Most companies use the headcount turnover rate, or turnover rate, as a metric to assess the number of employees that leave the company based on the overall headcount. Analysing the trend in the turnover rate provides insight to human resources about how satisfied employees are with working at the company. If the turnover rate is high, it indicates that many employees are leaving. Factors such as the work environment, tasks, salaries, management skills, and company culture must be taken into account to improve the situation. High turnovers also translates into more costs for the company in hiring and training employees.
Determine the total number of people who have left the company in the past year, excluding employees that are on temporary leave. This includes employees that left voluntarily and involuntarily.
Determine the average number of people working in the organisation. This is the total headcount.
Divide the number of employees that have left by the total headcount to obtain the turnover rate in an year.
Turnover rates for each department can also be calculated. Some companies calculate turnover on a monthly or annualised basis.
Tips and warnings
- Turnover rates for each department can also be calculated. Some companies calculate turnover on a monthly or annualised basis.