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What is Your Employee Turnover Rate?

In September 11, 2019
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Do you know what your company’s employee turnover rate is? An employee turnover rate is the percentage/number of employees who have left a company and are replaced as a result. The cost of replacing an employee is somewhere between 50 and 60 percent of the lost employee’s salary, according to industry experts. This can put a damper on your profit margin, which is why it should be important for you to calculate and track (as well as control) your employee turnover rate.

How to Calculate Your Company Employee Turnover Rate

The Society for Human Resource Management suggests you calculate your employee turnover by the number of employee separations by the average number of employees within your company during a specific period – then multiply that number by 100. 

For example, if you want to calculate your employee turnover rate over an entire year, calculate that year’s separations divided by the average number of employees for the entire year, multiplied by 100.

Be sure your employee headcount is accurate before you try to calculate your turnover rate. The headcount includes all employees – part- and full- time workers as well as temporary employees or those who are on leave or temporarily laid off. 

Compare Data

It would also be prudent for you to review data by industry and geographic region to compare your numbers to. Check out the Job Openings and Labor Turnover Survey (JOLTS), which is conducted by the Bureau of Labor Statistics. You can generate the turnover rate and total number of separations within your industry with this data and compare your numbers to see how your company measures up.

If your company turnover rate is lower than average, this means your employees are likely content. If it is higher, however, you might want to revisit your employee retention strategy.

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