As a small business owner, understanding your workforce dynamics is crucial. You may have encountered the terms attrition vs turnover and wondered what separates the two. While they’re often used interchangeably, attrition and turnover measure very different workforce realities — and each carries distinct implications for cost, planning, and employee retention.
In today’s labor market, where retirements, skills shortages, and employee expectations continue to evolve, knowing how to interpret attrition vs turnover is more important than ever. These metrics don’t just describe who’s leaving — they help explain why and what to do next.
Knowing the difference between attrition and turnover can save your company money. According to Gallup, the cost to replace an employee who quits or is fired can be as much as three times that employee’s salary. In 2025, the average weekly earnings of an employee were $1,204 or $62,608 annually, according to the Bureau of Labor Statistics (BLS).
Keeping those BLS statistics in mind, that would be nearly $187,824 to replace that employee! Losing employees can get costly, especially if you’re a small business.
While attrition vs turnover has long been used to measure workforce movement, the reasons employees leave — and how employers respond — have changed significantly in recent years.
Attrition today is often tied to planned workforce shifts, such as retirements, voluntary role eliminations, or employees leaving for personal reasons unrelated to job satisfaction. In many organizations, attrition reflects intentional decisions not to backfill roles and may align with long-term workforce planning.
Turnover, by contrast, plays a different role in the attrition vs turnover equation. Sudden or repeated turnover often signals deeper issues such as disengagement, ineffective management, misaligned hiring practices, or limited growth opportunities.
Understanding attrition vs turnover allows employers to move beyond headcount alone and use these metrics to guide hiring decisions, succession planning, and long-term employee retention strategies.
Attrition, on its most basic level, is defined as a “gradual decrease”. When we talk about employee attrition, we aren’t simply talking about employees who leave for better job offers.
We’re also talking about employees who leave due to retirement or for their own personal reasons - like moving to another geographical area.
The company typically knows about the employee’s departure ahead of time, especially in the case of retirement. Attrition implies that an organization does not have direct control over how many employees are lost for various reasons.
The key to understanding, if the departure is considered attrition, relies on two facts;
Involuntarily terminating an employee and then deciding not to backfill the role would be considered restructuring.
Conversely, when an employee decides to leave of their own volition and then you do decide to replace them – that’s turnover.
Employee turnover also refers to a reduction in the workforce. However, rather than it being a catchall for everyone who leaves your company, it only refers to those who leave the organization that you intend to replace – both voluntarily and involuntarily.
This encompasses all termination scenarios, such as an employee being terminated, getting a better job offer somewhere else or leaving due to career stagnation/inability to advance.
Additional reasons for employee turnover can also include:
When employees leave due to any of the above reasons, it can reflect poorly on your business and may indicate the need for cultural and managerial changes to improve employee retention.
When it comes to attrition vs turnover, a major difference between the two is that an employee leaving due to turnover results in the need to immediately hire someone else to fill the position, and the departure is usually sudden and unanticipated.
In many cases, employee turnover reflects deeper issues tied to why good employees leave, including poor leadership, limited growth opportunities, or misaligned expectations.
RELATED: Stay With Me; Why Good Employees Leave >>
The formulas for calculating employee attrition rate and turnover rate are the same. The difference lies in how you interpret the data.
If turnover is high, it means that many employees are leaving the organization – either voluntarily or involuntarily. High turnover can indicate workforces that are disengaged, aren’t offered sufficient growth opportunities, or could even be as simple as making a wrong hire.
A high attrition rate typically indicates the level of people retiring or resigning – and always indicates that these employees will not be replaced. Knowing your attrition rate as an organization can be invaluable information for your organization.
It can help you understand the direct and indirect costs of new hires when isolating that personnel in the below formula. It can even help you understand your organization from a broader perspective to implement effective workplace plans for the transfer of knowledge as key employees leave the company that you don’t intend to backfill.
Overall, tracking your organization's attrition rate can be a fantastic way to stay ahead of the needs of your organization.
RELATED: When Employees Lose Trust in Their Boss >>
To calculate your turnover or attrition rate, you need to know the following:
This equation can be represented by:
[(Number of Separated Employees {either attrition or turnover-related})] / [(Average Number of Employees Typically Employed)] * 100 = Company Attrition/Turnover Rate
For this example, let’s say that for the last six months, you’ve kept an average of 125 full-time employees on your payroll. During that same six-month period, you lost 35 employees for various reasons that are either classified as attrition or turnover (but not both!). Your equation would be:
(35/125) * 100 = 28%
In the above example, the employee attrition/turnover rate would be 28%. The United States Bureau of Labor Statistics reports the separation rates for 2016 through 2020 as ranging from 42.6% to 57.3%, respectively. This is an average rate over the last five years of 46.5%.
When calculating these metrics, it is important to remember that employee attrition and turnover are generally considered a normal part of the lifecycle of a business. They aren’t inherently considered negative and don’t always reflect poorly on the company’s hiring practices or culture.
Interpreting attrition vs turnover correctly is critical because not all employee departures indicate a problem.
Healthy attrition within the attrition vs turnover framework may include:
Concerning turnover, however, often shows different patterns in the attrition vs turnover data, such as:
When turnover appears in these patterns, it may indicate hiring mismatches, onboarding gaps, or leadership challenges that require attention.
Reducing employee churn starts with understanding attrition vs turnover — and recognizing which type of departure your organization is experiencing.
When employers track attrition vs turnover over time, they can:
Clear visibility into attrition vs turnover also allows employers to evaluate which employee retention strategies are actually reducing preventable turnover over time.
Exit interviews, stay interviews, and regular workforce reviews become far more valuable when paired with accurate attrition vs turnover data. Used consistently, these metrics help employers refine retention strategies, strengthen management accountability, and better understand why top talent leaves organizations before turnover accelerates.
Understanding the difference between attrition vs turnover is only the first step. Acting on those insights — through better hiring, stronger onboarding, effective management practices, and compliant HR processes — is what drives long-term workforce stability.
As a Kansas City, Missouri PEO, Axcet HR Solutions partners with small and mid-sized businesses to help interpret workforce data, reduce unnecessary turnover, and plan for inevitable attrition. Our team supports employers with HR compliance, risk management, and employee retention strategies designed to grow with your business. Reach out today >>
.png){kind=logo}
.webp)
Let us know what you think...