When it comes to workforce planning, few metrics speak louder than employee turnoverāand yet, many organizations overlook the hidden cost it carries. Tracking turnover isn’t just about knowing who’s leaving; it’s about understanding the story those exits tell. Turnover reflects employee satisfaction, leadership effectiveness, hiring decisions, onboarding processes, and ultimately, your companyās culture. If youāre not calculating it, youāre not managing it.
Thereās also an important economic connection: employee turnover and unemployment often move in opposite directions, a concept known as negative correlation. Historically, when unemployment is low, turnover rises, people feel more confident jumping to better offers. When unemployment increases, turnover tends to drop, as workers are more likely to stay put. A healthy unemployment rate typically falls between 4% and 5%, which indicates a balanced labor market. But in 2025, that balance may shift. I predict that the unemployment rate will increase, especially when federal employees who accepted severance packages start to run out of those funds and begin actively re-entering the job market.
So, how do we keep track of turnover accurately? The formula is simple: take the number of employees who left during a specific period, divide it by the average number of employees during that period, and multiply by 100. Regularly calculating this number helps identify trends before they become retention issues, allowing HR leaders to intervene and improve the employee experience early on.
Understanding turnover trends can also help organizations align workforce strategies with broader economic indicators. If unemployment rises, voluntary turnover may decline, but not necessarily because employees are more satisfied. They may simply be staying out of caution. Thatās why now is the time to double down on engagement, internal mobility, and employee development.
I invite everyone, especially fellow HR prosāto start tracking the unemployment rate month by month. For some reason, I enjoy tracking numbers, and every year I memorize the unemployment rate from January to December. So far for 2025, I only need to remember that it was 4.0% in January and 4.1% in February. If you want to track along with me, check around the 7th of each monthāthatās usually when the latest unemployment rate is released. Numbers donāt lie, and they tell a powerful story when we know how to listen.
Elga Lejarza
Founder & CEO
LejarzaWorkforceSolutions
