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Turnover Rate Calculator

Turnover rate is the rate at which employees leave your company. A high turnover rate indicates that a company burns through staff very quickly..

A healthy company needs a reasonable turnover rate to ensure new skills, vision, energy and objectiveness are injected into the company.

Total Number of Employees
Voluntarily Termination
Disciplinary Termination
Unavoidable Termination
Net Turnover Rate (%)3.0%
True Turnover Rate (%)2.0%
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Edit the figures above to calculate the Net and True Turnover Rate.

Voluntarily Termination: When an employee submits their notice / resigns.

Disciplinary Termination: When an employee contract is terminated due to inappropriate conduct and or breach of contract.

Unavoidable Termination: When an employee leaves due to natural or unavoidable reason such as retirement, disability or change of circumstance.

What is a Turnover Rate?

Turnover rate is the rate at which employees leave your company. A high turnover rate indicates that a company burns through staff very quickly. A high turnover rate can be attributed to:

  • Badly trained staff
  • Poorly paid staff
  • Poor working conditions
  • High stress environment
  • Work place bullying
  • Work place culture (group exclusion)
  • Poor recruiting (employing the wrong type of person)
  • Badly written job descriptions (effectively mis-selling the role to fill it quickly)
  • Poor location of building
  • Dangerous work
  • Poaching by a competitor
  • Increasing opportunities in the labour market (people change jobs more frequently during economic booms as the perceived stability risk is reduced).

Reversely, a low turnover rate indicates the opposite of the factors above. A healthy company needs a reasonable turnover rate to ensure new skills, vision, energy and objectiveness are injected into the company. Companies with a high ratio of long term employees are less dynamic and able to change to meet market conditions (which are always in a state of flux, particularly now that technology changes the playing field on a daily basis).

Good companies regularly check their Turnover Rate and use the benchmark as a means of identifying if their are any underlying issues in the company. Reduced productivity followed by increased turnover rates is typical of a company with workforce morale issues. Happy employees are productive employees.

Net Turnover Rate V's True Turnover Rate

Turnover rate can be split into Net Turnover Rate and the True Turnover Rate to enable the reviewer to disregard unavoidable losses and focus on the core figure.

  • Net Turnover Rate: The Net Turnover Rate is the Rate calculated including all staff who have left the company, whether through Voluntarily Termination, Disciplinary Termination or Unavoidable Termination.
  • True Turnover Rate: The True Turnover Rate is the Rate excluding unavoidable terminations such as retirement, disability or change of circumstance.

Analysing and Interpreting Turnover Rate figures

The key factors which contribute to Turnover rates are shown above. If you have a high turnover rate and are concerned (not all companies are, some expect and work to high turnover rates) then you need to start to look at the statistics surrounding your employees, you should start with the following questions, trends will soon appear from which you can start to investigate the root cause of your high turnover rate.

  • Are the staff leaving all from the same department or related departments?
  • Are the staff all men or women, is there a notable difference in Turnover rate between genders?
  • Are the staff all a specific race or ethnicity, is there a notable difference in Turnover rate between race or ethnicity?
  • Is the turnover rate constant? Indicating a long term contributor.
  • Has the turnover rate recently spiked? Indicating a change to situation, policy, staff has triggered the upturn.
  • Has does your turnover rate compare to other employers in the same market, similar locations?
  • What feedback have you had from your employees leaving the company? Did you do an exit interview? If not, why? Interviewing those who are leaving will often identify the root cause of turnover rates quicker that statistics and analysis will do, assuming the individuals are honest and open, not all will want an exit interview. If they don't, ask for the reason they don't want to.
  • High Turnover of new staff - Do you train correctly? Do you make your staff feel valued, part of the team? Have you met your promises from interview and contract?

How to calculate Turnover Rate | Turnover Rate Formula

Net Turnover Rate calculation is NTR = TE / (VT + DT + UT).

True Turnover Rate calculation is TTR = TE / (VT + DT).

Where:

  • NTR: Net Turnover Rate
  • TTR: True Turnover Rate
  • TE: Total Number of Employees
  • VT: Voluntarily Termination
  • DT: Disciplinary Termination
  • UT: Unavoidable Termination

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