Turnover

HR Glossary for HR Professionals

Glossary of the most common HR terms and acronyms to assist professionals navigating the ever-growing and ever-changing world of HR terminology.

Turnover

What is turnover?

Turnover is a staffing calculation used to determine the rate at which an employer’s staff leaves an organization within a specified amount of time.

When paired with other metrics like employee retention, time-to-hire, employee engagement, and more, HR professionals can identify issues with a company’s culture, its recruiting and hiring processes, and other factors that impact staffing.

What are the different types of employee turnover?

Every company will experience turnover in some capacity, but there are two different types of turnover that employers should monitor. These include:

  • Voluntary Turnover: Voluntary turnover is a type of employee departure when a team member leaves a role and/or company on their own terms, either for a new position, to relocate to a different city, or for another reason. In many cases, voluntary turnover can be especially costly because the departures can be unexpected and result in unfinished projects that require other teammates to pitch in.
  • Involuntary Turnover: On the other hand, involuntary turnover is a type of employee departure where a team member is dismissed from a position within a company. This can be the result of many different factors, including poor performance, company cutbacks, company restructuring, a violation of company policies, and more.

How do you calculate employee turnover?

For employers, employee turnover is often costly. The first step to improving the employee turnover rate is to identify exactly how often employees are leaving the company and to identify if the company has high turnover in the job market. This can be calculated using the following equation:

  • Take the total number of employees who left your company within a predetermined timeframe (i.e. all employees who left The ABC Company in 2020 to calculate your annual turnover rate)
  • Divide this sum by the average number of employees in that predetermined period of time
  • Multiply this sum by 100 to calculate your turnover rate percentage

E.g. In 2020, 45 employees departed The ABC Company, which averaged 477 employees in that same timeframe. 

45 / 477 = 0.094

0.094 x 100 = 9.43%

Related Terms: Retention Strategy

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