Tips for Calculating Employee Turnover Rate
No matter where you go or the industry you check, you will not find a business or company with employees because without them, almost everything comes to a standstill. Unfortunately, there comes a time when one or more employees leave the company either because they have been fired or voluntarily to seek green pastures elsewhere. Since you are bound to lose one or more employees over the years, you need to understand how to calculate employee turnover rate, which is the percentage of the number of workers you have to replace with new ones. Continue reading to know how to calculate employee turnover rate.
Since there is always a chance of losing one or more employees in a span of one month, you need to keep track of the numbers if you want to calculate your employee turnover; keep an eye on the profile of leaving employees, those who have been with your for a while, the new ones, and the departments they are leaving from. To calculate the employee turnover rate, you need to first calculate the average number of employees in your company annually or yearly from the numbers you have obtained above; add your employees from the beginning of the month and the get of the month and get the average.
Calculating the turnover rate is usually as complicated as you think; provided you have the three numbers discussed above, you have everything you need; just substitute the figures in the formula and multiple by one hundred percent. The employee turnover rate is bound to vary from one month or year to another depending on different things but you can use the figure to point out any patterns employees leaving and answer some important questions including why they are leaving.
The most important thing you can learn from the employee turnover rate is why they are leaving; the more you know about why employees are leaving, the more you can do to prevent or lower the turnover rate. Involuntarily turnover is the one you get when you fire or dismiss a worker and it should tell you about the people you are hiring. With voluntary turnover, which is when your employees quit or resign, you get to understand the reason and whether it is a common problem in a single department.
If you don’t get to the bottom of the problem, you will continue losing employee especially the most productive ones, thus, the importance of understanding the cause for leaving or quitting and taking real actions to solve the problem. Thanks to the employee turnover rate, you can know whether your business is doing well or hurting. Use the tips discussed above to calculate the employee turnover rate of your business.