Beginner’s Guide to Calculating Employee Turnover Rate
Every business regardless of size or industry need employees for smooth operation and realization of goals and objectives, making recruiting them among the first things to be done. One thing you should know as a business owner is that it is impossible to keep all your employees forever regardless of how well you treat them; they eventually leave voluntarily or involuntarily. The process of calculating the percentage of employees who leave either voluntarily or involuntarily and replacing them with ones is what is referred to as employee turnover rate. Here are tips for calculating employee turnover rate.
The first step to coming up with an accurate turnover figure is knowing the total number of your employees at the start of the month, knowing the ones and the ones who have been around for a while, employees at the end of each month, and the employees who left. It is time to get the average annual or monthly number of your employees by adding their number at the beginning and end of each month and dividing it by two to get the average.
Once you have the average number of your employees annually or monthly, it is time to calculate the turnover rate; you divide the number of employees who left over the year or month and multiple by a hundred to get the percentage. Whether you have a high or low employee turnover rate depending on your industry, this figure might provide answers to some questions you have been having like whether you are losing high performing employees or the time of the year when they are leaving.
The employee turnover rate is important because it helps employers and business owners understand the reasons why employees are leaving; you can easily prevent or diminish the turnover rate if you understand the problem. You need to learn about the people leaving involuntarily, which is why the involuntary turnover is important; when you fire an employee. If there is a common factor that your ex-employees state for quitting or a certain department has the highest number of turnover rate, you will understand them from the voluntary turnover.
With employee turnover rate, you get to understand the problems and start working them to diminish the turnover rate in your organization before you lose everyone. Having a turnover rate is a natural part of business since you are bound to lose or two employees, but when it is more than ten percent, it is time to take action to diminish the number. Use the tips discussed above to calculate the employee turnover rate of your business.