Voluntary Turnover Calculator
Calculate the percentage of employees leaving voluntarily over a specific period.
What is Voluntary Turnover?
Voluntary turnover occurs when an employee chooses to leave an organization of their own accord. This typically includes resignations to take other jobs, retirements, or leaving for personal reasons. Unlike involuntary turnover (layoffs or terminations for cause), voluntary turnover reflects the employee's decision to sever the employment relationship.
Measuring voluntary turnover is crucial for HR professionals and business leaders because a high rate often indicates underlying issues with company culture, compensation, management effectiveness, or career development opportunities. It represents the loss of talent that the company presumably wanted to keep.
How to Calculate Voluntary Turnover Rate
The standard formula for calculating the voluntary turnover rate for a specific period (monthly, quarterly, or annually) is as follows:
(Number of Voluntary Separations ÷ Average Number of Employees) × 100
Step-by-Step Calculation:
- Determine the Period: Decide if you are calculating for a month, a quarter, or a year.
- Count Voluntary Separations: Sum up all employees who resigned or retired during that period. Exclude layoffs and firings.
- Calculate Average Headcount: Take the number of employees at the beginning of the period and the number at the end of the period. Add them together and divide by 2.
- Divide and Multiply: Divide the separations by the average headcount, then multiply by 100 to get a percentage.
Realistic Example
Let's assume you are calculating the annual voluntary turnover rate for a mid-sized marketing agency.
- Start of Year Headcount: 150 employees
- End of Year Headcount: 160 employees
- Voluntary Separations: 12 employees resigned during the year
First, calculate the Average Headcount:
(150 + 160) ÷ 2 = 155 employees
Next, apply the Turnover Formula:
(12 ÷ 155) × 100 = 7.74%
This means that 7.74% of the workforce voluntarily left the company during the year.
Interpreting Your Results
Once you have your rate, context is key. Turnover rates vary significantly by industry. For example:
- Retail and Hospitality: Often see rates exceeding 50% due to the seasonal nature of work.
- Technology: Typically hovers around 10-15% in competitive markets.
- Government/Public Sector: Usually lower, often under 10%.
If your voluntary turnover rate is significantly higher than your industry average, it may be time to investigate your retention strategies, conduct stay interviews, and review your compensation packages.
Frequently Asked Questions
Should I include retirements in voluntary turnover?
Yes, typically retirements are classified as voluntary because the employee chose to leave. However, some organizations calculate a separate "regrettable turnover" rate which excludes retirements, as retirements are often inevitable and not a reflection of dissatisfaction.
What is the difference between voluntary and total turnover?
Total turnover includes all separations: resignations, retirements, layoffs, and firings. Voluntary turnover only counts those who chose to leave. Total turnover helps with workforce planning (hiring needs), while voluntary turnover measures retention health.
Why did my calculation return a result over 100%?
This is possible if you have a very high volume of staff churning through a specific role. For example, if you have 10 positions, but 20 people resigned from those positions throughout the year (meaning you hired and lost people multiple times in the same seat), your rate would be 200%. This indicates extreme instability in those roles.