Employee Retention vs Turnover: What’s the Difference and Why It Matters

High-performing organisations know that understanding their workforce goes beyond surface-level metrics. It’s not just about how many people are leaving — it’s also about why others choose to stay. In today’s dynamic work environment, the ability to clearly distinguish between retention vs turnover can determine whether a company thrives or constantly plays catch-up.

According to a 2022 report by the Society for Human Resource Management (SHRM), the average cost of replacing an employee can amount to six to nine months of that employee’s salary, highlighting just how financially damaging high turnover can be. But simply holding on to employees isn’t enough — organisations must also ensure those who stay are engaged, motivated, and growing in their roles.

In this guide, we’ll break down the difference between turnover and retention, explore why each metric matters, and show you how to measure, interpret, and act on them effectively. Whether you’re looking to reduce churn, improve culture, or create sustainable growth, understanding both sides of the equation is key.

And if you want to dig deeper into your own organisation’s employee experience, platforms like HeartCount offer real-time engagement and retention insights that help you move from reactive fixes to proactive strategy.

Let’s start by clarifying the core definitions — and why they’re often confused.

Retention vs Turnover: A Clear Comparison

Understanding the distinction between retention vs turnover is essential for organisations aiming to build a stable, motivated workforce. Though the two terms are often mentioned in the same breath, they measure very different outcomes — and require very different strategies.

Let’s break them down one by one to clarify what each metric tells you about your employees, and why comparing them side by side offers a more complete picture of your workforce dynamics.

What Is Employee Retention?

Employee retention refers to an organisation’s ability to keep its employees over a given period. High retention usually indicates that people are satisfied with their roles, leadership, and overall experience at work.

Retention focuses on:

• Who stays
• Why they stay
• What keeps them engaged

Retention is typically driven by factors like recognition, development opportunities, job satisfaction, and company culture. Tools like HeartCount help teams stay ahead by measuring engagement in real time and identifying early signals of disengagement — a key to improving retention.

What Is Employee Turnover?

Employee turnover, on the other hand, tracks how many employees leave an organisation — either voluntarily (quitting, retiring) or involuntarily (layoffs, dismissals) — within a specific timeframe.

Turnover focuses on:

• Who leaves
• Why they leave
• How fast they’re leaving

High turnover may suggest deeper issues, such as burnout, toxic management, or poor cultural alignment. It’s crucial to understand what’s behind these exits.

What’s the Core Difference?

The core difference between turnover and retention lies in what they measure:

• Retention is about maintaining talent.
• Turnover is about losing talent.

Both metrics offer insight into workforce health, but they’re not simply opposites — high retention doesn’t always mean low turnover, and vice versa. That’s why comparing both together offers more actionable intelligence.

Visual Comparison: Employee Retention vs Turnover (Table)

Here’s a quick-glance summary of how these two metrics differ:

Aspect	Employee Retention	Employee Turnover
Definition	Measures how many employees stay	Measures how many employees leave
Focus	Stability, engagement, loyalty	Attrition, exit reasons, workforce loss
Primary Metric	Retention rate	Turnover rate
Ownership	HR, leadership, employee experience	HR, team leads, culture & ops
Common Use Case	Planning development and engagement	Identifying problem areas and trends
Goal	Improve satisfaction and reduce exits	Address root causes of attrition

Why Understanding the Difference Matters

While employee turnover and retention are connected, treating them as interchangeable can lead to blind spots in your HR strategy. Knowing when to focus on one over the other helps you make smarter decisions, target the right improvements, and avoid unnecessary spending.

What Employee Retention Is Best Used For

Retention metrics are most useful when assessing how well your organisation nurtures talent. A high retention rate often signals a healthy work culture, strong leadership, and engaged employees who see a future at the company.

You’ll want to focus on retention when:

• Planning for long-term talent development
• Evaluating employee engagement and loyalty
• Measuring the impact of recognition programs and benefits
• Creating strategies for career progression

For retention strategies that actually move the needle, check out HeartCount’s guide to employee engagement and retention.

What Employee Turnover Is Best Used For

Turnover data is more useful when diagnosing what’s going wrong — especially when departures are frequent, clustered in certain teams, or driven by poor management.

You’ll want to focus on turnover when:

• Spotting toxic leadership or cultural red flags
• Understanding exit patterns across departments
• Tracking the cost and risk of replacing lost talent
• Evaluating hiring effectiveness and onboarding experience

How Each Impacts Business Performance

Failing to address either metric can lead to serious consequences:

• High turnover → lost productivity, damaged morale, increased recruitment costs
• Low retention → missed opportunities for internal growth, lack of innovation, weaker team cohesion

Together, retention vs turnover metrics offer a powerful way to forecast future performance and address risks before they grow. As explained in this post on the ROI of engagement, businesses that track both are better equipped to act decisively and build resilient teams.

Different Metrics → Different Strategies

You can’t apply the same solution to both problems. While a retention-focused strategy might prioritise mentorship or recognition, a turnover-focused approach may require exit interviews, management reshuffles, or even compensation restructuring.

By clearly understanding the difference between turnover and retention, HR leaders can allocate resources more effectively, create better policies, and build a healthier work environment overall.

Retention Rate vs Turnover Rate: How to Measure Each

To truly understand your workforce dynamics, it’s not enough to look at raw exit numbers or tenure alone. You need to know how to measure both retention and turnover rates — and more importantly, when to use which one.

Employee Retention Rate Formula

The retention rate shows what percentage of employees stayed during a specific period. Here’s the standard formula:

Retention Rate (%) = (Number of employees at end of period ÷ Number at start of period) × 100

For example, if you had 100 employees at the start of the year and 85 of them are still with you at the end, your retention rate is:

(85 ÷ 100) × 100 = 85%

This number helps you track how well your organisation maintains stability over time — particularly when used alongside data from employee engagement surveys.

Turnover Rate Formula

The turnover rate calculates how many employees left during a time period, relative to the average workforce size:

Turnover Rate (%) = (Number of separations during period ÷ Average number of employees) × 100

Let’s say 15 employees left during the year and your average workforce was 100:

(15 ÷ 100) × 100 = 15% turnover rate

It’s important to track both voluntary and involuntary turnover separately to identify patterns more clearly — as explained in HeartCount’s guide to what employee turnover really means.

Example Calculations & Benchmarks

Here’s how both rates might look side by side in a company of 100 people:

Metric	Value	Notes
Retention Rate	85%	85 employees remained
Turnover Rate	15%	15 employees left
Industry Benchmark	Varies	Tech: often 10–20% turnover; Healthcare: 17%+

You can also use tools like HeartCount to automate tracking and receive benchmark insights based on your industry and company size.

When to Track Which Metric

Use retention rate when you want to:

• Measure the success of engagement or recognition efforts
• Monitor how well you’re supporting long-term employee growth

Use turnover rate when you want to:

• Flag possible leadership or cultural issues
• Estimate hiring needs or recruitment costs

In short, retention vs turnover metrics aren’t competing — they’re complementary. Both offer different lenses into your people strategy, and both deserve attention.

Common Causes of Turnover vs Retention Risks

Understanding why people leave — and why they stay — is the key to designing better employee experiences. Although employee turnover and retention are related, the drivers behind them often differ. Here’s how to recognise the early signs and respond with purpose.

Why Employees Leave (Voluntary Turnover)

Voluntary turnover often stems from preventable causes. These include:

• Lack of career advancement opportunities
• Poor manager relationships
• Burnout and work-life imbalance
• Inadequate compensation or benefits
• Weak company culture

Employees don’t just leave companies — they leave experiences. That’s why reducing turnover is about more than patching holes; it’s about solving systemic issues. 

Warning Signs of Low Retention

Just because people aren’t quitting (yet) doesn’t mean they’re planning to stay. Early signs of low retention include:

• Disengagement or presenteeism
• Quiet quitting or minimal effort
• Decreased participation in team culture
• Stagnant performance and missed development goals

If you’re noticing these trends, it’s time to act. Use feedback techniques and real-time engagement tools to uncover what employees really need before they mentally check out.

Are Retention and Turnover Always Opposites?

Not always — and that’s a critical insight. A company can have:

• High retention and high turnover at the same time if long-term employees are staying, but short-term hires keep cycling out.
• Low turnover but low retention, which might suggest people are only staying due to lack of alternatives, not because they’re engaged.

This is why it’s crucial to look at both metrics together. Focusing on only one may hide deeper problems. For example, a 90% retention rate looks great — unless your 10% turnover includes all your top performers.

Who Owns Retention and Turnover in Your Organization?

Both retention turnover outcomes reflect the organisation’s environment, but ownership isn’t always clear. Is it HR’s job? Leadership’s? Managers’? The answer is: all of the above.

According to a McKinsey study on attrition and retention, the most common reasons employees leave — lack of recognition, poor leadership, and feeling undervalued — are directly tied to how different layers of the organisation interact with their teams. This makes accountability for both employee turnover and retention a shared responsibility across roles.

HR’s Role in Shaping Retention

HR teams are key architects of employee experience. They design systems, policies, and engagement frameworks that:

• Support wellbeing and development
• Monitor and report on retention vs turnover trends
• Facilitate onboarding, surveys, and stay interviews

HR can also introduce tools like HeartCount to gather data on how people feel about their work in real time — allowing proactive responses before employees disengage or leave.

Manager Impact on Team Turnover

People often leave managers, not jobs. A disengaged or untrained manager can drive high turnover faster than any policy. Key areas of manager influence include:

• Communication and recognition
• Goal clarity and support
• Feedback delivery and listening skills

Regular manager training, supported by tools like employee feedback frameworks, is essential to maintaining healthy teams and reducing regrettable exits.

How Survey Tools Like HeartCount Help Predict Issues

You can’t fix what you don’t see. Platforms like HeartCount’s automated surveys and dashboards allow teams to track sentiment shifts and engagement dips before they lead to turnover. These insights help pinpoint:

• Which departments are at risk
• What initiatives are working
• Where to focus leadership attention

By sharing this data transparently across the org, you create a culture of shared responsibility — not blame — around employee turnover and retention.

Improve Both Retention and Turnover by Targeting the Right One

One of the most common mistakes companies make is treating retention vs turnover as the same issue — and trying to fix both with a single strategy. But these are different metrics with different root causes. Knowing which one to focus on can make the difference between a successful people strategy and wasted resources.

Why You Shouldn’t Treat Retention and Turnover as the Same Metric

While they’re closely related, retention and turnover tell opposite stories. Retention is about the presence of loyalty, while turnover is about the absence of satisfaction. And they require tailored solutions:

• High turnover? You need to diagnose exit causes and stop the bleeding.
• Low retention? You need to invest in culture, recognition, and growth.

Using tools that clarify both — like HeartCount’s engagement and survey insights — can help HR and leadership target the right pain points at the right time.

Explore Retention Strategies to Keep Your Top Talent

If your goal is to create a workplace where people want to stay — not just one they tolerate — then your focus should be on strengthening employee retention. This means investing in long-term motivators like a culture of appreciation, clear career paths, and meaningful feedback.

Building a foundation of loyalty requires more than perks or surface-level benefits. According to HeartCount’s guide to employee retention strategies, companies that succeed in retaining top performers often prioritise development opportunities, personalised recognition, and continuous engagement efforts that go beyond the annual review.

These aren’t one-off initiatives — they’re embedded into daily leadership and HR practices.

Learn How to Reduce Turnover by Addressing Root Causes

On the other hand, if you’re seeing an increase in voluntary exits — especially among new hires or specific departments — it’s time to zoom in on your turnover metrics. Turnover isn’t just a number; it’s a reflection of dissatisfaction, disengagement, or disconnect.

To tackle this, you’ll need to analyse the data behind departures. Are people citing poor onboarding? Is compensation misaligned with expectations? Are certain managers struggling to support their teams?

HeartCount’s blog on reducing high turnover rates outlines actionable steps to uncover and correct these issues — from identifying red flags in exit interviews to spotting patterns in engagement data before they turn into resignations.

FAQ: Understanding Retention vs Turnover

Is turnover the same as retention?

Turnover and retention are often discussed together, but they measure opposite aspects of employee movement. Turnover refers to how many employees leave an organisation during a given timeframe, while retention refers to how many stay. Although they are connected, they are not the same and should be evaluated separately.

Is turnover the inverse of retention?

While they may appear to be opposites, turnover and retention are not exact inverses. For example, an organisation can experience high retention in one department and high turnover in another, especially during periods of rapid growth or restructuring. This is why it’s important to evaluate each metric on its own and not assume that one fully explains the other.

What is the difference between employee turnover and retention?

The main difference between employee turnover and retention lies in what each metric reveals. Turnover focuses on exits — it helps uncover why employees are leaving and whether those departures are voluntary or involuntary. Retention, on the other hand, focuses on continuity and measures how successful an organisation is at keeping its workforce engaged and committed over time.

How do you calculate retention and turnover rates?

Retention rate is typically calculated by dividing the number of employees who remain at the end of a given period by the number at the start of that period, then multiplying by 100. Turnover rate is calculated by dividing the number of employees who left during that period by the average number of employees, also multiplied by 100. These calculations help quantify workforce stability and flag potential issues within departments or roles.

Can a company have high retention and high turnover?

Yes, it is entirely possible. A company might retain its long-standing employees while simultaneously experiencing high turnover among new hires or specific teams. This usually indicates deeper organisational challenges such as onboarding gaps, poor fit in recruitment, or management inconsistencies that need to be addressed on a more granular level.

Can you improve retention without lowering turnover?

Improving retention and reducing turnover often go hand in hand, but not always. Some level of turnover — especially when it involves poor fits or underperformers — can be healthy. It is possible to improve retention by focusing on keeping your most valuable people engaged, even if some turnover continues in other areas. The key is to understand what kind of turnover is happening and whether it aligns with your broader workforce strategy.