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Turnover and attrition

What is employee churn?

Definition

Employee churn is an informal synonym for employee turnover, borrowed from subscription metrics where churn means customers lost.

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Employee churn is another word for employee turnover.

It means people leaving the company over a period. You will also see staff churn, people churn and workforce churn. The word comes from subscription businesses, where churn is the share of customers who cancel.

Other words for the same idea are employee turnover, staff turnover and labour turnover. Attrition is close but, strictly, means leavers whose roles are not refilled.

Churn, turnover and attrition overlap but are not identical.

  • Employee churn: an informal synonym for turnover, borrowed from subscription metrics.
  • Employee turnover: the formal HR term for people leaving and being replaced.
  • Attrition: in the strict sense, people leaving whose roles are not backfilled.

If someone asks for your churn rate, they almost always mean your turnover rate. Confirm which leavers they want counted before you send a number.

These are the other words for employee churn and its opposite.

  • Employee turnover: the standard term in the US.
  • Staff turnover and labour turnover: the same measure in the UK and the Commonwealth.
  • Attrition: used loosely as a synonym, and strictly for roles that are not refilled.
  • Separations: the count of exits that every one of these rates is built from.

The opposite of churn is employee retention, the people who stay. The two are measured differently, so the retention rate is not simply 100 minus the churn rate.

The word churn brings an assumption from the customer side.

The borrowed word carries a borrowed assumption. Customer churn is largely a pricing and product story, people churn is mostly a manager, growth and workload story, so the playbooks do not transfer.

In a subscription business, a price cut or a better feature can win back customers in bulk. People rarely leave over one fixable thing. A strained manager relationship, a stalled path or a workload that never eases builds over months, which is why the useful response is a conversation with the person rather than a company-wide offer.

The employee churn rate uses the turnover formula.

Formula

Employee churn rate = leavers ÷ average headcount × 100

Average headcount is the headcount at the start of the period plus the headcount at the end, divided by two. A monthly churn rate multiplied by 12 gives an annualized figure.

Here is a worked example with round numbers.

Take an invented startup with 80 people on 1 January and 100 on 31 December. During the year 9 people left.

Average headcount is (80 + 100) ÷ 2 = 90, so the employee churn rate for the year is 9 ÷ 90 × 100 = 10%.

These are the common mistakes with employee churn.

  • Borrowing customer-churn fixes, such as blanket perks, for a problem that usually sits with individual managers.
  • Reporting one churn number without splitting voluntary from involuntary exits.
  • Calling it churn in one report and attrition in the next, with different leavers counted each time.
  • Treating all churn as bad. Some exits are functional and leave the team better off.

Work out your own churn rate.

The free turnover rate calculator runs the same formula. Enter your headcount at the start and end of the period and your leavers, and it shows the annualized figure.

Calculate your churn rate

Free, no signup required.

These related terms are in the glossary too.

  • Employee turnover

    Employee turnover is the movement of people out of a company over a set period, counted as the employees who leave and are replaced.

  • Staff turnover

    Staff turnover is the same measure as employee turnover, and is the more common phrasing in the UK, Ireland, India, Australia and much of the Commonwealth.

  • Attrition

    Attrition is headcount lost when employees leave and the role is not backfilled, so the position disappears from the org chart.

  • Turnover rate

    The turnover rate is the percentage of your workforce that left during a period.

  • Voluntary turnover

    Voluntary turnover is a departure the employee chose: a resignation, a retirement, or a move to another employer.

  • Functional turnover

    Functional turnover is a departure that leaves the organization better off, typically a low performer or a poor culture fit choosing to move on.

These pages on this site go deeper.

Back to the HR glossary, where all 52 terms are defined.