How to Calculate Turnover Rate per Year

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Annual Turnover Rate Calculator

Includes voluntary and involuntary departures.
function calculateTurnoverRate() { var startCount = document.getElementById("employeesStart").value; var endCount = document.getElementById("employeesEnd").value; var separations = document.getElementById("totalSeparations").value; var resultDiv = document.getElementById("turnover-result"); // Validation if (startCount === "" || endCount === "" || separations === "") { resultDiv.style.display = "block"; resultDiv.innerHTML = "Please enter values for all fields."; return; } var start = parseFloat(startCount); var end = parseFloat(endCount); var seps = parseFloat(separations); if (start < 0 || end < 0 || seps < 0) { resultDiv.style.display = "block"; resultDiv.innerHTML = "Values cannot be negative."; return; } // Calculate Average Number of Employees var avgEmployees = (start + end) / 2; if (avgEmployees === 0) { resultDiv.style.display = "block"; resultDiv.innerHTML = "Average number of employees cannot be zero."; return; } // Calculate Turnover Rate: (Separations / Avg Employees) * 100 var turnoverRate = (seps / avgEmployees) * 100; // Formatting output var htmlOutput = "
"; htmlOutput += "
Annual Turnover Rate
" + turnoverRate.toFixed(2) + "%
"; htmlOutput += "
Avg. Employees
" + avgEmployees.toFixed(1) + "
"; htmlOutput += "
"; htmlOutput += "Analysis: For every 100 employees, approximately " + Math.round(turnoverRate) + " left the company this year."; resultDiv.style.display = "block"; resultDiv.innerHTML = htmlOutput; }

How to Calculate Turnover Rate Per Year

Calculating your annual employee turnover rate is a critical metric for Human Resources departments and business owners. It measures the rate at which employees leave a workforce and are replaced. High turnover can be costly, affecting morale, productivity, and the bottom line, while low turnover often indicates a healthy company culture.

The Annual Turnover Formula

To determine your turnover rate per year, you need three specific data points: the number of employees at the beginning of the year, the number at the end of the year, and the total number of separations (employees who left) during that period.

The standard formula used by HR professionals is:

Turnover Rate = (Total Separations / Average Number of Employees) × 100

Where the Average Number of Employees is calculated as:

Average = (Employees at Start + Employees at End) / 2

Step-by-Step Calculation Example

Let's look at a realistic scenario to understand how the math works in practice:

  • Start of Year Headcount: 150 employees
  • End of Year Headcount: 170 employees
  • Total Separations: 24 employees left during the year

Step 1: Calculate the Average Headcount
(150 + 170) / 2 = 160 Average Employees

Step 2: Divide Separations by Average
24 / 160 = 0.15

Step 3: Convert to Percentage
0.15 × 100 = 15% Turnover Rate

What Counts as a Separation?

When inputting data into the Annual Turnover Calculator, ensure you are including all types of separations to get an accurate picture:

  • Voluntary Turnover: Employees resigning for better opportunities, retirement, or personal reasons.
  • Involuntary Turnover: Terminations, layoffs, or discharge for cause.

Note: Generally, temporary absences (like maternity leave) or internal transfers are not counted as separations for company-wide turnover calculations.

Interpreting Your Results

What is a "good" turnover rate? It varies significantly by industry. Retail and hospitality often see rates above 50%, while professional services may target rates below 10%. If your calculator result is higher than your industry average, it may be time to investigate your retention strategies, compensation packages, and management training.

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