How to Calculate Your Turnover Rate

Learn how to calculate your company's turnover rate with Stratus HR. Use our calculator and understand its significance for employee retention.



High turnover rates can indicate problems in various areas such as recruiting, company culture, compensation and benefits, management, training, and career advancement opportunities. 

Determining employee satisfaction is an important task in any organization, but it can be challenging. By understanding your company's turnover rate, you can use it as a benchmark to measure the effectiveness of your initiatives over time and gauge employee satisfaction against industry standards

While you want to develop initiatives to increase retention, you’ll first need to figure out what your current turnover rate is. From there, you can monitor progress and adjust your initiatives accordingly. 

To help you calculate your employee turnover rate, we have designed a user-friendly turnover rate calculator and explained the formula in simple terms. With this calculator, you can quickly determine your company's turnover rate and take the necessary steps to reduce employee turnover and improve overall employee satisfaction.

Employee Turnover Rate: Formula Explained

To determine your company’s employee turnover rate, the formula is rather simple. First, count the number of employees who left your company during a specific time frame and then divide this by the average number of employees in total during that same time frame. From there, you will multiply your answer by 100.

(Number of departed employees/Average # of employees) X 100 = Turnover Rate

Let’s break it down further with definitions and assumptions to help you calculate your turnover rate.

Time period: This is the specific date range to review for determining your turnover rate. 

Most companies like to calculate their monthly turnover rate as well as year-to-date and annual turnover to get a dynamic overview of turnover over time. 

Let's say that a telemarketing company called CallMaster wants to calculate its employee turnover rate for the current year to evaluate its employee retention strategies. After calculating the turnover rate, they find that its rate is higher than industry standards, indicating a high number of employees are leaving the company within a year.

To address this issue, CallMaster implements several initiatives, such as better employee benefits, flexible work hours, and additional training and development opportunities. The company monitors the effectiveness of these initiatives by tracking its turnover rate quarterly.

At the end of the year, CallMaster calculates its turnover rate again to see if the initiatives had any significant impact. The turnover rate has decreased from the previous year’s calculation, indicating that the initiatives have been successful in retaining employees.

By calculating the turnover rate before and after implementing the initiatives, CallMaster was able to determine the effectiveness of its employee retention strategies and make necessary adjustments to improve employee satisfaction and retention.

It's important to note that by choosing to calculate your turnover rate at different intervals, you can gain valuable insights into employee retention trends and make informed decisions about your human resource management strategies. Depending on your specific needs and objectives, you may opt to calculate your turnover rate monthly, quarterly, yearly, or over longer periods. The frequency of your turnover rate calculation may also vary based on factors such as company size, industry, and data availability.

Number of employees who left: This is the number of employees who left during the designated date range. Use the final day an employee worked as the day they left. 

For example, 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: This is the number of employees per day during the time period divided by the number of days in that time period. 

For example, if your workplace had 100 employees from April 1 through April 25, but dropped to 80 employees on April 26, the average number of employees calculation for the month of April would look like this:

[(100x25) + (80x5)] / 30 days = 96.7

Actual turnover rate calculated: Once you have all of your data, you can then apply it to the formula to find your rate. 

From the example above, your April turnover rate would be:

20 / 96.7 x 100 = 20.68% turnover

Calculate your monthly turnover rate

Your average number of employees:

Your turnover rate:

Please note that the turnover rate calculated by this tool is an estimate based on average figures.

Key takeaways

Calculating your employee turnover rate is important because it provides insights into the health of your business. By tracking your turnover rates over time, you can identify trends and develop strategies to improve retention and reduce costs associated with turnover. Reviewing turnover rates monthly, yearly, or at any given time period can give you a clear vision of your employee turnover trends, whether or not your retention strategies are working, or perhaps identify a manager problem.

As an HR manager or business owner, it is your responsibility to maintain high levels of employee satisfaction and morale. By outsourcing your company's transactional HR tasks to Stratus HR, such as payroll, employee paperwork, workplace policies, benefits administration, and workers' comp, you can free up valuable time to focus on retention strategies. You will also gain access to a certified HR expert who can guide you with developing retention strategies and initiatives that improve employee satisfaction.

In addition, Stratus provides a custom-built HRIS/HRMS which gives you 24/7 access to employment-related data. You can monitor payroll activity, review retention rates, analyze benefits-related expenses, and always have up-to-date information available in the Stratus HR dashboard.

For more information on how Stratus HR can help your business, please book a consultation with us.

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