Beginner’s Guide to Calculating Employee Turnover Rate
No matter where you go or the industry you check, you will not find a business or company with employees because without them, almost everything comes to a standstill. One thing you should know as a business owner is that it is impossible to keep all your employees forever regardless of how well you treat them; they eventually leave voluntarily or involuntarily. Employee turnover is turnover rate tells you the percentage of workers who leave willingly or unwillingly and are replaced by new employees. Continue reading to know how to calculate employee turnover rate.
To calculate employee turnover rate, you need to keep track of their number at the beginning of the month, at the end of the month, and the ones who have left in the course of the month and the department they are leaving from. It is time to get the average annual or monthly number of your employees by adding their number at the beginning and end of each month and dividing it by two to get the average.
Calculating the turnover rate is usually as complicated as you think; provided you have the three numbers discussed above, you have everything you need; just substitute the figures in the formula and multiple by one hundred percent. Whether you have a high or low employee turnover rate depending on your industry, this figure might provide answers to some questions you have been having like whether you are losing high performing employees or the time of the year when they are leaving.
You need to understand why employee are leaving your company especially voluntarily by conducting a thorough exit interview; getting the bottom of the problem means you can avoid it in the future too. You need to learn about the people leaving involuntarily, which is why the involuntary turnover is important; when you fire an employee. If there is a common factor that your ex-employees state for quitting or a certain department has the highest number of turnover rate, you will understand them from the voluntary turnover.
If you don’t get to the bottom of the problem, you will continue losing employee especially the most productive ones, thus, the importance of understanding the cause for leaving or quitting and taking real actions to solve the problem. Having a turnover rate is a natural part of business since you are bound to lose or two employees, but when it is more than ten percent, it is time to take action to diminish the number. If you didn’t know how to calculate employee turnover rate before, now you do thanks to this comprehensive guide.