fbpx

How to Calculate Employee Turnover?

How to Calculate Employee Turnover

Share This...

How to Calculate Employee Turnover

Employee turnover refers to the number or percentage of workers who leave an organization and are replaced by new employees during a defined period. It is often used as an indicator of the health of the organization, employee satisfaction, and the effectiveness of human resources policies.

The employee turnover rate is usually calculated on an annual basis and can be computed using the following formula:

Employee Turnover Rate = (Number of Employees Who Left During the Period / Average Number of Employees During the Period) * 100%

To find the average number of employees during the period, you add the number of employees at the start and end of the period, then divide by 2.

Here is the formula for average number of employees:

Average Number of Employees = (Number of Employees at Start of Period + Number of Employees at End of Period) / 2

By using these formulas, you can identify the proportion of your workforce that is leaving over a set period. This can help in determining if there are issues that need to be addressed to improve employee retention.

Example of How to Calculate Employee Turnover

Let’s say a company started the year with 100 employees. During the year, 20 employees left the company, and by the end of the year, the company had 110 employees.

First, we calculate the average number of employees:

Average Number of Employees = (Number of Employees at Start + Number of Employees at End) / 2
= (100 + 110) / 2
= 105

Next, we calculate the employee turnover rate:

Employee Turnover Rate = (Number of Employees Who Left / Average Number of Employees) * 100%
= (20 / 105) * 100%
= 19.05%

So, the company’s employee turnover rate for the year was 19.05%. This means that approximately 19% of the company’s workforce left during the year.

A high turnover rate can indicate issues with employee engagement, satisfaction, or morale. It might be beneficial for this company to investigate why employees are leaving and take steps to improve retention. However, what’s considered a “high” turnover rate can vary greatly depending on the industry, region, and specific job roles.

Other Posts You'll Like...

Want to Pass as Fast as Possible?

(and avoid failing sections?)

Watch one of our free "Study Hacks" trainings for a free walkthrough of the SuperfastCPA study methods that have helped so many candidates pass their sections faster and avoid failing scores...