeps institutional knowledge in the building and turns career development from a reason to leave into a reason to stay.

Engagement ties directly to turnover and profitability. Gallup's analysis of thousands of teams shows highly engaged business units see up to 43% lower turnover and 23% higher profitability than disengaged ones.

High turnover is expensive, and engagement plays a big role in it. Only about 32% of U.S. employees are engaged at work, according to Gallup, and low engagement costs the global economy an estimated $10 trillion a year in lost productivity. Disengaged employees are less productive and more likely to leave.

Using that benchmark, replacing a $60,000 employee costs roughly $30,000 to $120,000 once recruiting, onboarding, and lost productivity are counted.

For more details, download our State of employee engagement report here.

High employee turnover is costly. It's usually driven by a lack of communication, lack of trust in management, uncompetitive pay, limited career growth, and poor company culture, most of which employers can fix.

Effective internal communication keeps your distributed workforce connected. A few ways to build it:

• Integrate your channels with a workforce platform
• Study your employees and find the best ways to engage them
• Develop a multichannel approach to reach every worker
• Measure the impact of your communications and track your success