• Business
• October 19, 2026
• By: Sabiha
• 9 mins read

An HR director I was talking to last month opened her laptop and showed me her turnover number. 11%. “We’re half the UK average,” she said. “So we’re fine, right?”

Her average UK figure was 34%. The number she had in her spreadsheet was something quite different. She wasn’t fine & wasn’t in trouble either. She just didn’t yet know what her own number meant.

This confusion is everywhere. Google “employee turnover rate UK” and you’ll find pages quoting 34%, 35%, 15%, 16.8% and about a dozen industry splits that don’t agree with each other. Half of these numbers are describing the same workforce in different ways. The other half are quoting figures that are quietly five years old.

If you’re going to use a benchmark to make a decision about your people, you need to know which number you’re looking at, what it actually measures, and whether it has anything to do with you.

What is the average employee turnover rate in the UK?

There are two numbers in common circulation, and they measure different things. The one most widely quoted is around 34%. The one that will actually resemble your HR system’s output is substantially lower.

The 34% figure comes from CIPD analysis of the Office for National Statistics Annual Population Survey, covering January 2022 to December 2023. It describes churn across the entire UK workforce. According to the CIPD, that 34% breaks down into 27.4% of people who moved to a new employer within the year, plus 6.6% who left the workforce entirely for reasons like study, retirement, long-term sickness, or a career break.

That is a labour-market statistic. It tells you how dynamic the UK workforce is. It does not tell you what your HR system should be reporting.

Employer-reported turnover, which is what most HR teams actually calculate, sits well below that. The gap exists because an employer-reported rate only counts people who left your organisation. The APS churn figure counts movement across the whole labour market, including people who left one job and started another the same month.

When a vendor blog or a jobs-site stats page tells you “the average UK turnover rate is 34%”, they are almost always quoting the APS figure as though it were an employer benchmark. It isn’t.

How do you calculate employee turnover rate?

The simplest, most widely used formula is: leavers in the period, divided by average headcount during the period, multiplied by 100.

For a 12-month calculation:

• Numerator: total leavers between 1 January and 31 December
• Denominator: average of your headcount at the start of the year and at the end of the year
• Multiply the result by 100 to get a percentage

A worked example. You run a 120-person SME. On 1 January you had 115 employees. On 31 December you had 128. During the year, 19 people left.

Average headcount: (115 + 128) / 2 = 121.5

Turnover rate: (19 / 121.5) × 100 = 15.6%

Three things trip people up here.

First, mid-year joiners inflate the denominator if you use a simple average and your headcount grew sharply. If you’ve scaled from 60 to 120 in 12 months, a monthly average of headcount gives you a more honest denominator than a start-and-end average.

Second, people confuse turnover with attrition. Turnover is everyone who left. Attrition is specifically the leavers you didn’t replace, because the role was closed. If a leaver is backfilled, that’s turnover but not attrition. If a role is deleted after the leaver walks, that’s both.

Third, voluntary and involuntary leavers get bundled together, and they shouldn’t be. Someone who resigned to join a competitor is a very different signal from someone you let go for performance. Many SMEs report a single blended rate and lose the ability to interpret it. Split them from day one, even if the sample size is small.

What is a good employee turnover rate for a UK SME?

The answer depends almost entirely on your industry. Comparing a raw percentage to a single UK-wide average is the wrong exercise.

CIPD’s industry breakdown from the Annual Population Survey, covering 2022 to 2023, puts churn rates across sectors in a wide band. The two anchor points, both drawn directly from the CIPD benchmarking page, are:

Sector	APS churn rate	Source (fieldwork period)
UK average (all workers)	34%	CIPD, ONS Annual Population Survey (Jan 2022 – Dec 2023)
Hospitality (accommodation & food services)	~52%	CIPD, ONS Annual Population Survey (Jan 2022 – Dec 2023)
Public administration & defence	~25%	CIPD, ONS Annual Population Survey (Jan 2022 – Dec 2023)

A note on these figures. They are APS-derived, so they describe labour-market churn in each sector, not what a given employer’s HR system will report. Employer-reported figures sit substantially lower. Detailed, employer-reported industry turnover is not published annually in the UK, so pages quoting precise 2026 sector figures are almost always recycling 2022 to 2023 data. Treat these as directional, not exact.

The useful move is to halve or two-thirds these APS figures for a rough employer-side comparator, and then layer on three more questions:

1. How old is the data? CIPD publishes this APS analysis every few years. If a page gives you a “2026 benchmark” with precision to one decimal place, check what year the underlying survey was fielded. Often it’s three or four years old.
2. How does your own trend read? Your turnover last year versus this year, calculated the same way, is more useful than any national figure. If you’ve gone from 14% to 22% in 12 months, the direction matters more than the comparator.
3. Where in your business is the churn concentrated? A business with 15% total turnover where almost all of it is from one team isn’t the same business as one with 15% distributed across every function. The headline rate hides where the problem is.

Hospitality and retail will always run higher than financial services. That isn’t a failure. It’s structural. A 25% turnover rate is excellent for a bar group and a crisis for an accountancy practice. The benchmark that matters isn’t national, it’s “similar businesses, same size, same roles, same labour market”.

For the current state of your own hiring cycle, the companion piece is on staff churn and how to break the hiring cycle.

What’s driving UK turnover in 2026?

The headline conditions are: hiring is cautious, retention is harder than last year, and employers are spending more to replace people who leave.

The latest CIPD Resourcing and Talent Planning Report, published 22 September 2026 with fieldwork between 2 April and 2 May 2026 across 1,014 UK employers, found 44% saying talent had become harder to retain. 52% said competition for well-qualified talent had increased over the past year. 48% increased their efforts to develop talent in-house.

The ONS September 2026 labour market release put UK vacancies at 702,000 for June to August 2026, down 8,000 on the prior quarter and below pre-pandemic levels. Unemployment edged up to 4.9% in the May to July period.

That combination matters. In a cooling market, employer-reported turnover often falls, because people are slower to quit when fewer roles are advertised. If your rate drops this year, don’t celebrate automatically. Check whether it’s dropped because people are happier, or because they’re stuck.

A good hire costs 1.5 to 3 times annual salary to replace, depending on seniority and specialism. Even at the lower end, every point of avoidable turnover is a six-figure line item for a mid-size SME. The pound value of fixing retention is almost always higher than the pound value of hiring faster.

What should you do with your turnover number?

Measure it properly, split it by segment, and move from counting leavers to predicting them.

Four actions, in order:

1. Agree your definitions. Write down what counts as a leaver, what period you measure, and whether contractors are in or out. Keep it consistent, so year-on-year comparisons mean something.
2. Split the rate. Voluntary versus involuntary. Regretted versus not. New hire (under 12 months) versus established. By team, by manager, by location. The headline number is almost never the useful one.
3. Check your tenure curve. The CIPD data shows that the most common UK tenure band is two to five years. If a disproportionate share of your leavers go in year one, that’s an onboarding and new-hire attrition problem, not a general retention problem, and the fix is quite different.
4. Move from measurement to prediction. A turnover rate is a backward-looking metric. By the time someone shows up in it, they’re gone. The useful next step is building the signals that let you spot a resignation three months out. That’s where predicting employee turnover using AI pattern recognition starts to pay back.

Benchmarks are useful for sense-checking. They are not a diagnosis. The UK’s 34% figure is a labour-market statistic, not a target. Your own number, split properly and tracked honestly, will tell you more in one quarter than any national benchmark will in a decade.

FAQs

About Sabiha Sabiha is Director of Talent Acquisition at Get Sponsored Job, with 16+ years of international hiring experience across the UK, Dubai, South Africa and Malaysia. She was shortlisted for Best Career Coach UK by the Career Development Institute. Her book How to Use AI to Win Talent and Retain People is published by Trotman in Autumn 2026 and is CIPD-aligned. She advises UK SMEs on AI-enabled hiring and retention systems.