What is employee turnover, and why does it matter?
Employee turnover happens when workers leave your company, and you must replace them. A high turnover rate drains resources through recruitment, onboarding, and productivity loss.
But what exactly is a high employee turnover rate? The average across industries is ~26%. For tech companies, anything above ~13% is high, while a healthy figure is ~8–10% annually.
Why? For example, replacing a software developer costs several months of their annual salary. It requires recruitment, onboarding, and the time needed to reach full productivity. This process typically spans six to nine months of salary equivalent.
7 root causes of employee turnover in remote IT teams
The most common reasons IT professionals leave:
- Below-market compensation.
- Limited career growth.
- Poor management practices.
- Weak team culture in distributed teams.
- Lack of recognition and appreciation.
- Inadequate work-life balance.
- Misalignment with company values. 👇
1. Below-market compensation
When your compensation lags behind market rates, you become vulnerable to poaching.
Salary expectations vary dramatically by geography. Remote European teams require market-specific benchmarking to remain competitive. A senior developer in Poland has different compensation expectations than one in Bulgaria or Romania.
2. Limited career growth
94% of employees stay longer with a business that invests in their professional development. IT professionals aren’t an exception. Without visible growth opportunities, even well-paid employees start looking elsewhere.
High employee turnover often concentrates among mid-level employees who see no path to senior or leadership roles. This becomes more acute in remote teams, where career progression feels less visible than in traditional office environments.
3. Poor management practices
40% of workers report leaving a job specifically because they didn’t trust their manager. Micromanagement, unclear expectations, and a lack of support drive high worker turnover.
Remote work amplifies management challenges. Managers who rely on physical presence to assess productivity struggle with distributed teams. This leads to excessive check-ins, unclear communication, and erosion of trust.
4. Weak team culture in distributed teams
23% of fully remote workers identified loneliness as their second-biggest challenge. When team members feel isolated, they disengage.
Culture doesn’t happen automatically in distributed teams. Without intentional connection points, employees feel like independent contractors rather than team members. This contributes directly to high turnover rates.
5. Lack of recognition and appreciation
~55–79% of employees who quit cite lack of appreciation as a key reason. When contributions go unnoticed, employees lose motivation.
Recognition matters more in remote settings, where casual acknowledgment doesn’t happen naturally. The absence of hallway conversations and impromptu praise creates recognition gaps that feed employee turnover.
6. Inadequate work-life balance
Remote work blurs boundaries between personal and professional time. Without clear policies, employees experience burnout.
European labor laws mandate stronger work-life protections than US standards. Companies managing cross-border teams must navigate these differences to prevent employee turnover driven by exhaustion.
7. Misalignment with company values
European employees do consider company values when deciding whether to stay or leave. For instance, 91% of Belgian respondents say it is important, with 74% rating it as very important.
When daily work conflicts with stated values, employees feel disillusioned. This misalignment often surfaces during economic pressure when companies abandon stated commitments.
The real cost of a high turnover rate
To help justify retention investments, you need to understand:
- Direct costs.
- Indirect costs.
- Hidden costs. 👇
Direct costs
Recruitment consumes significant resources through job ads, recruiter fees, and interview time. Onboarding requires training materials, mentor time, and administrative work. New hires typically need several months to reach full productivity.
Indirect costs
Empty positions create productivity gaps that burden remaining team members. Knowledge walks out the door with departing employees, including undocumented processes and client relationships. Team morale suffers as colleagues take on additional work, increasing the risk of burnout across the team.
Project delays cascade when key contributors leave mid-cycle. Technical debt accumulates as rushed handoffs skip documentation. Client relationships weaken when their primary contacts disappear.
Hidden costs
Remaining employees watch colleagues leave and question their own future. High staff turnover becomes self-reinforcing: instability drives more departures. Companies develop reputations that make recruiting more difficult and costly.
With that in mind, you’re ready to move on to solving the problem.
12 employee turnover solutions that work
To address the root causes of employee turnover through systematic changes, take the following steps:
- Benchmark and adjust compensation quarterly.
- Create clear career ladders.
- Implement skills development programs.
- Improve manager training.
- Build an intentional remote culture.
- Establish recognition systems.
- Respect time zones and work-life boundaries.
- Conduct stay interviews.
- Offer flexible work arrangements.
- Improve onboarding for remote workers.
- Address toxic team members quickly.
- Use predictive analytics to identify flight risks. 👇
1. Benchmark and adjust compensation quarterly
Use Payscale, Glassdoor, or levels.fyi for market data. Note: These platforms may be limited or less reliable due to smaller sample sizes. For higher accuracy, it’s often better to order labor market research from a specialized agency.
Review salaries every quarter rather than annually. Consider differences in purchasing power for remote workers across countries.
Companies that proactively adjust salaries experience lower turnover among top performers.
2. Create clear career ladders
Document promotion criteria for each level. Schedule quarterly career development conversations. Offer lateral moves into new technologies or domains when vertical advancement isn’t immediately available.
For remote IT teams, create senior individual contributor tracks, so developers can advance without managing people. This addresses a significant cause of employee turnover among technical experts.
3. Implement skills development programs
Budget for courses, conferences, and certifications. Allow dedicated learning time during work hours, not just personal time. Create mentorship pairings across experience levels.
4. Improve manager training
Train managers on remote leadership quarterly rather than once annually. Use 360-degree feedback to identify managers who drive high employee turnover. Provide coaching to underperforming managers or transition them to individual contributor roles.
Teams with strong managers have lower turnover than teams with weak managers.
5. Build an intentional remote culture
Schedule virtual coffee chats that randomly pair team members. Host annual in-person team gatherings. Create channels for non-work topics. Celebrate wins publicly in team meetings.
6. Establish recognition systems
Implement peer-to-peer recognition tools. Share wins in company-wide meetings. Tie recognition to company values rather than just project completion.
Start with a weekly email highlighting team member contributions. This costs nothing, but addresses a significant cause of employee turnover.
7. Respect time zones and work-life boundaries
Schedule meetings during overlapping working hours across time zones. Use asynchronous communication for non-urgent matters. Mandate vacation usage, since many European workers don’t use their full allocation despite legal requirements.
Additionally, implement no-meeting periods for focused work.
8. Conduct stay interviews
Meet with each team member quarterly. Ask what would make them consider leaving and what would make them stay longer. Track patterns across responses to identify systemic issues.
Employees decide to leave six to twelve months before announcing their departure. Stay interviews catch problems early enough to prevent employee turnover, rather than learning about issues during exit interviews.
9. Offer flexible work arrangements
Allow flexible hours within reasonable coordination windows. Offer compressed work weeks, where legally and operationally feasible. Let employees choose their work location among home, coworking spaces, or the office.
Companies that offer flexibility have lower turnover than those that mandate specific schedules or locations.
10. Improve onboarding for remote workers
Create 90-day structured onboarding plans. Assign onboarding buddies beyond direct managers. Set clear 30/60/90-day goals. Check in weekly during the first three months rather than waiting for formal review cycles.
Employees who receive structured onboarding are 69% more likely to stay for three or more years.
11. Address toxic team members quickly
Document behavioral issues immediately rather than hoping they resolve. Give one clear warning with a specific improvement timeline and expectations. Remove toxic employees if they don’t improve.
One toxic team member can cause multiple good employees to leave. The impact of staff turnover due to toxicity outweighs the discomfort of managing someone out.
12. Use predictive analytics to identify flight risks
Track engagement scores, performance trends, and tenure patterns. Monitor participation changes in team activities. Use HR analytics tools to identify early warning signals:
- Decreased contribution metrics.
- Reduced participation in discussions.
- Withdrawn behavior.
How to reduce employee turnover in 90 days: Action plan
To decrease employee turnover systematically rather than through scattered initiatives:
- Prioritize quick wins in month one.
- Addresses critical gaps in month two.
- Establish sustainable systems in month three. 👇
Weeks 1-4: Assess current state
Calculate your current turnover rate using this formula: (Annual departures ÷ Average headcount) × 100. Conduct stay interviews with your top performers to understand what keeps them engaged and what might push them to leave.
Benchmark your compensation against market data using multiple sources. Identify your top three turnover drivers by analyzing exit interview patterns and stay interview concerns.
Weeks 5-8: Quick wins
Fix obvious compensation gaps that put you below market rates. Launch a peer recognition program to address appreciation deficits. Improve the quality of manager one-on-one meetings through training and templates.
Create career development templates that make growth paths visible. These changes show employees you’re addressing their concerns before they resign.
Weeks 9-12: Systemic changes
Document career ladders with clear advancement criteria. Implement learning stipends and dedicated development time. Establish remote culture initiatives that build connection.
Set up a quarterly stay interview process to catch issues before they drive employee turnover. Build these systems into your regular operations rather than treating them as one-time projects.
Measuring success in reducing employee turnover
To understand whether your efforts are reducing turnover, track the right metrics: leading and lagging indicators. 👇
Leading indicators
Engagement scores should target 75% or higher favorable responses. Stay interviews should indicate that fewer than 10% of employees exhibit serious flight-risk signals. Manager effectiveness scores should reach 80% or higher satisfaction ratings.
Learning program participation should reach at least 70% enrollment. These metrics predict future turnover before employees announce departures.
Lagging indicators
The voluntary turnover rate should remain below 10% annually for IT teams. Regrettable turnover among high performers should stay below 5%. Time-to-productivity for new hires should decrease as onboarding improves.
Track these monthly to identify trends. A single month’s spike matters less than directional movement over quarters.
How to prevent employee turnover in high-risk situations
To rebuild stability after turnover spikes, you need specific responses for every common crisis scenario:
- When a key employee seems disengaged.
- When a competitor approaches your team member.
- When multiple team members leave simultaneously. 👇
When a key employee seems disengaged
Schedule a one-on-one within 24 hours of noticing the change. Ask directly what’s happening, and listen without defending or explaining the company’s constraints.
Identify specific actionable changes you can make immediately. Follow up within one week with concrete actions taken, not just promises. This reduces employee turnover by addressing issues before they lead to resignations.
When a competitor approaches your team member
Acknowledge that you can’t compete on every factor. Emphasize non-financial differentiators, including growth opportunities, project impact, and team culture.
Be transparent about realistic future opportunities. Make counter-offers only if you already intended to promote or raise that person. Respect their decision to leave rather than pressuring them to stay.
When multiple team members leave simultaneously
Identify whether there’s a common cause, such as a toxic manager or systemic issue. Conduct emergency stay interviews with remaining team members within 48 hours.
Address the root cause within two weeks, not months. Communicate changes transparently to the team. Increase one-on-one frequency temporarily to stabilize remaining employees.
Managing employee turnover vs. embracing healthy turnover
You don’t always need to invest in retention. Sometimes it’s better to accept departures. To make the right decisions, you must distinguish healthy employee turnover patterns from problematic ones. 👇
Signs of healthy employee turnover
Bottom performers who can’t meet role requirements create opportunities to upgrade talent. Wrong-fit hires who discover mutual incompatibility within six months prevent longer-term problems. Natural career progression, where employees outgrow available opportunities after three to five years, benefits both parties.
Red flags indicating unhealthy turnover
Top performers leaving within 18 months signal serious issues. Clustered departures from the same team reveal management or culture issues. Multiple employees citing identical reasons for leaving point to fixable systemic difficulties.
High turnover among new hires with less than one year of tenure indicates onboarding or role-mismatch issues. These patterns reveal reasons for employee turnover that you must address.
How to reduce turnover of employees, specifically in remote European IT teams
Distributed European teams require approaches beyond standard employee turnover strategies. You need to address challenges related to:
- Distributed team cohesion.
- Varying labor laws and expectations.
- Retention in competitive markets. 👇
Challenge: Distributed team cohesion
European teams span multiple time zones, from Portugal to Romania. Build connections through quarterly in-person meetups where possible. Use virtual team-building with professional facilitators rather than forced-fun activities.
Create regional subteams to build local connections while maintaining cross-regional collaboration. These address weak culture as a cause of employee turnover in distributed settings.
Challenge: Varying labor laws and expectations
Western European countries typically mandate 25–30 vacation days and strong work-life protections. Eastern European tech markets tend to emphasize rapid career progression. Nordic countries expect flat hierarchies and high autonomy.
Understanding these differences prevents employee turnover driven by unmet cultural expectations. Research labor requirements for each country where you employ people.
Challenge: Retention in competitive markets
Case in point: Poland, Romania, and Ukraine face aggressive tech recruiting. Companies compete for limited senior talent pools. Counter high turnover rates with:
- Competitive, well-structured compensation.
- Exposure to modern technology stacks.
- Clear paths to senior or principal roles.
Summary
The companies with the lowest staff turnover rates don’t wait for exit interviews to learn what’s broken. They build retention into every process from hiring through career development. They measure what matters and adjust based on data rather than assumptions.
Focus on reducing employee turnover by preventing the top causes rather than reacting to each departure individually. You need systematic approaches to employee turnover, not scattered, reactive fixes each time.
FAQ
Above ~13% annually is high for tech companies. A healthy rate falls between ~8% and ~10%. Calculate yours using this formula: (Annual departures ÷ Average headcount) × 100.
Quick wins show results in three to six months. Systemic changes take 12–18 months to impact turnover rates fully. Track leading indicators monthly to confirm you’re moving in the right direction.
Only if you already planned to promote or raise them. Focus on preventing employee turnover rather than responding to resignation notices.
These terms mean the same thing. Both refer to the rate at which employees leave and must be replaced.
Track departures, calculate replacement timeframes, and measure productivity loss during vacancies. Include project delays and the effects on team morale. The full calculation requires tracking both direct costs and indirect productivity impacts.
Accept departures of poor performers, toxic team members, or employees who have genuinely outgrown your available opportunities. Focus retention efforts on top performers who drive results.
Poor management causes roughly half of voluntary departures. Improving manager quality through training and accountability often reduces turnover without other significant structural changes.
Isolation, communication gaps, lack of recognition, and unclear expectations create unique challenges for distributed teams. Remote work amplifies standard turnover causes unless you build intentional connection and clarity into your processes.
