How Do You Calculate Labour Turnover

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Labour Turnover Rate Calculator

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function calculateLabourTurnover() { var start = parseFloat(document.getElementById('startEmployees').value); var end = parseFloat(document.getElementById('endEmployees').value); var left = parseFloat(document.getElementById('leavers').value); var resultDiv = document.getElementById('turnoverResult'); var rateOutput = document.getElementById('rateOutput'); var descriptionOutput = document.getElementById('descriptionOutput'); var statsSummary = document.getElementById('statsSummary'); if (isNaN(start) || isNaN(end) || isNaN(left)) { alert("Please fill in all fields with valid numbers."); return; } if (start < 0 || end < 0 || left < 0) { alert("Values cannot be negative."); return; } var averageEmployees = (start + end) / 2; if (averageEmployees === 0) { rateOutput.innerHTML = "N/A"; descriptionOutput.innerHTML = "Average headcount is zero. Calculation cannot be performed."; resultDiv.style.display = "block"; return; } var turnoverRate = (left / averageEmployees) * 100; rateOutput.innerHTML = turnoverRate.toFixed(2) + "%"; resultDiv.style.display = "block"; var healthMessage = ""; if (turnoverRate < 10) { healthMessage = "This is a very low turnover rate, indicating high employee retention."; } else if (turnoverRate <= 20) { healthMessage = "This is a standard turnover rate for many industries."; } else { healthMessage = "This is a high turnover rate. You may need to investigate retention strategies."; } descriptionOutput.innerHTML = healthMessage; statsSummary.innerHTML = "Average Headcount: " + averageEmployees.toFixed(1) + " | Total Departures: " + left; }

Understanding Labour Turnover

Labour turnover is a critical HR metric that measures the rate at which employees leave an organization over a specific period (usually a month, quarter, or year). High turnover can be expensive, leading to increased recruitment costs, loss of institutional knowledge, and decreased team morale.

How to Calculate Labour Turnover (The Formula)

To calculate the labour turnover rate, you follow three simple steps:

  1. Find the Average Headcount: Add the number of employees at the beginning of the period to the number at the end, then divide by 2.
  2. Count the Leavers: Determine the total number of people who left the company (this usually includes both voluntary resignations and involuntary terminations).
  3. Apply the Formula: Divide the number of leavers by the average headcount and multiply by 100.
Turnover Rate = (Number of Departures ÷ Average Number of Employees) × 100

Practical Example

Imagine a tech startup that started the year with 50 employees. By the end of the year, they had 70 employees. During that year, 12 people left the company.

  • Average Employees: (50 + 70) / 2 = 60
  • Departures: 12
  • Calculation: (12 / 60) × 100 = 20%

In this scenario, the startup has a 20% annual labour turnover rate.

Why Tracking Turnover Matters

Tracking this metric allows businesses to identify underlying issues. While some turnover is healthy (bringing in new talent and ideas), "dysfunctional turnover" involves losing high-performing employees who are difficult to replace. By monitoring this rate, management can determine if they need to improve their workplace culture, adjust compensation, or enhance their onboarding processes.

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