How to Calculate Employee Turnover Rate

Buzz

Ngày cập nhật gần nhất: 15/4/2026

Content

Steps

Calculate turnover rate

Forecasting the employee turnover rate

Analyzing the impact of employee turnover rate

Employee turnover rate represents the percentage of employees who voluntarily leave the company. It is also known as the resignation rate or job-hopping rate. A high turnover rate can lead to significant costs as you constantly replace staff. Moreover, customers may perceive a decline in the value of your products or services due to a reduced workforce or remaining employees lacking motivation or morale. If your brand suffers damage, it could severely affect your business performance.

Steps

Calculate turnover rate

Calculate the monthly turnover rate.

Substitute the data into the following formula: Turnover Rate = Number of departures / Average Workforce * 100.

Example: Imagine a telecommunications company has 150 employees as of April 1, 2015. During that month, 20 employees voluntarily left the company. Additionally, the company hired 25 new employees.

(150 + 155) / 2 = 152, 5

(20 / 152, 5) * 100 = 0, 1311 * 100 = 13, 11

Thus, the employee turnover rate for April 2015 at the company is 13.11%.

Calculate the quarterly turnover rate.

150 - 30 + 40 = 160.

(150 + 160) / 2 = 155

(30 / 155) * 100 = 19, 35

Calculate the annual turnover rate.

Assume the telecommunications company in the example above had a total of 62 employee departures throughout the year.

They typically hire an additional 20% of staff during the last quarter, the busiest season. Therefore, the company had an average of 155 employees in the first three quarters and an average of 186 employees during the final quarter.

(155 * 0, 75) + (186 * 0, 25) = (116, 25 + 46, 5) = 162, 75

((155 * 39) / 52)) + ((186 * 13) / 52)) = 116, 25 + 46, 5 = 162, 75

((155 * 1.560) / 2.080)) + ((186 * 520) / 2.080)) = 116, 25 + 46, 5 = 162, 75

The average number of employees at this company is 162.75.

(62 / 162, 75) * 100 = 38, 09

Forecasting the employee turnover rate

Understanding the importance of forecasting the turnover rate. While reviewing past turnover rates is valuable, businesses must also forecast the turnover rate to assess future performance. You can use your projected turnover rate to compare with others in the same industry or sector. If the predicted turnover rate is unfavorable, the company can implement strategies to reduce employee departures.

Learn the formula for converting data on an annual basis.

R_{a} = 1 + R_{c}^{12 / N} - 1 * 100

R_{a}

R_{c}

N

Convert monthly turnover data into an annual turnover rate based on the given figures.

(2.050 + 2.047) / 2 = 2.048, 5

(125 / 2.047) * 100 = 6, 10

Convert the employee turnover rate from the monthly rate to an annualized rate. The cumulative turnover rate is 6.1% and the observation period is 5 months (from January to May).

R_{a} = 1 + 0, 061^{12 / 5} - 1 * 100

R_{a} = 1, 061^{2, 4} - 1 * 100

R_{a} = 1, 153 - 1 * 100

R_{a} = 0, 153 * 100 = 15, 3

The annual turnover rate stands at 15.3%.

Forecast the quarterly employee turnover rate.

(2.049 + 2.047) / 2 = 2.048

(37 / 2.048) * 100 = 1, 807

Make a prediction for the remaining employee turnover rate for the rest of the quarter. The cumulative turnover rate is 1.81%, with the observed period spanning two months (April and May).

R_{a} = 1 +, 0181^{3 / 2} - 1 * 100

R_{a} = 1, 0181^{1, 5} - 1 * 100

R_{a} = 1, 02727 - 1 * 100

R_{a} = 0, 02727 * 100 = 2, 727

The predicted employee turnover rate for Q2 is 2.73%.

Analyzing the impact of employee turnover rate

A high turnover rate can damage a company’s brand image. Customers largely base their satisfaction with a company on their interactions with its employees. If they notice frequent employee changes, customers might assume that the product quality or service they are receiving is inferior. High turnover rates may also lead customers to believe that the company is understaffed or that the remaining employees lack motivation and morale.

The turnover rate affects business performance. If a company loses customers due to a high turnover rate, it will negatively affect its financial results. According to a study, a high turnover rate can reduce a company’s profits by up to 400%. This study examined different branches of a temporary staffing company, and the branches with the highest turnover rates tended to be four times less profitable than those with the lowest turnover rates.

Improving employee retention rates can save a company a significant amount of money. When an employee leaves, a company may need to spend up to 1/5 of that employee’s salary to replace them. Therefore, with a high turnover rate, businesses could end up spending large amounts to recruit and hire new staff. Additionally, employee turnover leads to decreased productivity, higher costs for recruiting and training new employees, and slower output until the new hire gets up to speed. Companies can avoid these costs by implementing retention policies. Flexible work arrangements, paid sick leave, and family leave are policies that can help reduce turnover rates.

Mytour's content is for customer care and travel encouragement only, and we are not responsible.

For errors or inappropriate content, please contact us at: [email protected]