Combating employee turnover and preventing employee burnout is one of the core, trending challenges that HR managers and businesses must manage in today’s business world. Maintaining effective employee retention and preventing burnout, however, starts with understanding what your current employee turnover looks like.
Here is everything you need to know about employee turnover calculations to understand how effective your business is at retaining talent.
Generally speaking, calculating employee turnover is rather easy and involves a simple formula.
However, in order to calculate your turnover rate effectively, managers and employers should follow several key steps and use the following formula:
Turnover Rate = (Number of Separations ÷ Average Number of Employees) × 100
Employers and managers should adhere to the following key steps in order to effectively calculate employee turnover:
In order to calculate a meaningful turnover rate, you need to set some restrictions for the time frame you are looking at. This will help determine your average number of employees, the number of separations, and apply the rate to a specific time frame.
Common time frames used to measure turnover include monthly, quarterly, or yearly, but can be any fixed period.
Once you have chosen a time frame, add up all employees who left your company during that time.
This can include voluntary resignations, retirements, layoffs and / or other involuntary terminations. Which types of separations you choose to look at will depend on the picture you are trying to paint.
For instance, to get a full picture of turnover, you may want to include all types of separation.
If you just want to look at burnout specifically, you may want to restrict your separations to employees who voluntarily separated.
Once you have chosen your time frame, determine how many employees you had at the start of the time frame, and how many employees you had at the end of that time frame.
Add your starting employee count to your ending employee count, then divide by 2. This will give you your average employee count for your calculation.
Once you have completed the three previous steps, you can plug everything into the formula above and calculate your turnover rate.
For this example, the business we are looking at wants to calculate its turnover rate for the entire year (Step One).
Next, we have to look at all the separations for the year:
For this calculation, we want to understand the turnover rate related to burnout for the year. That means the separated employee count will be six employees (Step Two).
Now we have to find our average workforce. As of January 1st, the company had 26 employees. As of December 31st, the company had 18 employees. That makes the average for the year 22 employees (Step Three).
Now we can add our numbers into our calculation:
Turnover Rate = (6 ÷ 22) × 100
The turnover rate for the year that is related to burnout for this company is 27.3%.
Employee turnover is calculated using the following formula:
Turnover Rate = (Number of Separations ÷ Average Number of Employees) × 100
Before using the formula, employers should choose a time frame, count the relevant employee separations, and determine their average workforce for that period.
Employee turnover can be calculated over any fixed period. Common time frames include monthly, quarterly, or yearly. Choosing a specific time frame helps determine the number of separations and average number of employees to include in the calculation.
Employee separations can include voluntary resignations, retirements, layoffs, and other involuntary terminations. The types of separations you include will depend on what you are trying to measure.
For a complete picture of turnover, you may want to include all types of separations. If you are examining turnover related specifically to employee burnout, you may choose to focus on voluntary separations.
Take the number of employees you had at the beginning of the selected time period and add it to the number you had at the end of the period. Then divide that number by two.
Average Number of Employees = (Starting Employee Count + Ending Employee Count) ÷ 2
To examine turnover related specifically to burnout, you can restrict the separations included in your calculation to employees who voluntarily left the company, rather than including layoffs, retirements, and other involuntary terminations.
If you are struggling with combating employee burnout and turnover, an HR company may be able to help.
To learn more about how GNSA can help you manage your workforce, contact us today.