What is the Employee Turnover Rate?

Your employee turnover rate is a HR metric about the number of employees who have left your company during a certain time. If you have a high turnover rate, then it means that you have a lot of employees leaving. If your turnover rate is low then it means that your employees tend to stay with you for longer.

How To Calculate Your Employee Turnover Rate

To calculate your employee turnover rate you first need to decide what time period you are interested in. The two most common time periods to use are monthly and annual.

Using your decided time period, calculate the following three numbers:

  • Number of employees at the start of the time period
  • Number of employees at the end of the time period
  • Number of employees who left during the time period

To use the employee turnover rate formula, you will need to know the average number of employees you had during the time period. You can calculate this as follows:

Average Number of Employees = ( No. of Employees at Start + No. of Employees at End ) / 2

Once you know your average number of employees, you can calculate your employee turnover rate using the following formula:

Employee Turnover Rate = ( Number of Employees who have left / Average Number of Employees) x 100

For Example

We will use the following numbers for this example:

  • Employees at start = 20
  • Employees at end = 22
  • Employees who left = 5

Average number of employees = ( 22 + 20 ) / 2 = 21.

Turnover Rate = (5 / 21) * 100 = 23.8%

What Is A Good Employee Turnover Rate?

Ideally, you want your turn over rate to be as low as possible. In the UK, the average turn over rate is about 15% per year. Anything lower than this and you are probably doing great. Anything higher and you should definitely start digging deeper into why your employees are leaving your company.

Be Proactive

The cost of a high turnover rate to your company can be extremely high. Recruiting and training replacement employees can be very expensive. By engaging with your employees you can look out for early warning signs that they are unhappy and take steps before it is too late.

Keep a record of your turnover rate each year so that you can compare how you are doing. If your turnover rate starts to increase, take steps to reduce it. Don’t wait until it is too late.

No matter what you do, it is likely that some employees will still leave you. The best you can do is understand their reasons. We recommend that you always perform an exit interview with employees when they are leaving you. What you learn from these exit interviews can help you prevent future losses.


Articles written by and for SkyHR for our blog and other sections of our main website, https://skyhr.io, by the central SkyHR team

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