What is Involuntary Turnover?

Involuntary turnover occurs when an employer chooses to terminate an employee. For example, involuntary turnover may happen when an employee’s conduct or performance fails to meet their employer’s expectations. This is commonly known as firing an employee. Involuntary turnover also includes employees terminated due to layoffs. 

It is important to understand the rate of involuntary turnover in your business. This data can be used to identify weaknesses in recruiting, employee experience, or business planning. Correcting these weaknesses can modify involuntary turnover rates in the future.

Involuntary or Voluntary Turnover

Whether turnover is voluntary or involuntary depends on whether the turnover was the employee’s choice. Employees who resign or retire are considered voluntary turnover because they’ve made the choice to leave. By contrast, when an employer fires or lays off an employee, this is involuntary turnover.  

When Involuntary Turnover Occurs

Involuntary turnover occurs due to an employee’s failure to perform or behave as expected, or due to business restructuring. 

Performance failure

An employee may be subject to involuntary turnover when they are unable to perform their role appropriately. This may involve consistently delivering poor quality work, failing to work well with managers, or an inability to suitably manage their own team of employees. Typically, performance shortcomings will be discussed with the employee and they will be given an opportunity to improve. Expectations for improvement can also be formalized with a performance improvement plan (PIP). Involuntary turnover may still follow these opportunities if an employee’s performance does not improve.

Conduct in violation of policy

Companies should have policies in place that lay out the conduct that is expected of employees, as well as the behaviour and actions that can lead to discipline or termination. Violating these policies typically can lead to involuntary turnover:

• Discrimination, harassment or bullying 
• Irregular attendance or tardiness
• Theft
• Damage to or improper use of company property
• Drug or alcohol use impacting work

Layoffs

Sometimes it is necessary to let go of employees who have met performance and conduct expectations. This can happen when business has taken a downturn to the point that the company cannot support all of its employees. 

In this case, company leaders will often restructure the workforce to better meet business needs. This usually means layoffs or furloughs will be applied. A layoff means that the impacted employee will no longer be employed and is therefore considered involuntary turnover. A furloughed employee will be asked to be away from work unpaid for a temporary period. Importantly, a furloughed employee does not fully lose their job and is therefore not considered part of involuntary turnover. If a furloughed employee chooses to leave rather than accept the furlough in their role, that is voluntary turnover. 

How To Determine the Rate of Involuntary Turnover

The rate of involuntary turnover is usually calculated as a percentage per year. To calculate this, divide the number of employees involuntarily terminated in the past year by the average number of total employees at the company in the past year. Then multiply that figure by 100 to express the total as a percentage.

Example

The company has an average total of 500 employees. In the past year, 60 employees were subject to involuntary turnover.

60 involuntary turnover employees / 500 total employees = 0.12

0.12 x 100 = 12%

The company had a 12% rate of involuntary turnover for the year. 

How To Use Involuntary Turnover Rate Data

Comparing your company’s involuntary turnover rate against competitors or industry averages will help you determine whether you need to take steps to address involuntary turnover. The U.S. Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey provides a helpful place to start gathering comparative data.

Once you have researched how your company’s involuntary turnover rate compares to others, you may need to take steps to increase or decrease your company’s rate.  

Ways To Increase or Decrease Involuntary Turnover

Recruiting

A high rate of involuntary turnover can often be traced back to poor decisions at the recruitment and hiring stages. Consider whether job descriptions accurately reflect the knowledge and skills necessary to succeed in each role. Additionally, make sure that company policies and expectations are clear to candidates before they join. For instance, if your company is hiring for a driving role that will be subject to random drug screening, that should be disclosed prior to hire. Clear communication in recruitment increases the odds that your company’s hires will be a good fit for their role and understand what is expected of them. Fixing any issues in your recruitment process can help decrease involuntary turnover.

Onboarding 

Once an employee joins the company, effective onboarding will ensure that they understand what is expected of them. This is a good time to acquaint the new employee with company policies and culture expectations. At a minimum, plan to give each new employee a handbook or policy manual as well as HR contact information in case they have questions. Clear communication at this stage helps to decrease involuntary turnover by ensuring employees know what they need to do to continue employment. 

Clear policy and HR support

Clear employment policies and HR support are key to either decreasing or increasing involuntary turnover. If your company’s involuntary turnover rate is high, it may be that employees are unclear on the company’s expectations. Policies are communication tools that help make expectations clear. HR support is key to ensuring that employee questions on policy get answered and that any changes in policy are explained.

On the other hand, if you find that your involuntary turnover rate is quite low, it could be that managers aren’t dealing with problem employees because they aren’t clear on when performance or conduct should result in termination. This is another reason to make sure policies are clearly written and communicated, particularly those that spell out disciplinary and termination processes. 

Mentoring and community building

Building a strong employee community can help decrease involuntary turnover by encouraging employees to support each other’s performance. One way to build employee community is to establish a mentoring program. These programs help to expand networks and provide career guidance to employees. 

Business planning

Finally, business planning is a necessary part of forecasting how many employees a business needs. While layoffs are not always avoidable, effective planning can help a company lessen this form of involuntary turnover by identifying the optimal numbers of staff in each position.

Conclusion

Involuntary turnover is a normal part of business. However, having an excessively high or low rate of involuntary turnover can indicate problems with how your company is managing and communicating with your employees. You can measure your company’s rate of involuntary turnover and use that data to identify areas for policy, program or communication improvement.