How to Calculate Turnover

Employee Turnover Rate Calculator

Use this calculator to determine your organization's employee turnover rate for a specific period.

(Total employees who left during the period)

(Total employees at the beginning of the period)

(Total employees at the end of the period)

function calculateTurnover() { var separations = parseFloat(document.getElementById('separations').value); var beginningEmployees = parseFloat(document.getElementById('beginningEmployees').value); var endingEmployees = parseFloat(document.getElementById('endingEmployees').value); var resultDiv = document.getElementById('turnoverResult'); if (isNaN(separations) || isNaN(beginningEmployees) || isNaN(endingEmployees) || separations < 0 || beginningEmployees <= 0 || endingEmployees <= 0) { resultDiv.innerHTML = 'Please enter valid positive numbers for all fields. Beginning and Ending Employees must be greater than zero.'; return; } var averageEmployees = (beginningEmployees + endingEmployees) / 2; if (averageEmployees === 0) { resultDiv.innerHTML = 'Cannot calculate turnover: Average number of employees is zero.'; return; } var turnoverRate = (separations / averageEmployees) * 100; resultDiv.innerHTML = 'Employee Turnover Rate: ' + turnoverRate.toFixed(2) + '%'; }

How to Calculate Employee Turnover Rate

Employee turnover is a critical metric for any organization, reflecting the rate at which employees leave a company over a specific period. Understanding and calculating this rate is essential for assessing organizational health, identifying potential issues in recruitment or retention, and planning for future workforce needs.

What is Employee Turnover?

Employee turnover refers to the number or percentage of workers who leave an organization and are replaced by new workers. It can be voluntary (employees choose to leave) or involuntary (employees are terminated). A high turnover rate can indicate problems such as poor management, low employee morale, inadequate compensation, or a toxic work environment, leading to increased recruitment and training costs.

The Formula for Employee Turnover Rate

The most common formula to calculate the employee turnover rate for a specific period (e.g., a month, quarter, or year) is:

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

Let's break down the components:

• Number of Employee Separations: This is the total count of employees who left the organization during the period you are analyzing. This includes resignations, retirements, and terminations.
• Average Number of Employees: This represents the average workforce size during the period. It's typically calculated by adding the number of employees at the beginning of the period to the number of employees at the end of the period and dividing by two.
  Average Number of Employees = (Employees at Start of Period + Employees at End of Period) / 2

Step-by-Step Calculation Example

Let's walk through an example to illustrate how to calculate employee turnover using the formula.

Scenario: A company wants to calculate its employee turnover rate for the last quarter.

• Number of Employee Separations: 15 employees left the company during the quarter.
• Employees at Start of Period: The company had 100 employees at the beginning of the quarter.
• Employees at End of Period: The company had 110 employees at the end of the quarter.

Step 1: Calculate the Average Number of Employees

Average Number of Employees = (100 + 110) / 2 = 210 / 2 = 105

Step 2: Calculate the Employee Turnover Rate

Employee Turnover Rate = (15 / 105) × 100

Employee Turnover Rate = 0.142857... × 100

Employee Turnover Rate ≈ 14.29%

In this example, the company's employee turnover rate for the quarter was approximately 14.29%.

Interpreting Turnover Rates

• High Turnover: A high turnover rate can be a red flag. It often indicates underlying issues that are causing employees to leave, such as dissatisfaction with management, lack of career growth, poor work-life balance, or uncompetitive compensation. High turnover leads to significant costs related to recruitment, onboarding, and lost productivity.
• Low Turnover: A low turnover rate generally suggests a stable and satisfied workforce. Employees are likely engaged, feel valued, and see a future with the company. While a very low turnover might sometimes indicate a lack of fresh perspectives, a healthy low rate is usually a positive sign.

What constitutes a "good" or "bad" turnover rate can vary significantly by industry, location, and economic conditions. It's often most useful to compare your organization's turnover rate against industry benchmarks and your own historical data.

Factors Affecting Turnover

Many factors can influence employee turnover, including:

• Compensation and Benefits: Uncompetitive pay or benefits packages.
• Management Quality: Poor leadership, lack of support, or unfair treatment.
• Work-Life Balance: Excessive hours, inflexible schedules, or high stress levels.
• Career Development: Lack of opportunities for growth, training, or advancement.
• Company Culture: A toxic, unsupportive, or unengaging work environment.
• Job Fit: Employees feeling mismatched with their roles or responsibilities.

Conclusion

Calculating employee turnover is more than just crunching numbers; it's about gaining insight into the health and stability of your workforce. By regularly monitoring this metric and investigating the reasons behind employee departures, organizations can implement targeted strategies to improve retention, boost morale, and ultimately foster a more productive and sustainable work environment.