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Introduction

Discovering and interpreting your company’s employee turnover rate is crucial for effective Human Resources (HR) management. This article provides a quick turnover rate calculator and explains the significance of this HR metric. Learn how to calculate turnover rate and gain insights into what it reveals about your organization.

What is Turnover Rate?

Definition: Turnover rate is an HR metric indicating the percentage of employees who leave a company over a specified time frame. It assesses the success of various HR initiatives and is calculated monthly or annually.

Exclusions: Noteworthy exclusions from turnover calculations are inter-company movements, promotions, transfers, and employees on long-term but temporary leaves (e.g., maternity or sabbatical).

Importance: High turnover rates can signal issues within the organization, making it imperative to monitor and address concerns promptly.

Sector-Specific Turnover Rates

Turnover rates vary across industries. According to LinkedIn’s 2017 analysis, tech (software) had the highest turnover at 13.2%, followed by retail at 13%. Understanding industry benchmarks helps interpret your company’s turnover rate.

  • Tech (Software): 13.2%
  • Retail: 13%
  • Media & Entertainment: 11.4%
  • Government/Edu/Non-profit: 11.2%
  • Financial Services & Insurance: 10.8%
  • Healthcare & Pharmaceutical: 9.4%

How to Use the Turnover Rate Calculator

Follow these steps to use the turnover rate calculator:

  1. Choose whether to calculate the average number of active team members.
  2. Input the average number directly or provide the initial and final employee count for the period.
  3. Enter the number of employees who left during the specified time.
  4. The calculator will determine the turnover rate based on the provided data.

How to Calculate Turnover Rate

Formula: The turnover rate formula is straightforward:

  • If you have the average number:
    • Turnover Rate = (Employees who left / Average number of employees) * 100%
  • If you need to calculate the average number:
    • Turnover Rate = [Employees who left / ((Employees at the beginning + Employees at the end) / 2)] * 100%

Example Calculation

Let’s consider an example: 9 employees left a company with an average of 91 employees over a year.

Turnover Rate = (9 / 91) * 100% = 0.989 * 100% = 9.89%

Additional Business Tools

Explore other finance and business calculators such as:

  • Receivables Turnover Calculator: Evaluates how efficiently a company provides credit to customers.
  • Profit Margin Calculator: Determines the percentage of revenue remaining after deducting all expenses.
  • Contribution Margin Calculator: Calculates the difference between sales revenue and variable product costs.