Employee Turnover Meaning | Calculate Employee Turnover

What is Employee Turnover?

The term “employee turnover” refers to the frequency of employees leaving an organization to be replaced with new employees. It’s usually expressed in percentages of the total workforce for the course of a certain period, which could be annual or monthly.

A high rate of turnover among employees could indicate possible issues within the company, such as a lack of satisfaction at work, insufficient pay, or the absence of career opportunities. In contrast, a low level of turnover could indicate that employees are happy and satisfied with their jobs.

Types of Employee Turnover

Voluntary Turnover occurs

If employees decide to quit the company by themselves, for reasons of job change, personal reasons, or retirement.

Involuntary Turnover:

When a company chooses to end an employee’s contract for reasons like bad performance, misconduct, or organizational restructuring.

Understanding and regulating the turnover of employees is essential to keeping a steady and productive workforce.

How to Calculate Employee Turnover?

To determine employee turnover, it is common to do the steps below:

1. Determine the Period for Calculation

Choose the period for which you would like to determine the employee’s turnover (e.g., quarterly, monthly, or annually).

2. Gather Necessary Data

The Number of Employees at the Starting: The total number of employees as of the beginning of the selected pay period.
Total Employees at the End: The total number of employees as of the conclusion of the chosen pay period.
The number of employees who quit during the time (L): The total number of employees who quit the company during the time, regardless of whether they did so involuntarily or out of choice.