How to calculate employee turnover rates in 1 minute?
The employee turnover rate is a crucial metric for every business. It describes the rate at which employees are leaving your company and is an important indicator to assess various initiatives within your organization.
It can be important to monitor the employee turnover rate closely during import transitions such as digitalization programs, agile transformations, or new work initiatives.
Here at Partwell we are all about employee offboarding and collecting insights on what makes employees leave. Naturally, we know a thing or two about turnover rates.
This article provides a quick overview of how the employee turnover rate is calculated.
How to calculate the employee turnover rate?
Most companies calculate the employee turnover rate on an annual basis but that should not stop you from calculating it on a monthly or quarterly basis. If you’re calculating the turnover rate for a given year the formula is as follows:
The formula consists of three elements:
- The number of employees who left (voluntary or involuntary) the company in a certain period
- The number of employees the company was employing at the beginning of the year
- The number of employees the company was employing at the end of the year
Using these three elements, you can add the formula for the average number of employees:
A healthy turnover rate
If you’ve completed your calculation, you might be wondering what a healthy turnover rate looks like. A healthy turnover rate will hugely depend on your industry and people strategy. The majority of organizations have a turnover rate between 7-20% with an average of 10%.