Turnover often is classified as voluntary or involuntary.

The involuntary turnover occurs when an

employee is fired. Voluntary turnover occurs
when an employee leaves by choice and can be caused by many factors. Causes include lack of
challenge, better opportunity elsewhere, pay, supervision, geography, and pressure. Certainly, not
all turnover is negative. Some workforce losses  are quite desirable, especially if those workers who
leave are lower-performing, less reliable individuals.

MEASURING TURNOVER
The turnover rate for an organization can be computed in different ways. The following formula from
the U.S. Department of Labor is widely used. (Separation means leaving the organization.)

Number of employee separations during the month X 100

(Total number of employees at mid month)

For example, in a business with an average of 300 employees over the year, 21 of whom leave,
labour turnover is 7%. This is derived from (21/300)*100.

Facts [+]

Employee turnover is calculated by dividing the number of annual terminations by the average
number of employees in a given work force. The average employee turnover rate in the U.S. is about
12% to 15% annually. At the high end, fast food retailers experience up to 300% employee turnover.
At the low end, advanced, market leading technology companies experience turnover of less than 8%.

Internal vs. External turnover

Like recruitment, turnover can be classified as 'internal' or 'external'. Internal turnover involves
employees leaving their current positions and taking new positions within the same organization.
Both positive (such as increased morale from the change of task and supervisor) and negative [such
as project/relational disruption, or the Peter Principle (Peter Principle: Observation that in an
hierarchy people tend to rise to "their level of incompetence." Thus, as people are promoted, they
become progressively less-effective because good performance in one job does not guaranty similar
performance in another. Named after the Canadian researcher Dr. Laurence J. Peter (1910-90) who
popularized this observation in his 1969 book 'The Peter Principle.')] effects of internal turnover exist,
and therefore, it may be equally important to monitor this form of turnover as it is to monitor its
external counterpart. Internal turnover might be moderated and controlled by typical HR
mechanisms, such as an internal recruitment policy or formal succession planning.

Employee turnover is caused by external and internal factors. External influences include local
economic conditions and labor market conditions. Internal causes include such things as non-
competitive compensation, high stress, poor working conditions, monotony, sub-par supervision,
dysfunctional job fit, inadequate training, poor communications, and loose organization practices.