Run it with less chaos · Every business
Turnover Rates by Industry, and What Each Departure Costs
Federal turnover data show how many people leave jobs in each industry every year, and a review of replacement costs turns that rate into a dollar figure an owner can check against their own payroll.
At a glance
- In 2025, U.S. private employers lost an average of 3.6% of their workforce each month to quits, layoffs and other separations, the equivalent of about 43% over a year, according to the Bureau of Labor Statistics.
- Service industries run higher: about 73% a year in arts, entertainment and recreation, which includes gyms and studios, and about 66% in accommodation and food services.
- At a typical replacement cost of 20% of annual pay, a ten-person business in "other services," the category that holds salons and repair shops, spends about $30,000 a year on turnover.
The number and where it comes from
The Bureau of Labor Statistics measures turnover through the Job Openings and Labor Turnover Survey, known as JOLTS, which asks a national sample of employers each month how many people they hired and how many left. BLS publishes annual averages of the monthly rates, defined as the sum of the year's 12 monthly separations divided by the sum of the 12 monthly employment counts, so multiplying the monthly average by 12 gives the share of an average year's workforce that left during the year.
Separations include three kinds of departure, and owners usually feel the first most sharply: quits, which are people choosing to leave; layoffs and discharges; and other separations such as retirements. Across all employers in 2025, quits made up 60.6% of the 62.8 million separations BLS counted, and in leisure and hospitality the share was about 70%.
| Industry | Monthly separations rate | Annual equivalent | Annual quits equivalent |
|---|---|---|---|
| Arts, entertainment and recreation | 6.1% | 73% | 26% |
| Leisure and hospitality (all) | 5.6% | 67% | 47% |
| Accommodation and food services | 5.5% | 66% | 50% |
| Professional and business services | 4.6% | 55% | 28% |
| Construction | 4.0% | 48% | 22% |
| Retail trade | 3.8% | 46% | 31% |
| Other services | 3.3% | 40% | 26% |
| Health care and social assistance | 2.9% | 35% | 24% |
| Real estate and rental and leasing | 2.6% | 31% | 19% |
| Finance and insurance | 2.1% | 25% | 16% |
| All private employers | 3.6% | 43% | 26% |
Each row mixes employers of every size, from chains to two-person shops. Where a small business falls depends on its industry: salons, barbershops and auto repair sit in "other services," dental and medical offices in health care, plumbers, electricians and HVAC companies in construction, gyms and studios in arts, entertainment and recreation, and cleaning companies along with law and accounting offices in professional and business services.
What each departure costs
A rate becomes a cost once each departure has a price. The Center for American Progress reviewed 30 case studies from 11 research papers and found that replacing an employee typically costs about 21% of that person's annual pay across most jobs, about 20% for jobs paying $50,000 or less and about 16% for jobs paying under $30,000. Those figures include advertising, interviewing and training time, plus the slower work of a new person learning the job, though only two of the 11 papers counted indirect costs such as lost customers, so the true figure for a small business may be higher.
| Average headcount (Assumption) | 10 |
|---|---|
| Annual separations rate (Cited benchmark: BLS JOLTS, other services, 2025 (3.3% × 12)) | 39.6% |
| Departures per year (Calculated (10 × 39.6%)) | 3.96 |
| Average annual pay (Cited benchmark: BLS median pay for receptionists, May 2025) | $38,010 |
| Cost per departure (Calculated ($38,010 × 20%, CAP benchmark for jobs paying $50,000 or less)) | $7,602 |
| Turnover cost per year (Calculated (3.96 × $7,602)) | $30,104 |
Illustrative example; replace every input with your own headcount, departures and pay.
Run it on your own business
How you compare
- Against your industry: divide departures in the past 12 months by your average headcount and set the result beside your row in Exhibit 1. A 30% rate in a construction business is well below the industry's 48%; the same rate in finance and insurance is above its 25%.
- Against your own past: the most useful comparison is with last year, since a change in your own rate reflects changes you made, while the industry figure reflects the whole economy.
- By tenure: if most of the people who left had been there less than three months, the cost sits in hiring and the first month, which our guide to running a business with high turnover covers step by step.
Sources
- U.S. Bureau of Labor Statistics. Annual average total separations rates by industry and region (Table 20), annual average quits rates by industry and region (Table 22) and Job Openings and Labor Turnover, January 2026, with 2025 annual data. Released March 2026.
- Boushey, H. and Glynn, S. J. There Are Significant Business Costs to Replacing Employees. Center for American Progress, 2012. Review of 30 case studies from 11 research papers.
- U.S. Bureau of Labor Statistics. Receptionists. Occupational Outlook Handbook, May 2025 pay data.
Related reading: How to Run a Business With High Staff Turnover: Training, Checklists and Systems · What Goes in a New-Hire Checklist for a Small Business
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