What Is Voluntary Turnover? Definition, Causes, and Calculation

Do you know that about 70% of employee turnovers in the US are voluntary? That means more than half of employees don’t wait to be fired—they choose to leave on their own.

Although it sounds shocking, voluntary turnover is nothing new. First proposed in 1958, the concept peaked in 2022 as the idea of work-life balance started to gain prominence after the pandemic. However, this may not always be the reason why an employee resigns from a job. Excessive voluntary exits often indicate deeper workplace issues that any organization must resolve to maintain stability and growth.

So today, let’s discuss voluntary turnover—its definition, causes, calculation, and management techniques.

What Is Voluntary Turnover?

Voluntary turnover refers to when an employee leaves a job by choice rather than being terminated by the company. There are several reasons why an employee may choose to willingly exit from an organization—to switch to a better role in a different organization, to pursue a learning opportunity, to get rid of the company’s toxic work environment, or for purely personal reasons. 

Consider this example:

Mr. X is a software engineer who worked at ABC Ltd for three years. However, he recently left the company to join a competitor offering better pay, benefits, and career growth opportunities. This is a common example of voluntary turnover, where the employee chooses to leave rather than being let go by the employer.

What Are the Main Causes of Voluntary Turnover Among Employees?

There are several reasons why an employee might seek voluntary exit from a company, such as:

Better Job Opportunities

One of the most prevalent reasons for voluntary turnover is the availability of better job opportunities. When an employee receives a job proposal from a different company that offers a higher salary, better benefits, or more attractive perks, they are highly likely to voluntarily exit from their current role.

Workplace Dissatisfaction

According to a recent survey, 54% of employees are ready to quit their jobs due to inadequate workplace conditions, like excessive workload, poor leadership, lack of communication, bias, or negative office politics. These issues hamper an employee’s morale and confidence, compelling them to seek a job elsewhere.

Career Stagnancy

Lack of recognition, skill development opportunities, and professional growth often creates a sense of dissatisfaction among employees. This makes them feel stuck in their role, due to which they often tend to quit their jobs and look for better opportunities. 

Work-Life Balance Issues

Personal Reasons

Sometimes, the reason for a voluntary employee exit stems from personal situations rather than the workplace. For instance, the employee might have to move closer to their family, pursue a career goal, or relocate to their city. In such cases, organizations cannot do much to prevent the exit.

Differences Between Voluntary and Involuntary Turnover

Traditionally, two types of turnovers exist in the corporate landscape—voluntary and involuntary. This table will give you a brief overview of their contrasts: 

Aspects	Voluntary Turnover	Involuntary Turnover
Initiator	Employees express their willingness to leave the organization	Employer decides to terminate the employee
Common reasons	Workplace issues, career progression, work-life imbalance, personal reasons, etc.	Poor performance, misconduct, layoffs, company restructuring, etc.
Control	Employees have full control over their decision to quit	Employers have full control over their decision to terminate
Exit process	Employees generally serve a notice period and transition out	May involve immediate termination or severance packages
Company perception	Tends to reflect negatively on the company as high voluntary turnover rates generally indicate workplace issues	Has no strong effect on a company’s public perception; generally viewed as a cost-cutting or performance management remedy

Why Is It Important to Track Voluntary Turnover?

Although voluntary turnover can occur due to both negative and positive reasons, tracking its frequency can help an organization in many ways. Here are five of its benefits:

Helps Identify Workplace Issues

Organizations where employees start to take exits one after another often suffer from underlying issues like toxic work culture, bias, or poor communication. Regularly tracking voluntary turnover keeps you and the management aware of these problems so they can be addressed before it’s too late. 

Boosts Employee Satisfaction

A lesser-known advantage of monitoring voluntary turnover is that it keeps you informed about the state of employee satisfaction in your company. For instance, if you notice your voluntary turnover suddenly rise over a period, it presents a great opportunity to interact with employees and understand their concerns, which can subsequently help increase their job satisfaction level.

Enhances Retention Strategies

Tracking voluntary turnover can give you deeper insights into why actually employees are suddenly leaving your organization. This can help you take preventive measures and build more strategic, employee-centric retention strategies for the future.

Controls Training Costs

Maintains Business Image

If employees take voluntary exits from an organization due to persistent workplace issues, it poses a significant threat to the company’s public perception. The only viable way you can prevent this from happening is by tracking voluntary exits and addressing the issue behind them. 

Steps to Calculate Voluntary Turnover

If you want to calculate the voluntary turnover rate of your company, use this formula:

Voluntary Turnover Rate = (Number of voluntary exits/Average number of employees) x 100

Here’s a step-by-step breakdown of how to apply this formula and ascertain the voluntary turnover rate:

Step 1: Determine the Number of Voluntary Exits

Suppose you want to ascertain the monthly voluntary turnover rate of your company. To begin with, you must find out how many employees have actually taken voluntary exits from your organization during the span of those 30 days. 

There are various ways you can do this—reviewing HR data, tracking resignation letters, monitoring HR analytics, etc.

Step 2: Calculate the Average Number of Employees

For the next part of the formula, you must figure out the average number of employees in your organization. To ascertain this figure, here’s the formula you need to apply:

Average Number of Employees = (Total number of employees at the start of the month + Total number of employees at the end of the month)/2

Note: If you’re calculating the voluntary turnover rate for a quarter or a year, determine the average number of employees for the same time period. 

Step 3: Apply the Formula

Finally, divide the two figures and multiply the result by 100 to find out your voluntary turnover rate.

Here’s a quick example:

If XYZ Ltd. had 10 voluntary resignations in a year and an average workforce of 200 employees, its annual voluntary turnover rate would be:

= (Number of voluntary exits/Average number of employees) x 100

= (10/200) x 100

= 5%

How to Manage Voluntary Turnover in Your Organization?

Managing voluntary turnover requires an immediate and proactive approach. Here are five ways you can control voluntary exits and foster stability in your organization:

Cultivate a Positive Work Environment

Believe it or not—employees deeply value a positive work culture. So, if your voluntary turnover rate is high, simply focus on developing a work environment that’s uplifting and free from any negativity. 

Encourage open communication, recognize high-performing employees, provide constructive feedback, and practice inclusivity. This will significantly help you control voluntary turnovers in your company.

Address Workload and Burnout Issues

Excessive workload causes burnout, which results in frustration, eventually compelling the employee to leave the job. So, make sure you do not burden your workforce with too much work. 

Regularly monitor workloads, encourage reasonable work hours, and provide mental health support. If the work is too much, hire more staff to manage it effectively. But do not put an excessive workload on your existing employees. It boosts the chances of voluntary exits.

Offer Competitive Compensation and Benefits

Employees often leave an organization if they feel their compensation doesn’t justify their responsibilities. So, offer competitive salaries and benefits to your employees. 

Stay updated on industry trends and include additional benefits like health insurance, retirement plans, and performance-based bonuses to make your offer more tempting. This not only improves retention but also increases employee satisfaction.

Provide Career Development Opportunities

Offer clear career paths, mentorship programs, and skill development opportunities. Such training and upskilling options help employees see a promising future with the organization. 

Hire the Right Candidates

Many times, organizations don’t pay close attention to how well their goals and values align with a potential candidate’s. If the person you hire doesn’t resonate with your company and its policies, they will eventually start to feel unsatisfied with their job despite your best efforts. So, start with recruiting the right individuals. This can help you keep voluntary exits at bay.

Conclusion

Voluntary turnover is an inevitable part of any organization. But when left unchecked, it can signal deeper workplace issues that impact productivity, morale, and reputation. Understanding its causes, tracking trends, and implementing effective retention strategies are crucial to maintaining a stable and engaged workforce.

By fostering a positive work environment, addressing employee concerns proactively, and investing in career growth, companies can reduce unnecessary turnover and build a loyal team that drives long-term success.

If you’re looking for smarter ways to track and manage workforce trends, check out PeopleStrong. It offers powerful HR solutions to help you make data-driven decisions and create a workplace where employees thrive.

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