Turnover rate

When we talk about the staff turnover rate, we refer to the total number of employees who leave an organization permanently, excluding departures due to force majeure, such as retirements or deaths.

It helps us: Measure job dissatisfaction, detect flaws in the filters applied by the organization in selection processes and, consequently, in hiring.

Generally, it is calculated on a quarterly or annual basis, since doing it monthly does not reflect trends that may be occurring in your company. So here is how to calculate it annually, very easily [1] :

Where:

S = Employees separated during that year.

I = Total number of employees at the beginning of the year.

F = Total number of employees at the end of the year.

What is the turnover rate used for?

The turnover rate helps to understand workforce stability and can provide relevant information for talent management. Among its main uses are:

Detect potential satisfaction and engagement issues: high voluntary turnover can be related to factors such as lack of recognition, working conditions, development opportunities, or leadership style.
Evaluate selection and recruitment processes: analyzing departures that occur shortly after onboarding can help identify mismatches between job expectations, required competencies, and the hired person's actual experience.
Identify areas with higher talent loss: comparing turnover across departments, positions, or professional levels allows detecting where departures are concentrated and studying their possible causes.
Analyze employee retention: observing the evolution of the indicator helps to know whether the organization is succeeding in retaining talent and which groups show a higher tendency to leave the company.
Estimate the organizational impact of departures: turnover can generate costs associated with recruitment, onboarding, and training of new employees, in addition to affecting team continuity and knowledge transfer.

Sources and references:

View reference source 1

We also talk about it in our blog:

Why do employees leave the company?

The real reasons for employee turnover are like those questions we don't want to know the answer to. Perhaps because, if we do, we should face our own mistakes. But isn't that what mistakes are for? We can learn and we must act accordingly, if we want to work in a company where people really like to be.

Say goodbye to turnover

In Human Resources, reducing turnover rates is crucial. To tackle this issue effectively, it's essential to understand the reasons behind it and take steps to address them. In this post, we'll guide you on how to reduce turnover, enhance job satisfaction, and foster an organizational culture that encourages employees to stay with your company.

back to dictionary