Seeing your employees leave for new opportunities can be a bittersweet experience. At first, you’re sad to see them go, especially if you’ve developed a close bond with them. Fortunately, there’s a way to determine if your turnover rate and, in turn, your company culture is healthy. How to Calculate Turnover Rate Pick a period of time that you want to measure your employee turnover rate over. This quotient will be your average number of employees. Employees at beginning of the year: 500 Employees at the end of the year: 600 Average number of employees: (500+600)/2 = 550 Number of employees who left this year: 40 Turnover rate: 40/550 = 7.27% What is a high turnover rate? A “high” turnover rate is a completely subjective measure. Turnover rates vary wildly across different industries, so it’s impossible to use a one-size-fits-all percentage to determine if your company has a high turnover rate. If you want to see the average turnover rate of your industry, LinkedIn analyzed their network of 500 million professionals to compile a report of the industries with the highest turnover rate in 2017. So to accurately gauge the health of your company’s turnover rate and culture, make sure to reference this blog post or keep an eye out for LinkedIn’s industry turnover analysis each year.
Seeing your employees leave for new opportunities can be a bittersweet experience. At first, you’re sad to see them go, especially if you’ve developed a close bond with them. But you also know that they’re moving onto bigger and better things — and you’re excited for them
However, if employee departure starts to become a regular occurrence at your company, the feeling should become more bitter than sweet, and eventually turn into concern.
Having a high turnover rate means your culture might be toxic, or your employees don’t feel fulfilled working at your company. Constantly replacing employees can also skyrocket costs and plummet productivity — if your company is a revolving door, you not only have to spend money recruiting and interviewing candidates, but you also have to train new hires who need a significant amount of time to be able to tackle a full workload.
Fortunately, there’s a way to determine if your turnover rate and, in turn, your company culture is healthy. Read on to learn how to do it.
How to Calculate Turnover Rate
- Pick a period of time that you want to measure your employee turnover rate over.
- Add the number of your employees at the beginning of the time period to the number of your employees at the end of the time period. Then, divide that number by two. This quotient will be your average number of employees.
- Divide the number of employees who left during this time period by your average number of employees.
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