High employee turnover rates can negatively impact a business from top to bottom, costing the company money, slowing daily work procedures, and increasing staff burnout.

Employee turnover is a critical metric for any organization, reflecting the rate at which employees leave the company. Understanding average turnover rates and the factors influencing them is essential for effective workforce management.

We've provided some easy ways to tell if your company's turnover rate is healthy and where to look to increase retention rates and employee experience.

Average Employee Turnover Rates

While comprehensive 2025 BLS data is still developing, we can extrapolate from recent trends and preliminary reports. The overall U.S. employee turnover rate in late 2024 and early 2025 is projected to remain relatively high, influenced by ongoing labor market dynamics and evolving employee expectations. 

Overall National Average:

• Based on current projections, the average annual employee turnover rate across all industries in the U.S. is estimated to range under 15% (although it may vary slightly depending on the industry). This figure is influenced by factors like economic fluctuations, industry-specific trends, and workforce demographics.

Key Factors Influencing Turnover in 2025:

• Remote and Hybrid Work: The continued prevalence of remote and hybrid work models has significantly impacted business operations.
• Skills Gap: The demand for specialized skills, particularly in technology and data science, continues to outpace supply, leading to increased competition for talent.
• Economic Uncertainty: Fluctuations in the economy can lead to both increased and decreased turnover, depending on industry and company stability.
• Employee Wellbeing: Increased awareness of mental health and work-life balance is driving employees to seek organizations that prioritize these aspects.

Industry-Specific Turnover Benchmarks

• Technology:
  • The technology sector consistently experiences higher turnover rates due to the competitive nature of the industry and the demand for specialized skills. In 2025, turnover rates in tech are expected to range from 20% to 25%. Factors contributing to this include:
    • Rapid technological advancements requiring continuous upskilling.
    • High demand for software engineers, data scientists, and cybersecurity professionals.
    • Startup culture and the lure of innovative projects.
• Finance:
  • The finance industry typically sees moderate turnover, but this can fluctuate based on economic conditions. In 2025, finance turnover rates are projected to be close to 15%. Key factors include:
    • Competitive compensation and bonus structures.
    • Regulatory pressures and compliance requirements.
    • The impact of fintech and digital transformation.
• Supply Chain:
  • The supply chain sector has faced significant challenges in recent years, leading to increased turnover. In 2025, turnover rates in supply chain are expected to range from 20% to 25%. Factors include:
    • Labor shortages in logistics and transportation.
    • Increased demand due to e-commerce growth.
    • The need for skilled professionals in supply chain management and analytics.

How Companies Use AI and Predictive Analytics to Identify Turnover Risks and Improve Retention

Companies are increasingly leveraging AI and predictive analytics to proactively identify turnover risks and implement targeted retention strategies.

• Predictive Modeling:
  • AI algorithms analyze vast amounts of employee data, including performance metrics, engagement surveys, and communication patterns, to identify patterns and predict which employees are at risk of leaving.
  • These models can identify key predictors of turnover, such as declining performance, reduced engagement, and changes in communication frequency.
• Sentiment Analysis:
  • AI-powered sentiment analysis tools can analyze employee feedback from surveys, emails, and online platforms to gauge employee morale and identify potential areas of concern.
• Personalized Retention Strategies:
  • Based on the insights gained from AI and predictive analytics, companies can implement personalized retention strategies, such as targeted training, mentorship programs, and flexible work arrangements.
• Automated Intervention:
  • AI can trigger automated alerts when an employee exhibits signs of potential departure, allowing managers to intervene proactively.

Is Your Company's Employee Turnover Rate Healthy?

One way to calculate if your company has a healthy turnover rate is to divide the number of people hired by the number of people who left the company during the same time period, and then multiply that number by 100. This will give you an average turnover rate percentage that business owners can compare to the industry average provided by the Bureau of Labor Statistics.

As business owners, you might not always have immediate access to detailed turnover statistics. However, you can gain valuable insights by closely observing your company culture. If you notice that your most valuable employees are frequently departing or seeking better opportunities elsewhere, this could be a strong indicator of an unhealthy turnover rate that warrants your attention.

Losing high-performing employees in significant numbers can be costly for your business, create more stressful working conditions, and lead to burnout among your remaining staff. These consequences will likely be felt across the entire company. Therefore, business owners, if you are witnessing these issues in your workplace, it's a strong indication that your turnover rate is unhealthy and needs to be addressed.

Conversely, business owners, if you observe that departing employees are primarily your lower-performing staff who struggle to meet expectations, while your top talent remains and thrives, this likely indicates a competitive and healthy environment with a good turnover rate and strong retention – an ideal scenario for sustained success.

Employee Retention Rates Matter

As business owners, a high employee retention rate is directly beneficial to your company's growth and is a strong indicator of employee satisfaction. Retention rates are the inverse of turnover rates, so it's generally advantageous for your business to have high retention, where staff members remain with the company for significant periods. To achieve lower turnover and higher retention, consider implementing effective employee retention strategies that proactively address employee attrition.

Focusing on Retention in the Hiring Process

Some proactive employee retention strategies can include hiring the right workers who intend to stick around.

Hiring managers may ask questions like "Where do you see yourself in five years?" and "What are your professional goals?" to try and gauge if a candidate has intentions to stay with the company for a while.

In the hiring process, employers may also pay more attention to applicants' resumes to see if they remained in their former roles for respectable periods of time or if they are at higher risk of turnover.

For more information on the hiring process check out our articles on Using Pre-Employment Assessments in the Hiring Process and Tips for Finding the Right Employees.

Positive Employee Experiences Increase Retention

Employee expectations regarding benefits have evolved significantly, with a greater emphasis on holistic well-being and flexibility.

• Mental Health Support:
  • Companies are increasingly offering comprehensive mental health benefits, including access to counseling, therapy, and mindfulness programs.
  • Employee assistance programs (EAPs) are becoming more prevalent, providing confidential support for personal and professional challenges.
• Flexible Work Arrangements:
  • Remote and hybrid work options are now considered essential benefits, offering employees greater work-life balance and autonomy.
  • Flexible hours and compressed workweeks are also gaining popularity.
• Development Opportunities:
  • Employees are seeking opportunities for continuous learning and career advancement.
  • Companies are investing in training programs, mentorship opportunities, and tuition reimbursement to support employee development.
• Wellness Programs:
  • Beyond mental health, holistic wellness programs including physical health initiatives, financial wellness resources, and ergonomic assessments are becoming standard.
• Inclusion and Belonging:
  • Benefits that support diverse employee populations, including parental leave, gender affirmation support, and community building initiatives are increasingly important.

Remember This

High employee turnover in 2025 continues to damage businesses through higher costs, lower productivity, and increased staff burnout. Understanding turnover rates, influenced by factors like remote work expectations, skill gaps, economic conditions, and employee wellbeing, is vital for effective workforce management. Companies are leveraging AI to predict and mitigate turnover risks. Analyzing top talent retention helps gauge the health of a company's turnover rate. Reducing turnover requires strategic hiring and robust retention strategies centered on positive employee experiences, including mental health support, flexibility, development, and inclusive benefits.

To learn more about managing employee turnover and enhancing retention strategies tailored to your business needs, contact firsPRO today.