Employee turnover rate measures the percentage of employees who leave an organization over a specified period. High turnover signals disengagement, poor management, or compensation issues and results in significant costs — recruiting, onboarding, and lost productivity.
Turnover Rate = (Number of Separations / Average Number of Employees) × 100
Separations = employees who left during the period (resigned, terminated, retired). Average Employees = (employees at start of period + employees at end of period) / 2. Result is a percentage.
Example 1: Company started Q1 with 200 employees, ended with 190. 15 employees left during the quarter.
Result: Quarterly turnover rate = 7.69% (annualized: ~30.8%)
Example 2: Annual calculation: 500 employees on Jan 1, 520 on Dec 31, 60 total separations
Result: Annual turnover rate = 11.76% (industry average is typically 10–15%)
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