How to Calculate Employee Turnover Rate by Year

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Employee Turnover Rate Calculator

Annual Turnover Rate

0%

How to Calculate Employee Turnover Rate by Year

Employee turnover rate is a critical Human Resources metric that measures the percentage of workers who leave an organization during a specific period (typically one year) and are replaced by new hires. Understanding this number helps businesses assess their workplace culture, compensation competitiveness, and management effectiveness.

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

The 3 Steps to Calculate Annual Turnover

To find your yearly turnover rate accurately, follow these steps:

  1. Find the Average Number of Employees: Add the headcount from January 1st to the headcount on December 31st, then divide by 2.
  2. Count Total Separations: Sum up everyone who left the company during that 12-month period. This includes both voluntary resignations and involuntary terminations.
  3. Divide and Multiply: Divide the number of separations by your average headcount and multiply by 100 to get the percentage.
Practical Example:
Suppose a tech company starts the year with 200 employees and ends with 220. During the year, 30 people left the company.

1. Average Employees: (200 + 220) / 2 = 210
2. Separations: 30
3. Calculation: (30 / 210) * 100 = 14.28%

Why Yearly Turnover Matters

High turnover rates are incredibly expensive. The Society for Human Resource Management (SHRM) estimates that replacing an employee can cost 6 to 9 months of an employee's salary on average. These costs include recruitment, interviewing, onboarding, and the loss of productivity during the ramp-up period for new hires.

What is a "Good" Turnover Rate?

While turnover varies by industry, a general benchmark for healthy turnover is around 10%. However, industries like retail or fast food may see rates as high as 100%, while government or utility sectors often see rates below 5%. It is essential to compare your rate against your specific industry's standards.

Types of Turnover to Track

  • Voluntary Turnover: When an employee chooses to leave (better jobs, personal reasons).
  • Involuntary Turnover: When the employer initiates the separation (layoffs, firing for cause).
  • Desirable Turnover: When low-performing employees leave, allowing the company to hire better talent.
  • Undesirable Turnover: When your top performers or "high-potentials" leave for competitors.
function calculateTurnover() { var startEmp = document.getElementById('startEmployees').value; var endEmp = document.getElementById('endEmployees').value; var deps = document.getElementById('departures').value; if (startEmp === "" || endEmp === "" || deps === "") { alert("Please fill in all fields to calculate."); return; } var start = parseFloat(startEmp); var end = parseFloat(endEmp); var separations = parseFloat(deps); if (isNaN(start) || isNaN(end) || isNaN(separations)) { alert("Please enter valid numeric values."); return; } // Step 1: Calculate Average Number of Employees var avgEmployees = (start + end) / 2; if (avgEmployees === 0) { alert("Average number of employees cannot be zero."); return; } // Step 2: Calculate Turnover Rate var turnoverRate = (separations / avgEmployees) * 100; // Display Result var resultBox = document.getElementById('resultBox'); var resultValue = document.getElementById('resultValue'); var resultText = document.getElementById('resultText'); resultValue.innerHTML = turnoverRate.toFixed(2) + "%"; resultText.innerHTML = "Based on an average headcount of " + avgEmployees.toFixed(1) + " employees."; resultBox.style.display = "block"; }

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