Employee Turnover

Employee turnover refers to the rate at which employees leave an organisation and are replaced by new hires. It includes both voluntary turnover (when employees resign) and involuntary turnover (when employees are terminated or laid off).

High turnover can indicate issues like poor job satisfaction, lack of growth opportunities, or workplace culture problems. Conversely, a healthy level of turnover can bring in fresh talent and new ideas.

Reducing turnover is a key focus for HR departments, as retaining employees helps maintain productivity, reduces recruitment costs, and strengthens team morale.

How to measure employee turnover?

Turnover is typically measured as a percentage over a specific period, such as monthly or annually. The formula for calculating employee turnover is:

The employee turnover rate formula is: (Number of employee separations / Average number of employees) x 100

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What is the main cause of employee turnover?

The most common cause of employee turnover is lack of career growth and development. Other key reasons include:

• Poor management or leadership
• Inadequate compensation or benefits
• Lack of recognition or appreciation
• Poor work-life balance
• Misalignment with company culture

Addressing these issues can significantly improve retention and employee satisfaction.