Employee turnover is typically expressed as a percentage rate, calculated by dividing the number of employees who left an organization during a specific period by the average number of employees, and then multiplying the result by 100. For example, if 10 employees left a company with an average of 100 employees over a year, the turnover rate would be 10%. Variations in the calculation exist, such as using only involuntary separations or considering different timeframes.
Tracking and analyzing this metric provides valuable insights into organizational health and workforce stability. A high rate can indicate underlying issues like low employee morale, inadequate compensation, or lack of growth opportunities, ultimately leading to increased recruitment and training costs, decreased productivity, and loss of institutional knowledge. Conversely, a low rate can suggest positive work environment and effective employee retention strategies. Historically, analyzing workforce attrition has evolved from simple headcounts to more sophisticated metrics that offer nuanced understanding of workforce dynamics.