What is Employee Turnover?

Employee turnover, or turnover rate, is the measurement of the number of employees who leave an organization during a specified time period, commonly one year. Businesses measure the total number of employees who leave, but turnover can also apply to subcategories like individual departments or demographic groups.

Calculating Employee Turnover

To calculate employee turnover, divide the sum total of the number of employees that leave within a specific period of time by the average number of employees that work within the selected timeframe. Multiply that number by 100 to calculate the employee turnover rate. For example, if 26 out of 140 employees leave in a month, the turnover rate would be around 18.6%.

Don’t include temporary hires or employees who go on temporary leave in either factor of the equation. Including these types of temporary shifts in labor force numbers will skew your turnover rate higher than it really is.

Voluntary vs Involuntary Turnover

Voluntary turnover is when an employee actively chooses to leave, which may be due to better job opportunities elsewhere, conflict within the workplace, or disengagement. Involuntary turnover occurs when an employer chooses to terminate an employee or remove them permanently from the group in question, often because of poor performance or toxic behavior.

Causes of Employee Turnover

The reasons why employees leave a department or organization vary, including negative and positive reasons. Some common causes of employee turnover are better job opportunities, toxic work environment, lack of growth opportunities, and poor management. Understanding the reasons behind voluntary and involuntary turnover can help businesses make the necessary changes to maintain their workforce at the desired level.

Reducing Employee Turnover

Reducing employee turnover requires understanding the causes of turnover and implementing strategies like flexible work policies, providing growth opportunities, and transparent communication with management. Retention issues can happen at all levels of the company, but proven strategies can help manage turnover effectively.