Employee Turnover Statistics (2026): Costs, Causes & Industry Benchmarks

The State of Employee Turnover in 2026

The broad national numbers tell a story of turnover that has cooled from its post-pandemic peak but is still elevated in the industries that rely most heavily on hourly labor. According to the BLS Job Openings and Labor Turnover Survey (JOLTS), the U.S. quits rate held at 1.9% with total separations at 3.2% in the most recent monthly release, reflecting roughly 3.1 million quits and 5.1 million total separations across the economy that month.

Zooming out to annual figures, Mercer's 2025 US Turnover Survey of 2,617 organizations found average voluntary turnover of 13% for the year — down from 13.5% in 2024 and 17.3% in 2023, suggesting the labor market has settled compared to the churn of 2022-2023. Still, a 13% average masks enormous variation: some sectors run near 8%, while others sit above 50%, which is why industry-specific benchmarking matters more than a single national number.

The Real Cost of Turnover — and of a Bad Hire

Turnover costs money regardless of why an employee leaves, but the math gets worse when the departure follows a hiring mistake rather than a healthy career move. Gallup estimates that replacing an individual employee costs anywhere from one-half to two times their annual salary — a figure Gallup itself calls conservative — and that voluntary turnover costs U.S. businesses roughly $1 trillion per year in aggregate.

Those figures cover a competent hire who simply didn't stay. A bad hire — someone who shouldn't have been hired in the first place — costs more on top of that. A commonly cited U.S. Department of Labor benchmark puts the minimum cost of a bad hire at roughly 30% of that employee's first-year earnings, and that's before factoring in lost productivity, team disruption, or management time.

The Work Institute breaks that 33.3% figure down further: roughly 11% of salary covers direct replacement costs (recruiting, onboarding, temporary coverage), while the remaining 22% is indirect — lost productivity, strained team dynamics, and manager time — costs that rarely show up on a line item but hit the bottom line just as hard.

• 43% of employers say a poor hiring decision resulted from rushing to fill an open position (SHRM/CareerBuilder)
• 22% cite a lack of effective interviewing and hiring skills as a factor in bad hires
• Organizations without a standardized interview process are roughly 5 times more likely to make a bad hire than those with formal procedures (SHRM)

Voluntary vs. Involuntary Turnover

Not all turnover is created equal from a risk standpoint. Voluntary turnover — employees who quit — is what most retention programs target, while involuntary turnover (layoffs, discharges, terminations) is often a signal that something went wrong upstream in hiring or performance management. BLS JOLTS separates these categories monthly, and the ratio between them is a useful early-warning indicator: a rising discharge rate relative to quits can point to a growing number of hiring mismatches working their way out of the organization.

This is where the Work Institute's research is most striking for employers focused on prevention rather than just measurement: in its 2025 Retention Report, the Work Institute estimates that 75% of voluntary employee exits are preventable. That doesn't mean every one of those departures traces back to a hiring decision — but it does mean the large majority of turnover isn't an unavoidable cost of doing business. A meaningful share is downstream of decisions made during hiring: who was screened, what was verified, and whether the role and candidate were actually a fit.

Turnover by Industry: Retail and Hospitality vs. Professional Services

Industry is the single biggest driver of turnover-rate variation. Compiled annual turnover research from Insignia Resource, built on BLS, Mercer, and Gallup data, shows accommodation and food services and retail running far above the national average, while professional and business services track much closer to it.

Mercer's 2025 US Turnover Survey, which measures voluntary turnover specifically rather than total separations, tells a directionally similar story using its own methodology: retail and wholesale posted the highest voluntary turnover of any sector surveyed at 26.7%, while insurance had the lowest at just 8.2%, against a 13% all-industry average. The gap between customer-facing, hourly-wage sectors and stable, salaried sectors shows up consistently no matter which dataset you use — only the exact percentages shift with methodology.

First-Year Turnover: The Costliest Kind

Turnover in an employee's first year is particularly expensive because the organization has already absorbed the full cost of recruiting and onboarding without recouping any of the productivity a tenured employee would eventually deliver. HRBench's 2025 new-hire turnover benchmark data puts the median 1-year new-hire turnover rate at 8.98%, with organizations in the 25th percentile at 4.96% and those in the 75th percentile at 13.55% — a wide spread that suggests hiring and onboarding practices, not just industry, are doing a lot of the work.

The gap between the best- and worst-performing quartiles is exactly where hiring quality tends to show up: organizations that screen and vet candidates carefully before an offer goes out are working from a smaller pool of downstream surprises than those that hire quickly and sort out fit later.

What This Means for Your Hiring Program

Put these numbers together and a pattern emerges: turnover is expensive, a meaningful share of it is preventable, and a disproportionate amount of both cost and preventability traces back to who gets hired in the first place. When 75% of voluntary exits are considered preventable and roughly three-quarters of employers admit to having made a bad hire, the highest-leverage fix isn't a better exit interview — it's a better decision at the point of hire.

That's the gap pre-employment screening is built to close. Verifying a candidate's background, employment history, and criminal record before they start — rather than discovering a mismatch three months into a costly first-year turnover statistic — is one of the more direct ways employers can reduce the hiring mistakes that feed turnover cost. PreHireBadge runs FCRA-compliant pre-employment background checks for $5 per check with no monthly subscription fees, so screening every candidate thoroughly no longer competes with the budget pressure that leads to the rushed hiring decisions cited above as a top driver of bad hires.

None of this means screening eliminates turnover — plenty of departures have nothing to do with a hiring mistake. But for the share of turnover that is preventable, closing information gaps before an offer is extended is a lower-cost intervention than absorbing the replacement cost after the fact.