Is your employee turnover too high? Here’s why.

Discover why your team has turned into a revolving door and uncover four causes of high employee turnover in contracting businesses.

Annnd another one bites the dust. As you watch yet one more employee saunter into the sunset, it’s tough not to wonder… what is going on?

Employee turnover is painful and pricey, especially for the trades. According to the US Bureau of Labor Statistics, from March to June in 2025, average turnover was almost 27% higher in the construction industry than across the general workforce.

It’s tough to find good people, sure. But it’s even worse to lose them. The knock-on effects can be detrimental for your business, resulting in safety risks, project delays and morale meltdowns. Not to mention a major loss of employee experience.

In the United States, it’s estimated that these costs of chaos can run upwards of $700 billion a year.

A high turnover rate is definitely worth getting a handle on and if yours feels out of control, this article will help open your eyes to what’s going wrong in your contracting business.

What is a high employee turnover rate for trades businesses?

According to the US Bureau of Labor Statistics, from April to June 2025, the average turnover rate for construction was a little over 4%. That stat includes both voluntary and involuntary turnover (or “separations” as the Bureau officially calls them).

What’s the difference?

• Voluntary turnover is when someone leaves of their own accord. Maybe they’ve found a more exciting opportunity elsewhere, or retired, or just got fed up and quit. Whatever their reason, it was their own decision.
• Involuntary turnover is when you basically show someone the door. They’re terminated. Fired. Sayonara.

Now 4% may not seem like much, but to put it into perspective, if you have a staff of 15 and you lost two people in that same time period, your turnover rate would be about 14%.

In other words… too darn high.

How to calculate employee turnover

Employee turnover measures how well your company is retaining staff and gives an indication of your team’s satisfaction level. People tend to stay where they’re happy, so it’s an important metric to keep tabs on.

Here’s how to calculate employee turnover:

Step 1. Pick a time frame

Turnover is a relative metric, so first decide which time period you want to look at. Quarterly is a good one to use.

Step 2. Calculate your average # of employees

If you’re interested in your turnover during a particular quarter, add the number of employees at the start of the quarter and at the end of the quarter, then divide by two.

For example: 

On April 1st, you had 12 team members. On June 30th, you had 9. Your average number of employees for that time period would be:

(12+9) / 2 = 10.5

Don’t worry that it’s a decimal. No one will think you only had half a person, it’s just a statistical thing. Keep going.

Step 3. Calculate your turnover rate

Divide the number of people who left by the average number of employees and divide by 100 to turn it into a percentage.

Carrying on with the above example:

You went from 12 to 9 team members, so lost 3 that quarter, and your average number of employees (calculated in Step 2) was 10.5. So your turnover rate would be:

(3/10.5) x 100 = 28.6%

Step 4. Cry a little…

… And then keep reading to figure out what’s going wrong.

How to reduce high employee turnover

Before you throw up your hands and conclude crews are just flaky…

We have good news:

There are things you can do to improve your retention.

It starts with taking a careful look at your business and recognizing the conditions or practices that could be negatively impacting your retention rate.

Here’s a list of the most common turnover causes we see:

#1: Bad hiring decisions

Making bad hires sets your turnover rates up to fail right from the get-go and there are a number of reasons why they tend to happen.

• Belief that it’s futile – Hiring can be exhausting, especially when you feel stuck on repeat. At a certain point it’s easy to become disenchanted with the whole hiring exercise since “they’re just gonna quit anyway.”
• Desperation – Whether or not you become mired in a sense of futility, that doesn’t take away from the fact that sooner or later, you will need to hire some crew. If you haven’t planned effectively, it can leave you in a crunch, feeling like any set of hands will do. 
• Messy hiring process (or none at all) – There’s no defined structure leading candidates through the hiring funnel. Potential candidates aren’t vetted in conversion calls, and interviews are rushed and unfocused.
• Fear of “Thanks, but no thanks” – You think you’ve found someone, even though they don’t really align with your company’s values. But you welcome them aboard anyway… and set yourself up to do it all again. 

There’s a lot more we could say on the topic of hiring. Over the years, Breakthrough Academy has perfected a hiring system that makes top-notch talent clamor to work with you. Wanna know how it’s done? This video breaks it down.

#2: Insufficient training

As Brian Gottlieb, author of Beyond the Hammer, grew his remodelling business, he noticed that at a certain point, he was no longer just building structures, he was building a training organization, a place that offered people a path to grow and develop their expertise.

Employee churn in this industry can cost between 50 and 200% of a worker’s salary, so training is an expense that adds up quickly if you’re constantly redoing it. But when training is handled effectively, it becomes a mutual investment benefiting your company and your employee, in terms of their career path. 

Training involves both onboarding

when a new employee starts, and subsequent training as part of future career development. We’ll explore the impact of each of these.

• Haphazard onboarding – Inadequate onboarding is one of the top reasons employees leave. They get frustrated with not fully understanding how things are done, don’t have the resources they need or they aren’t clear on what their role entails.
• No career advancement – This can really hinder retaining top talent. If high performers can’t see the next step in their career ladder, they’ll go elsewhere for advancement opportunities.

How can you ensure your training covers all the bases? Find out in this video.

#3: Toxic team culture

The trades can be fertile ground for crew drama thanks to the trifecta of long hours, grueling conditions and unforeseen challenges. 

A toxic culture can have devastating impacts on employee engagement. Here are some key signs to look out for in your team:

• Slack about safety – When people feel caught in an unpleasant work environment, they can become lazy about following safety protocols, cutting corners just to get the job done and get out of there.
• Total distrust – This often stems from poor communication, with teams feeling like leadership isn’t being transparent or is making unrealistic demands on their work life balance.
• Bullying from above – This is a huge red flag of bad leadership and can play out as managers playing favorites or verbally attacking inexperienced team members. It’s even worse if victims feel there’s no one serving as a human resource person to assist.
• Playing the blame game – When things go wrong, there’s a complete lack of accountability, and instead of finding solutions, the team wastes time finger pointing.

These behaviors are worth quashing as soon as possible because once negativity takes hold it can reverberate through an entire team. Toxicity travels.

These scenarios can be tricky, but there are systems to help navigate them.

#4: Unmotivating compensation

Compensation is obviously a hot topic because people’s livelihoods support their families and lifestyles. There are a few aspects of compensation packages worth considering in relation to your turnover rate.

• Wages – It’s possible that some ground crew are living paycheck to paycheck, which means any competitor willing to pay an extra couple bucks an hour is well positioned to lure them away.
• Hours – If your labor force isn’t well-aligned with your work load, people won’t be steadily busy, which makes them more likely to jump ship if they’re able to get more consistent hours elsewhere.  
• Benefits – These days, skimping on benefits like vacation pay, sick leave and extended healthcare can function as invitations for people to exit.
• Incentives – Do you offer performance pay? Do you even know how it works? (If not, you need to watch this video!) Clear productivity goals can serve as powerful tools to reduce employee turnover.

This list gives a lot to ponder. If you stumbled over a bunch of stuff that seems familiar in your business and are feeling a little overwhelmed, don’t worry. It’s all fixable. In fact, it’s what we do.

Revved up to start reducing your employee turnover rate? There’s no better place to start than with your training system. This Training Checklist Quick Tool will get you going TODAY!

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