Definition – What is employee turnover?
Employee Turnover is the rate that employees leave the organization through the year.
An employee turnover of 100% means that each position in the company will be emptied and refilled every 12 months.
An employee turnover of 200% means that each position in the company will be emptied and refilled every 6 months.
An employee turnover of 10% means that 10% of the positions in a company will be emptied and refilled every 12 months.
A high employee turnover means that the same position in an organization is left empty and filled many times through the year. A low employee turnover means that few employees are leaving the organization.
Formula – How to calculate employee turnover
Employee Turnover = Employees that left the organization / ((Employees at Beginning of Period + Employees at End of Period) / 2) x 100
At the start of the year, a business had 35 employees. At the end of the year they had 37. During this time a total of 5 people left the organization.
Employee Turnover = (5 / ((37 + 35) / 2)) x 100% = (5 / (72 / 2)) x 100% = (5 / 36) x 100% = 0.1389 x 100% = 14.89%
Therefore, in this year the company had a turnover rate of 14.89%.
Sources and more resources
- Workable – How to calculate the employee turnover rate – Some examples of the employee turnover rate formula.
- Monster HR Blog – The ideal turnover rate – Monster’s take on what the ideal turnover rate for a company it.
- Houston Chronicle Small Business – How to calculate employee turnover rate on an annual basis – The basics of employee turnover and how to calculate it.
- The Balance Careers – Learn How to Avoid Excessive Employee Turnover – Some example of how to reduce employee turnover.
- Wikipedia – Turnover (employment) – A full description of turnover in the HR context. Includes formulas and how to prevent turnover.
- Office Vibe Blog – Everything you’ve ever wanted to know about employee turnover – A long article on what employee turnover is and how to prevent it.