there are drawbacks to a lean HR team when everything is piecemealed together. For instance, when you outsource payroll to one company...
How do I calculate my turnover rate?
Looking for a quick explanation of how to calculate your company's turnover rate? Here's the formula, along with an easy-to-understand example.
You know your company has a turnover problem and you’re tired of the transient work environment and unnecessary costs it’s created. While you would love to develop initiatives to increase retention, you first need to figure out what your current turnover rate is so you can monitor the progress of anything you implement.
What’s the formula for calculating my company’s turnover rate?
Your turnover rate is a ratio of the number of employees who left during a specific time period and the average number of employees your company had during that same time period.
(Number of departed employees/Average # of employees) X 100 = Turnover Rate
Let’s break it down with some definitions and assumptions to help you with calculating your turnover rate:
Time period. The specific date range to review to determine your turnover rate. For smaller organizations, it’s helpful to look at turnover over a longer period of time, such as 6 months or a full year, rather than a 30-day period.
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Number of employees who left. The number of employees who left during the designated date range. Use the final day an employee worked as the day they left (ex: if an employee’s last day is March 31, they should be counted in March’s turnover).
Note: most employers do not include retirement in their turnover calculations.
Average number of employees. The number of employees per day during the time period divided by the number of days in that time period. If a workplace had 100 employees from April 1 through April 25 and then dropped to 80 employees on April 26, the “average number of employees” calculation would look like this:
[(100x25) + (80x5)] / 30 days = 96.7
Actual turnover rate calculated. Once you have all of your data available, apply it to the formula to find your rate. From the example above, this company’s April turnover rate would be:
20 / 96.7 x 100 = 20.68% turnover
One great benefit of working with Stratus.hr is the 24/7 access to employment-related data. Our custom-built HRIS/HRMS provides clients with user dashboards that give visual representations to their company’s stats. So, if you want to review retention, monitor payroll activity, or glance at expenditures related to benefits, the data you need is current and always available in your dashboard.
Need help understanding how to calculate your turnover rate? You've come to the right source.
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