Employee turnover rate is a key HR metric for businesses, indicating the % of employees leaving a organization within a specific period. A high turnover rate can signal workplace issues, while a low rate suggests stability of the organization.
Formulas for Employee Turnover Rate Calculation
There are 3 to 4 formulas you may find for calculating the Employee Turnover Rate. However, one of these formulas is more authentic and widely practiced by professionals, which we will learn today.
Types of Employee Turnover Rate
- Turnover Rate
- Voluntary Turnover Rate
- Involuntary Turnover Rate
- New Hire Turnover Rate
Formula for Employee Turnover Rate
Here is the most authentic and widely practiced formula for employee turnover rate calculation:
a) Number of Employees Who Left: It means the number of employees who have left the organization within a specific period. If you want to calculate the monthly turnover rate, consider the number of employees who left during that particular month. Similarly, for the annual turnover rate, count the number of employees who left during that specific year. Lets assume 15 employees left the organization in the period of 1st January to 31st January.
b) Average Number of Employees: Average number of employees refers the average number of employees of that particular period which you want to calculate. If we are calculating for the month of January, the average number of employees will be calculated as follows:
Let’s assume we have 510 active employees at the Beginning of January and 610 active employees at the end of January. So, the Average Number of Employees will be:
Employee Turnover Rate
Let’s calculate the Employee Turnover Rate according to the data: Number of employees who left = 15, and the Average number of employees = 565
So, the employee turnover rate for the month of January is 2.65%.