HR Glossary: Employee Turnover

Organizations pay close attention to the turnover rate of their workforce since it is an essential component of workforce dynamics. The movement of personnel out of an organization is referred to as employee turnover, which encompasses both voluntary departures and involuntary separations at the same time. The complexities of employee turnover are investigated in this article, which dives into its definition, several methods of calculation, the factors that contribute to it, and the effects it has on organizations.

Defining Employee Turnover

The term “employee turnover” refers to the process by which employees leave a business within a predetermined time frame, which is often performed annually. It encompasses both voluntary resignations and involuntary separations, often known as terminations, layoffs, or reductions in force, among other types of separations. The rate of employee turnover is often reported as a percentage, which provides information on the frequency with which positions are filled and vacated during a specified period of time.

Calculating Employee Turnover Rate

The employee turnover rate is a key metric for organizations to assess workforce stability. Calculating this rate involves two primary steps:

  1. Find Your Total Number of Employees:
    • Determine the period for calculation (e.g., quarterly or annually).
    • Identify the average number of employees during that period.
    • Count the total number of employees who left, regardless of whether their positions were filled.
  2. Divide and Multiply:
    • Divide the number of departing employees by the average number of employees.
    • Multiply the result by 100 to express the turnover rate as a percentage.

For example, if 26 employees left during a quarter with an average of 140 employees, the turnover rate would be (26/140) * 100 = 18.57%.

Understanding Turnover Rates

Despite the fact that turnover rates might differ from sector to sector and area to region, the average turnover rate, as reported by LinkedIn, is 10.6%. A rate that is higher than this average may indicate that employees are leaving at a pace that is higher than the average. It is possible for certain industries, such as professional services, technology, and hospitality, to have turnover rates that are higher than the average due to a variety of factors, including potential job opportunities and expectations.

Voluntary vs. Involuntary Turnover

There are two types of employee turnover: voluntary and involuntary personnel turnover. When employees decide to leave their jobs, this is an example of voluntary turnover. This decision may be motivated by causes such as better opportunities, disagreement, or dissatisfaction. Employees are considered to be involuntary when their employers make the decision to terminate their employment for reasons such as performance difficulties, layoffs, or other causes.

Causes of High Employee Turnover

Inadequate salary, a lack of opportunity for advancement, unfavorable work environments, and an inability to strike a healthy balance between work and personal life are some of the factors that lead to significant employee turnover. By gaining an understanding of these issues, organizations are able to implement adjustments that are informed in order to keep their talent.

Consequences of Employee Turnover

High employee turnover can have major adverse effects on a company, including direct costs such as those associated with recruitment and training, as well as indirect costs such as decreased morale and productivity. A low turnover rate, on the other hand, is linked to favorable outcomes such as higher performance, heightened morale, and greater social capital.

Preventing Employee Turnover

The creation of a dynamic workplace environment, the provision of ongoing training, and the promotion of a culture that encourages personal and professional development are all strategies that organizations can employ to reduce employee turnover. Reducing employee turnover and increasing employee loyalty can be accomplished by encouraging open communication, praising employees for their achievements, and engaging staff.


The phenomenon of employee turnover is complicated and has an impact on both the functioning of the organization and the well-being of its employees. An organization can try to maintain a stable and motivated staff by gaining an awareness of the factors that contribute to employee turnover, precisely measuring turnover rates, and putting into action effective preventative methods. This will allow the firm to achieve sustained success.

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