Resource description: Learn the difference between voluntary and involuntary turnover, why each type matters for your HR strategy, and how to reduce preventable exits before they cost you money and momentum.
Turnover costs organizations in the U.S. $1 trillion a year, but not all turnover is the same.
Letting an employee go due to longstanding performance issues is different from a star employee leaving for a competitor. An employee retiring after a long tenure is different from a budget-driven restructuring.
But what is the difference?
Some turnover is healthy. Some is unavoidable. And some is incredibly expensive, the disruptive kind that signals deeper issues with hiring and management.
In this article, we break down the difference between voluntary and involuntary turnover, explore what causes voluntary turnover, and share practical strategies for reducing preventable exits.
What is a voluntary turnover?
Voluntary turnover occurs when an employee decides to leave an organization, whether by resigning, retiring, relocating, or accepting another offer. Voluntary turnover can also occur for personal reasons, such as stepping away from a role to make a major career or life change, or caring for a sick family member.
Examples of voluntary turnover
Common examples of voluntary turnover include:
Retirement
An employee accepting a job at a different company
A high-performer leaving for better pay or more career opportunity
A worker relocating and not staying with the company
A new hire quitting because the role didn’t match their expectations
A new hire quitting because they didn’t like the team dynamics or culture
An employee leaving to care for a sick family member or pursue a career change
Functional vs dysfunctional voluntary turnover
Some voluntary turnover is almost impossible to prevent, such as retirement or an employee leaving to care for a sick family member. However, nearly half of all departing employees (42%) said their manager or organization could have done something to keep them from leaving, which means a major portion of voluntary turnover is preventable, but some voluntary turnover is actually healthy.
Functional turnover occurs when a low-performing or poor-fit employee decides to quit. Their departure makes room for a stronger, better-fit hire, and can ultimately lead to more organizational productivity and healthier team dynamics.
Dysfunctional turnover happens when a valuable, highly productive employee decides to leave your organization. This employee may have been a high performer or worked in a highly technical, hard-to-fill role. Dysfunctional turnover is incredibly costly, with estimates suggesting up to two times an employee’s annual salary, or more.
What is involuntary turnover?
Involuntary turnover occurs when your company initiates a separation with an employee. This could look like performance-related dismissals, layoffs, firings, or role eliminations.
Examples of involuntary turnover
Common examples of involuntary turnover include:
Role termination due to poor performance
Firing an employee due to misconduct
Layoffs due to budget cuts or restructuring
Contracts ending without renewal
Voluntary vs involuntary turnover: key differences
Voluntary and involuntary turnover both reduce headcount, but each has different root causes. Each requires a different, measured response from your HR team.
Unlike voluntary turnover, involuntary resignation isn’t typically reduced through employee engagement strategies, such as proactive changes to team dynamics or increasing compensation. It can, however, be reduced through better hiring practices, such as using pre-hire assessments to ensure frole alignmentit before making a hiring decision.
Voluntary turnover means your employees are deciding to leave. Maybe there are limited growth opportunities, or they have a poor relationship with their manager. Conducting stay and exit interviews can help you determine the root cause of employees resigning.
Side-by-side comparison
Voluntary turnover
Involuntary turnover
Definition
An employee chooses to leave the organization.
The employer ends the employee relationship.
Who initiates it
Employee
Employer
Common examples
Resignation, retirement, relocation, accepting another job, or making a career change
Layoffs, performance-related dismissals, role elimination, or termination for misconduct
Cost implications
Most costly when high performers, leaders, or workers in technical roles leave
Can be expensive when poor hiring decisions lead to repeated, chronic terminations
Prevention approach
Conduct stay and exit interviews, increase compensation, maintain healthy workloads, foster healthy team dynamics, and track and measure the impact of retention strategies.
Optimize hiring decisions for fit, potential, and healthy team dynamics
Why the distinction matters for your HR strategy
Reducing voluntary and involuntary turnover each warrants different strategies. A surge in voluntary turnover could call for better manager training, more internal mobility, or higher pay.
Conversely, high involuntary turnover could mean you need to make better, more informed hiring decisions. Or you may need more robust financial planning or more intentional performance management.
Responses must be targeted, measured, and proportional. Since the root causes are so different, it benefits your team to track each separately, including the impact of your efforts to reduce them.
Which type of turnover costs more?
Dysfunctional voluntary turnover is, by and large, the most expensive type of turnover because it means your organization is losing the employees it wants to keep most: your high-performers, key team members, and individuals with invaluable institutional knowledge.
Worse, when these high-performing employees quit, productivity stagnates, the hiring process begins anew with its associated costs, and remaining team members have to pick up the slack, eventually leading to burnout and lower morale.
In addition, your customers may be used to working with certain individuals. If that employee leaves, your clients may follow them or look elsewhere for a similar service.
Gallup estimates the cost of dysfunctional voluntary turnover to be one-half to two times an employee’s annual salary, but when you factor in indirect costs, such as lost productivity and potential impact on customers and clients, the cost can grow much, much higher.
The top four reasons employees are leaving their jobs, according to research from Gallup, are:
Engagement and culture (37%)
Well-being and work-life balance (31%)
Pay and benefits (16%)
Manager and leaders (9%)
Let’s explore each.
Culture and values misfit
Google’s ambitious Project Aristotle aimed to isolate the distinguishing factors of high-performing teams. The largest common denominator they discovered was high levels of psychological safety, which they defined as “feeling confident about admitting mistakes, asking questions, or offering new ideas.”
Healthy team dynamics, with open communication and psychological safety, are major contributors to employee well-being and satisfaction. However, when these things are missing, employees can leave because the organization or team wasn’t what they expected. The mismatch might come down to communication style, workload, team cultures, or an issue with management.
Burnout and workload imbalance
The American Psychological Association found that 77% of employees experienced work-related stress in the last month. 57% said they had negative impacts as a result, including lower productivity and a desire to quit.
When high-performing and productive employees leave, it’s often left to the remaining team members to bridge the gap, assume new responsibilities, and make up for lost productivity. At least until the role can be filled.
However, with the average role taking over sixty days to fill, that’s a long time to maintain a higher workload. This can have a compounding effect, where more work leads to increased burnout, which results in increased turnover.
Compensation and benefits misalignment
According to Gallup, compensation was the number one reason employees cited for leaving a job. Almost half (44%) of employees would consider taking another job for a pay raise of 20% or less. Given how costly it can be to replace employees, reevaluating compensation on a regular basis and ensuring competitive market rates can be a strategic and cost-effective way to keep employees from leaving.
Poor management and leadership
McKinsey discovered that the employee-manager relationship accounts for 86% of employee satisfaction. In essence, people leave managers, not companies. A huge contributor to bad management is a lack of formal training. Newly promoted individual contributors often want their team members to do work the way they always did it, which can lead to exacting standards and overcontrol — micromanagement, which is a toxic managerial trait that causes employee dissatisfaction and turnover.
Lack of career growth and development
Beyond Gallup’s top four categories, development and career growth is one of the most effective retention strategies. According to a LinkedIn Workforce Learning Report, the number-one way organizations are improving retention is by providing more learning opportunities. Investing in employees' growth, or even giving them access to a personalized development plan, can go a long way toward employee satisfaction.
How to calculate your voluntary turnover rate
While the overall turnover rate tells you how many employees left, voluntary turnover tells you how many chose to leave. Tracking voluntary turnover separately from overall turnover helps your HR teams isolate and reverse preventable exits.
Voluntary turnover rate = (Number of voluntary separations ÷ Average number of employees) x 100
For example, if 10 employees voluntarily leave during the year and your average headcount is 200 employees, your voluntary turnover rate would be :
(10 ÷ 200) x 100 = 5%
A 5% voluntary turnover rate means 5% of your workforce chose to leave during that time period, which in this case was a year.
First, you’ll want to define the time period, such as monthly, quarterly, or annually. Next, count voluntary separations during that period. Remember not to include any layoffs or terminations in your voluntary turnover number, as these are types of involuntary employee turnover.
What is a good voluntary turnover rate?
A good or healthy turnover rate depends on your industry, the type of roles affected, and the labor market. For example, while 52% of employees are actively looking for new roles, only one in three employees thinks now is a good time to find a job. That’s down from 70% in 2022
This variance means that turnover rates will fluctuate. In early 2026, the U.S. Bureau of Labor Statistics had monthly quit rates — voluntary turnover — hovering right around 2% a month, or 24% projected for the year.
But average doesn’t mean good.
As a rule of thumb, below 10% annual turnover rate is healthy. In different industries, like retail and healthcare, this “healthy” amount will be larger, usually around 15-25%. If you work in tech or professional services, aim for below 10%.
While benchmarks can provide useful context, the real goal is to understand your organization's turnover trends over time and take steps to improve retention. You’ll want to measure dysfunctional voluntary turnover (valuable employees leaving) versus functional voluntary turnover (low performers leaving), and take measurable steps toward reducing dysfunctional turnover.
How to reduce voluntary turnover
Some employees retire. Some change careers. Others have major life changes that call them away from work. While voluntary turnover isn’t always preventable, a major portion of it is. Your goal is to reduce dysfunctional voluntary turnover, the kind where key employees are leaving, those who are incredibly costly and time-consuming to replace.
So, how do you keep them?
With these employee retention strategies.
Hire for fit, not just skills — reduce voluntary turnover before day one
Wonderlic Select
The best time to prevent voluntary turnover is before your employee starts. When someone leaves because the job wasn’t what they expected, or because the work doesn’t align with how they’re motivated, that means they weren’t a good fit. Wonderlic Select assesses cognitive ability, motivation, and personality against job-specific benchmarks, giving you a clearer picture of whether a candidate will genuinely enjoy and be motivated by their job long-term.
The single best method for reducing voluntary turnover is setting yourself up for success. Hire the right person from the start. Motivation-driven, voluntary exits are a hiring problem resulting from a job mismatch that existed before the employee started.
For example, if a customer support rep is drained by interacting with others, they may quickly become burnt out and quit. Or if a leadership role requires quick pivots and thinking on your feet, but an individual thrives in structure and predictability, they may be motivated to look for another job.
With multi-measure pre-hire assessments like Wonderlic Select, you can measure personality, motivation, and cognitive ability to see whether an employee genuinely fits the role’s demands, will enjoy the day-to-day work, and will fit in with your team and culture.
Things to focus on:
Define what success actually looks like in the role before you start interviewing.
Assess motivation and personality fit alongside experience.
Use Wonderlic Select to compare candidates against job-specific benchmarks.
Give candidates a realistic preview of the day-to-day work, pace, expectations, and team environment.
Watch for mismatches between what energizes a candidate and what the role actually requires.
Align hiring managers on must-have traits, nice-to-have skills, and potential nonstarters before making an offer.
Revisit turnover patterns to identify where role fit, expectations, or culture fit may be breaking down.
Invest in employee development and growth
Wonderlic Develop
Employees who feel like they’re growing are significantly less likely to look for another job. Wonderlic Develop gives employees and managers role-specific development insights, including personalized growth plans, strength identification, and development actions tied to the actual demands of their role.
According to a survey from the American Psychological Association, 91% of employees said it was “very or somewhat important to them to have a job where they consistently have opportunities to learn.”
Employee development is the cornerstone of a successful retention strategy. When employees can see themselves growing with your organization and in their careers, they have a reason to stay. Even better, they start delivering better results. However, when they don't see a future at your organization, they may start looking elsewhere, even if they like everything else about the company.
Things to focus on:
Identify employees' natural abilities and skills with Wonderlic Develop.
Map out career paths and skill requirements for key roles.
Prioritize internal mobility and reward managers who develop talent.
Use mentorship and stretch assignments to help people build skills in context.
Revisit individual development plans (IDPs) on a regular cadence (more than just once a year).
Build stronger managers
Most managers are high-performing individual contributors who never received formal management training. Bad management is a major contributor to turnover, especially when management becomes micromanagement, a very easy trap for highly ambitious managers who want everything done “right”.
Conversely, 84% of employees who receive regular feedback from managers report being extremely or very satisfied with their relationship with their manager or supervisor. Rather than micromanagement, try fostering a coaching management style among your people leaders.
Great managerial coaching, Gallup says, “is an ongoing relationship of support and trust that emerges out of a rhythm of collaborative conversations, leading to teamwork and shared accountability.” The key theme is a supportive give-and-take relationship.
Things to focus on:
Have regular 1-1 meetings with team members.
Maintain clear feedback loops.
Set clear expectations and have fewer “fire drills.”
Recognize employees’ contributions, whether in team meetings or elsewhere.
Develop coaching skills and a supportive leadership style.
Conduct stay interviews regularly
By the time you conduct an exit interview and figure out what went wrong, it’s often too late. A candidate has already secured another job offer. A better solution is a stay interview, a proactive meeting with an employee designed to surface what’s working, what isn’t, and what might cause an employee to leave if things aren’t addressed.
These interviews don’t have to be overly formal. They can be normal conversations that take place during a regular 1-1 meeting. Just make sure to be supportive and responsive, and take their complaints to heart.
Things to focus on:
Run stay interviews regularly. Once a year may be sufficient, but for critical roles, you should conduct them at least twice a year.
Ask the same questions in your stay interviews: What do employees like best about their roles, what drains their energy, and what would make them leave?
Make sure to respond to employee feedback. These interviews can work against you if employees share meaningful feedback, and their concerns are never addressed.
Track voluntary turnover by department
Voluntary turnover may be 30% amongst the sales team, but only 10% in marketing. Trying to use blanket approaches for different departments can be counterproductive. Instead, measure turnover by department to get clearer signals of what’s working and what’s not.
The most important thing, however, is simply tracking important metrics tied to voluntary turnover so that you can gauge the effectiveness of your efforts and continue to refine your retention strategies.
Important voluntary turnover metrics you can track:
Turnover rate and cost
Dysfunctional turnover
Recognition quality/frequency
Manager effectiveness (e.g., how often they have 1-1s and what people are saying in their exit interviews)
Internal mobility and development progress
Wonderlic Product Integration
Cause of Voluntary Turnover
Why Employees Leave
Wonderlic Solution
Culture/values misfit
Employee discovers the role or culture doesn't match their motivations after joining.
Motivation & personality assessment predicts values and role fit before a hiring decision is made.
Poor fit/mismatched expectations
Job reality doesn't match candidate expectations, resulting in early voluntary exits.
Job-specific benchmarking identifies true fit before the offer.
Lack of career growth
Employees feel stagnant in their roles or careers.
Role-specific development plans give employees a clear growth path.
Poor management
Manager-employee friction drives disengagement and resignation.
Manager gains insight into team dynamics and working styles.
Burnout from workload imbalance
Previous turnover creates overload for remaining employees.
Better hiring practices reduce vacancy gaps that cause unsustainable workloads.
Frequently asked questions about voluntary and involuntary turnover
What is voluntary turnover?
Voluntary turnover occurs when an employee chooses to leave the organization of their own accord, usually through resignation, retirement, or accepting another offer. It differs from involuntary turnover, where the organization ends the employment relationship. Voluntary turnover is generally considered more preventable than involuntary turnover.
What is the difference between voluntary and involuntary turnover?
Voluntary turnover is employee-initiated (resignation, retirement). Involuntary turnover is employer-initiated (layoff, termination). For HR strategy, voluntary turnover is largely addressable through engagement, development, and culture. Involuntary turnover is often addressed through better hiring practices, performance management, and strategic workforce planning.
What causes voluntary turnover?
The most common causes of voluntary turnover include insufficient compensation, lack of career growth, poor management, burnout, and a mismatch between an employee's values and the organization's culture. Fit issues are a leading predictor of early voluntary exits.
How do you calculate voluntary turnover rate?
Voluntary Turnover Rate Calculation = (Number of voluntary separations in a period ÷ Average number of employees) × 100. For example, 10 voluntary departures from a 200-person team = 5% voluntary turnover rate. Track this separately from involuntary turnover to isolate preventable exits.
What is a good voluntary turnover rate?
Below 10% annually is healthy for most organizations. Healthcare and retail typically see higher turnover rates, with a healthy amount ranging from 15–25%. For tech and professional services, aim for below 8–10% annual turnover rates. More important than the industry benchmark, however, is tracking and improving your turnover rates over time.
What is functional vs dysfunctional turnover?
Functional turnover occurs when a low-performing or poor-fit employee leaves, often a net positive for the organization. Dysfunctional turnover occurs when a high-performing or hard-to-replace employee leaves. This is the most costly type of voluntary exit.
Is retirement considered voluntary turnover?
Yes. Retirement is generally considered voluntary turnover because the employee initiates the departure. Some HR frameworks track retirement separately from resignation-driven, voluntary turnover because the prevention strategies differ.
How can companies reduce voluntary turnover?
The most effective strategies to reduce turnover is to hire people who are aligned with both the role and your organization's values(not just skills or experience), investing in employee development and career growth, building strong manager-employee relationships, conducting regular stay interviews, and monitoring voluntary turnover by department rather than a company-wide aggregate. Addressing root causes early on, especially during the hiring stage, delivers the highest long-term ROI.
Keep your best employees
Voluntary and involuntary turnover affect your business in different ways. Voluntary turnover is employee-initiated, usually preventable, and most costly when valuable, productive employees leave. Involuntary turnover is employer-initiated and usually managed through better hiring, clearer expectations, and stronger workforce planning.
For HR teams, the goal is not to eliminate every exit. That’s not possible.
Rather, teams need to understand which departures can be prevented with better employee retention strategies, and then use the right strategies to keep those high-performers from leaving. Looking for more insights on employee turnover causes, costs, and how to reduce it? Check out this blog.
Wonderlic Select can help you identify best-fit employees during the hiring process, giving your team a data-driven edge toward selecting strong-fit candidates from the start. Wonderlic Develop gives your managers and employees personalized development plans with concrete advice and a clear path forward.
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