When your organization has employees, their job is to keep your business flourishing and performing optimally. However, in the modern world, employee turnover remains to be high. Surveys often reveal this figure to be around 63% for most US companies.
Employee turnover can have an enormous impact on a business, no matter the size. Knowing how to calculate employee turnover is important for your organization to stop wasting resources and shift this trend to become more sustainable.
Keep reading this article as we review the turnover rate and present a few ways to do it in your company.
Defining Employee Turnover
Employee turnover is a measure of the rate at which employees leave an organization. It is usually expressed as a percentage of the total number of employees in a given period of time.
How to Calculate Employee Turnover
The most common way to calculate the employee turnover rate is by taking the number of separations from employment divided by the average number of total employees. This number can be expressed as a percentage and can be annualized.
Another way to calculate employee turnover is to look at the replacement ratio. This is the number of new hires divided by the number of replacements needed.
This can also be expressed as a percentage. The replacement ratio is a good way to measure voluntary turnover.
There are other factors to consider when calculating employee turnovers, such as the type of turnover (i.e. voluntary or involuntary), the time frame (i.e. monthly, quarterly, annually), and the industry.
It’s important to use the correct method to calculate employee turnover so that you can get an accurate understanding of your company’s attrition rate.
Causes of High Employee Turnover
There are a number of factors that can influence employee turnover, including job satisfaction, salary, benefits, and working conditions.
If employees are unhappy with their job, they’re much more likely to leave. Turnover can also be affected by the availability of other jobs, the economy, and personal circumstances.
Ways to Reduce Employee Turnover
To reduce employee turnover, companies can focus on things like increasing communication, providing more training and development opportunities, and increasing compensation.
By measuring employee satisfaction levels, addressing any problems that may arise, and ensuring that employees are happy with their jobs, companies can keep them around for the long haul.
The High Cost of Employee Turnover
High employee turnover can be a big problem for any company, as it can lead to decreased productivity, decreased morale, and increased costs.
The cost of these separations includes costs like training and recruiting new employees, as well as the productivity lost from having open positions.
Reap the Benefits of Reduced Turnover Rate
Having a low turnover rate is beneficial to any company. To avoid these employee separations, it is important to know how to calculate employee turnover.
This will help identify any potential problems and help to find a solution. By doing this, businesses can save money and keep their employees happy.
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