Turnover Rate Calculator
Employee Turnover Rate
0%
What is Employee Turnover Rate?
Employee turnover rate is a key Human Resources metric that measures the percentage of employees who leave an organization during a specific time period. This includes voluntary resignations, layoffs, and terminations. Tracking this metric is crucial for understanding workforce stability, company culture, and the effectiveness of retention strategies.
A high turnover rate may indicate issues with workplace morale, compensation competitiveness, or management styles, while a very low turnover rate generally suggests a stable workforce, though it can sometimes indicate stagnation.
How to Calculate Turnover Rate
The standard formula for calculating employee turnover involves three main figures: the number of employees at the start of the period, the number at the end, and the total number of separations.
Where:
- Separations: The total number of employees who left the company during the period.
- Average Number of Employees: Calculated as
(Beginning Count + Ending Count) / 2.
Calculation Example
Let's say you want to calculate the annual turnover rate for a mid-sized marketing agency:
- Employees at Start (Jan 1): 150
- Employees at End (Dec 31): 160
- Separations during the year: 15
Step 1: Calculate the Average Workforce
(150 + 160) / 2 = 155 employees
Step 2: Divide Separations by Average
15 / 155 = 0.0967
Step 3: Convert to Percentage
0.0967 × 100 = 9.67%
Why Monitoring Turnover Matters
Understanding your turnover rate helps businesses in several ways:
- Cost Management: Replacing an employee can cost 1.5x to 2x their annual salary due to recruiting, onboarding, and lost productivity.
- Talent Retention: Identifying trends allows HR to implement better benefits or engagement programs.
- Employer Branding: Consistently high turnover can damage a company's reputation in the job market.
What is a "Good" Turnover Rate?
There is no single "good" number as it varies heavily by industry. For example, the retail and hospitality sectors often see turnover rates exceeding 60%, while government or utility jobs might be under 10%. Generally, aiming for a rate of 10% or lower is considered excellent for most corporate environments.