Understanding your employer turnover rate is critical for every business. It allows organizations to gauge the effectiveness of retention efforts, determine whether their salary schedules are competitive, and otherwise monitor employee sentiment about the company.
By calculating your employee turnover, you’re empowering your business to make meaningful changes that boost engagement, morale, and, ultimately, longevity. If you are wondering how you can calculate your turnover rate and how you can use that information to your benefit, here’s what you need to know.
How to Calculate Your Employee Turnover Rate
- Gather the Right Figures
Generally speaking, you’ll need three metrics to calculate your employee turnover rate. First, you need to determine the number of workers who left your organization – both voluntarily and involuntarily – during a specific time period.
Second, you need to figure out how many employees were part of the organization at the start of that period. Finally, you’ll want to check your staffing levels at the end of that time window.
- Get the Average
Before you can assess turnover rates, you need to calculate the average number of employees you had in place during that period. Add together the number of present workers at the start of the time window and the number who were there at the end. Then, divide that figure by two. That’s your average.
- Get the Turnover Rate
With your average in-hand, divide the number of employees who left by that average. Then, multiple that number by 100. That is your turnover rate expressed as a percentage.
For example, if you have six employees leave and the average number of workers was 200, this is the calculation:
(6 / 200) x 100 = 3 percent
Making Use of Your Turnover Rate Data
Often, retention is a major concern of companies. By monitoring your turnover rate, you can gauge the effectiveness of various retention efforts, salary schedules, and other factors that impact worker longevity.
With the turnover rate information, you can analyze how adjustments within your company influence retention. For example, you can see whether salary increases lead to longevity or if a shift in your culture has a positive or negative impact.
That means you shouldn’t look at your turnover rate in isolation. Turnover is a symptom of other aspects of the organization. As a result, you have to look at it in the context of various decisions and situations that impact employees, particularly those that influence engagement, morale, and loyalty.
Ultimately, like many performance metrics, your turnover rate is simply a starting point for something greater. Rising rates may signal that an issue needs addressing while declining turnover rates show positive change. By reviewing the data in the right light, you create an opportunity for improvement.
If you’d like to learn more about how to boost retention and reduce turnover, the skilled team at The Advance Group can help. Contact us to speak with a member of our knowledgeable team today.