What is Voluntary Turnover?

At a glance

Voluntary turnover, a crucial HR metric, is the percentage of employees who choose to leave an organization. Understanding this metric empowers HR professionals and small business owners to make informed decisions about their workforce. 

Published on:
June 3, 2024

Understanding Voluntary Turnover

Voluntary turnover measures how often employees choose to leave a company instead of being let go. It's important to note that voluntary turnover is different from involuntary turnover, which refers to employees who are terminated or laid off. Some turnover is always expected. However, when the voluntary turnover rate is high, it may indicate room for improvement in a company's employee engagement and retention. This makes it an essential indication of employee satisfaction. As an HR metric, the voluntary turnover rate uses the general formula (for a specific time frame): the number of employees who left voluntarily divided by the number of total employees multiplied by 100. You can also calculate VT as a percentage of total turnover, dividing the number of employees who left voluntarily by the total number of employees that left during a period.

Voluntary turnover measures how often employees leave a company by choice and can indicate areas for improvement in employee satisfaction. The metric is calculated as the percentage of employees who left voluntarily divided by the total number of employees.

Causes of Voluntary Turnover

Employees leave companies for many reasons, from management issues to organizational problems to no longer fitting with their ideal career journey. Some other common causes that employees leave include:

  • General job dissatisfaction
  • Poor or unfair compensation
  • Lack of flexibility (e.g., hybrid or remote work options)
  • Lack of growth opportunities 
  • General burnout

The factors mentioned above are largely in a company's control. Still, there are less controllable reasons why workers might want to leave, including:

  • Receiving a better offer from another organization
  • Job market insecurity 
  • Making a significant life change, such as moving, that your organization cannot support
Employees may leave companies due to factors such as job dissatisfaction, poor compensation, and lack of flexibility or growth opportunities, as well as other reasons beyond a company's control.

Best Practices for Small Businesses for Preventing Voluntary Turnover

The first step to solving your organization's voluntary turnover rate problem is admitting that you have one. Calculate your voluntary turnover rate and compare it against industry benchmarks to determine whether your VT is above or below average. Additionally, be mindful of trends, such as more exits in one department than others.

When addressing voluntary turnover, it's crucial to approach exiting employees with care and empathy. Understanding their reasons for leaving provides valuable insights into areas where your organization can improve. Use offboarding techniques, such as exit interviews, to gather feedback. Moreover, it prioritizes employee retention from the outset, offering benefits that foster loyalty, such as transparent hiring practices, fair pay, learning opportunities, and robust employee engagement strategies.

To reduce voluntary turnover, small businesses should prioritize employee retention and use offboarding techniques to incorporate feedback from departing employees into ongoing employee engagement strategies.

Main takeaway

Voluntary turnover measures how often employees leave a company by choice, making it a valuable metric for exploring an organization's level of employee satisfaction. Employees can leave for several reasons, and employers should use offboarding techniques such as exit interviews to understand their causes for doing so. To reduce voluntary turnover, small businesses should calculate and understand their own VT rate, compare it to industry standards, and, if high, place more focus on improving employee engagement. As HR professionals and small business owners, you have the power to influence these factors and create a positive work environment that encourages employee retention.

About the author

Casey Pontrelli

Casey Pontrelli is a multi-talented professional with a background in content creation, branding, and social media marketing. Whether writing for a newspaper, eCommerce website, B2B startup, or a marketing agency, she has taken her strong background in journalism and turned her focus to SEO and content marketing. She’s written about everything from boutiques to cars to small businesses, and enjoys most when she knows her writing has had an impact. When she’s not writing up a storm or creating attention-grabbing social media posts, Casey enjoys hanging out with her partner and three cats, Eddy, Larry, and Marcus, going on long walks in the Green Belt, and, predictably, reading.

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