Understanding Your Annual Turnover Rate
The annual turnover rate is a key performance indicator (KPI) for human resources and management. It quantifies the percentage of employees who leave an organization over a specific 12-month period.
Formula Used:
Annual Turnover Rate = (Number of Employees Departed / Average Number of Employees) * 100
Why is this important?
- Cost of Turnover: High turnover can be incredibly expensive. Replacing employees involves costs for recruitment, onboarding, training, and lost productivity during the transition period.
- Employee Morale: Constant departures can negatively impact the morale and workload of remaining employees.
- Identifying Issues: A high turnover rate can signal underlying problems such as poor management, inadequate compensation, lack of growth opportunities, or a toxic work environment.
- Benchmarking: Understanding your rate allows you to compare it against industry averages to see how your company performs.
Interpreting the Results:
A lower turnover rate is generally desirable, indicating a stable and engaged workforce. However, some turnover is natural and can even be healthy, allowing for fresh perspectives and the removal of underperforming individuals. The "ideal" rate varies significantly by industry and company culture.
Example Calculation:
Let's say a company had 25 employees depart over the course of a year, and the average number of employees employed throughout that same year was 100.
Using the formula:
Turnover Rate = (25 / 100) * 100 = 25%
This means that, on average, 25% of the company's workforce turned over during that year.
function calculateTurnoverRate() {
var departed = parseFloat(document.getElementById("numberOfEmployeesDeparted").value);
var average = parseFloat(document.getElementById("averageNumberOfEmployees").value);
var resultDiv = document.getElementById("result");
if (isNaN(departed) || isNaN(average) || departed < 0 || average <= 0) {
resultDiv.innerHTML = "Please enter valid positive numbers for both fields. The average number of employees must be greater than zero.";
return;
}
var turnoverRate = (departed / average) * 100;
resultDiv.innerHTML = "Your Annual Turnover Rate is:
" + turnoverRate.toFixed(2) + "%";
}
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flex-wrap: wrap;
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border-right: 1px solid #ddd;
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/* Responsive adjustments */
@media (max-width: 768px) {
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flex-direction: column;
}
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border-bottom: 1px solid #ddd;
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}