Employee turnover rate refers to the share of employees who leave the company during a certain period of time. It includes voluntary and forced departure of employees, and excludes internal movements such as promotions and internal transfers, and employees who are on maternity or parental leave, paid or unpaid leave, sick leave, etc.

Calculation of employee turnover rate (total turnover)

An example of employee turnover rate

Company A’s HR department wants to determine the employee turnover rate for the first quarter of 2020. Company A keeps monthly reports on the number of employees and reported the following figures in the first quarter:

Number of employees (January): 142
Number of employees (February): 145
Number of employees (March): 140

In addition, the company reported the following information for the same period:

• Agreed termination of employment contracts of 4 employees;
• Termination of employment contract of 2 employees;
• 2 employees on parental leave,
• 1 employee on unpaid leave;
• 1 employee transferred to another organizational unit of the company.

Note: The number of employees for the calculation is 6 because the employee who was transferred to another organizational unit by internal transfer and employees on leave are not included in the calculation.

Therefore, Company A calculated an employee turnover rate of 4.22% for the first quarter of 2020.

Other indicators of turnover through quantitative analysis

There are two basic forms of fluctuation: intentional (avoidable) – voluntary departure or organizationally conditioned departure, and inevitable – retirement, death.

Intentional turnover

Intentional (avoidable) fluctuation involves leaving the organization based on the personal decision and desire of the one leaving (voluntary) or due to organizational needs (organizationally conditioned). It can be controlled, ie the organization can influence the factors that condition it and therefore it is avoidable.

A high rate of avoidable fluctuation is a sure indicator of problems and unsatisfactory conditions in the organization. Leaving the company depends mainly on two reasons: the level of job dissatisfaction and the number of attractive alternatives the employee has outside the organization.

Frequent sick leave, correspondence via social networks during working hours, playing games, etc. These are all forms that indicate a type of absence from work, physical or mental, and to understand why they happen, it is necessary to enter psychology and reasons for employee dissatisfaction in the workplace. The driving force of any job is the motivation for the job, and due to dissatisfaction with the employer, colleagues or the job itself, there is a withdrawal from the workplace and thus reduced productivity. Since man is a social being, it is inevitable that we constantly compare ourselves with the people around us in private as well as business life. The perception that people around us work less and are rewarded more than us can jeopardize job satisfaction.

The driving force of any job is the motivation for the job, and due to dissatisfaction with the employer, colleagues or the job itself, there is a withdrawal from the workplace and thus reduced productivity.

People prone to dissatisfaction more often and more strongly show negative emotions in the workplace such as anger, nervousness, etc. It is characteristic that they are among the loudest in the organization, and like to put themselves in victim positions so others are always to blame for injustice done to them. Their dissatisfaction can be reflected in frequent job changes or in constant efforts to find a new job. Dissatisfaction caused by tasks or roles in a company is easier to influence and change. Namely, due to the monotonous work for an individual, productivity can fall over time, and by giving additional powers or tasks, this monotony can be solved.

Measure the engagement of your employees and prevent high turnover rates!

Inevitable turnover

Type of fluctuation that consists of leaving the organization due to retirement and health problems, ie those forms of departure that cannot be influenced by either the individual or the organization. As stated, they cannot be influenced but should be systematically monitored so that the organization suffers as little of a cost or further turnover as possible caused by the spillover of work tasks of the absent worker to the worker who is still in the company.