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Turnover rate is the rate at which employees leave your company. A high turnover rate indicates that a company burns through staff very quickly.
A healthy company needs a reasonable turnover rate to ensure new skills, vision, energy and objectiveness are injected into the company.
Edit the figures above to calculate the Net and True Turnover Rate.
Voluntarily Termination: When an employee submits their notice / resigns.
Disciplinary Termination: When an employee contract is terminated due to inappropriate conduct and or breach of contract.
Unavoidable Termination: When an employee leaves due to natural or unavoidable reason such as retirement, disability or change of circumstance.
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Turnover rate is the rate at which employees leave your company. A high turnover rate indicates that a company burns through staff very quickly. A high turnover rate can be attributed to:
Reversely, a low turnover rate indicates the opposite of the factors above. A healthy company needs a reasonable turnover rate to ensure new skills, vision, energy and objectiveness are injected into the company. Companies with a high ratio of long term employees are less dynamic and able to change to meet market conditions (which are always in a state of flux, particularly now that technology changes the playing field on a daily basis).
Good companies regularly check their Turnover Rate and use the benchmark as a means of identifying if their are any underlying issues in the company. Reduced productivity followed by increased turnover rates is typical of a company with workforce morale issues. Happy employees are productive employees.
Turnover rate can be split into Net Turnover Rate and the True Turnover Rate to enable the reviewer to disregard unavoidable losses and focus on the core figure.
The key factors which contribute to Turnover rates are shown above. If you have a high turnover rate and are concerned (not all companies are, some expect and work to high turnover rates) then you need to start to look at the statistics surrounding your employees, you should start with the following questions, trends will soon appear from which you can start to investigate the root cause of your high turnover rate.