How to Calculate Employee Turnover

calculate employee turnover

How to Calculate Employee Turnover

Analyzing employee turnover can be painful but necessary. As you probably already know, the costs associated with turnover can be damaging for any organization.

If you’re not already analyzing turnover data, you can use this quick guide to figure out how to calculate employee turnover. Or, if you’re pretty aware about the turnover rate in your company but just want make sure you’re on the right track, you can use this information as a little refresher.

How To Calculate Employee Turnover

When it comes to looking at employee turnover, you’ll probably want to analyze voluntary turnover most closely. When employees leave voluntarily, they’re taking their valuable skills, knowledge, and abilities with them, possibly disrupting the smoothness of procedures, and leaving the company to cover the costs of replacing them. This could include recruitment efforts, training, and more.

As such, you’ll want to make sure that your annual voluntary turnover percentage is as low as possible. To calculate yours, follow these steps provided by SHRM: Divide the number of voluntary separations that occur over the course of one year by the average number of employees throughout the year. Then, multiply that figure by 100.

How Does Your Organization Stack Up?

Again, the goal is always to get your turnover rates as low as possible, but the benchmark goals for turnover vary by industry. So what’s the “magic number?” Jack Welch, former CEO of General Electric, maintained that 10% turnover was a healthy number for which to aim, because in general, the lowest-performing 10% of the company may need to be replaced anyhow.

Why The “Who” Matters More Than The Number

Welch’s approach may seem aggressive, but many experts agree that the number behind turnovers is less important than who’s really leaving. For instance, if you have a seemingly low voluntary turnover rate of less than 5%, but your top performers are the ones who are leaving, then your turnover costs could be more significant than those of a company with a higher turnover rate.

The Solution: Encouraging Employees To Stay

Instead of watching helplessly as your best employees leave to go work for your competitors, you can take a proactive approach to reducing turnover with stay interviews. These informal meetings between managers and their employees can shed light on why an employee might consider leaving – and why they continue to stay. By uncovering these important insights, your managers will be better informed for making important future business decisions that could impact company culture, engagement, and ultimately, turnover.

Do you want to reduce turnover, but have managers that are already too busy? Consider HRsoft’s automated stay interview software, STAYview. It features an interview scheduler, a stay plan generator, and other useful tools that make the entire stay interview process as easy as possible for fast-paced organizations.


HRsoft is a leading provider of strategic talent management software that improves manager effectiveness and business results. Our full suite of cloud-based HR software solutions includes applicant tracking software, compensation planning software, total rewards software, stay interview software, performance management software, and content management software. To learn more about our Stay Interview Software, STAYview, click the button below!

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