How to Calculate First Year Turnover Rate

First Year Turnover Rate Calculator

Calculation Results

function calculateTurnover() { var totalHires = document.getElementById('totalHires').value; var earlyLeavers = document.getElementById('earlyLeavers').value; var resultDiv = document.getElementById('resultDisplay'); var rateValue = document.getElementById('rateValue'); var interpretation = document.getElementById('interpretation'); var hires = parseFloat(totalHires); var leavers = parseFloat(earlyLeavers); if (isNaN(hires) || isNaN(leavers) || hires hires) { alert("Number of leavers cannot exceed the total number of hires."); return; } var rate = (leavers / hires) * 100; var retention = 100 – rate; resultDiv.style.display = 'block'; rateValue.innerHTML = rate.toFixed(2) + "% First-Year Turnover"; var text = "Out of your " + hires + " hires, " + leavers + " left before their first anniversary. "; text += "This indicates a " + retention.toFixed(2) + "% Retention Rate for new employees."; if (rate > 20) { text += "Note: A turnover rate above 20% in the first year often suggests issues with the onboarding process or hiring criteria."; } else { text += "Note: Your first-year retention is strong compared to many industry averages."; } interpretation.innerHTML = text; }

Understanding First Year Turnover Rate

First-year turnover rate is one of the most critical HR metrics for assessing the health of your recruitment and onboarding strategies. It measures the percentage of new employees who leave the organization within their first 365 days of employment.

How to Calculate First Year Turnover Rate

The formula for first-year turnover is straightforward:

(Number of employees who left within 1 year / Total number of hires during the same period) x 100

Real-World Example

Suppose your company hired 50 new employees in 2023. By the time each of those employees hit their one-year work anniversary, 10 of them had resigned or been terminated. Your calculation would be:

• Total Hires: 50
• Leavers within 1 Year: 10
• Calculation: (10 / 50) = 0.20
• Result: 20% First Year Turnover Rate

Why High First Year Turnover is Costly

Losing employees in their first year is significantly more expensive than losing veteran staff because the company has not yet recouped the "acquisition cost." These costs include:

• Recruitment Marketing: Fees paid to job boards and LinkedIn.
• Onboarding Time: The hours managers and HR spent training the new hire.
• Lost Productivity: The period where the role sits vacant again.
• Sunk Training Costs: Specialized software training or certifications provided to the hire.

Tips to Reduce New Hire Turnover

1. Refine Job Descriptions: Ensure the role advertised matches the daily reality of the job.
2. Structured Onboarding: A "sink or swim" mentality leads to early exits. Create a 90-day integration plan.
3. Cultural Fit Assessment: Use behavioral interviewing to ensure the candidate aligns with company values.
4. Stay Interviews: Instead of waiting for an exit interview, check in at the 3-month and 6-month marks to address concerns early.