Analyzing and Calculating Employee Turnover Rates

One critical factor (nearly above all others) that can significantly impact a business’ sustained long-term success is employee turnover. Employee turnover refers to the rate at which employees leave a company and need to be replaced. Needless to say, high turnover can be detrimental to an organization, resulting in increased costs, decreased productivity, and a negative impact on company culture. It is crucial for businesses to analyze and calculate their employee turnover rates accurately. In this blog post, we will examine the process of analyzing and calculating employee turnover rates for any industry, providing you with valuable insights and actionable steps to effectively tackle this challenge.

Understanding Employee Turnover Rate

Before reviewing the analysis and calculation process, it is essential to have a clear understanding of employee turnover rate. Turnover rate is typically expressed as a percentage and is calculated by dividing the number of employees who left the company during a specific period by the average number of employees during the same period, multiplied by 100. This formula provides a straightforward calculation that helps organizations gauge the extent of employee turnover. The employee turnover rate formula is given below in its equation form:

Employee Turnover Rate = (Number of Employees who Left / Average Number of Employees) x 100

To calculate the average number of employees, you can use the following formula:

Average Number of Employees = (Number of Employees at the Beginning + Number of Employees at the End) / 2

Collecting and Analyzing Data

To calculate turnover rates accurately, businesses must gather relevant data. The first step is to determine the time frame for analysis, whether it be quarterly, biannually, or annually. Next, collect data on the number of employees who have left the company during that period. Segmenting this information provides further insight into the types of employees taking leave, whether a hard worker, an insubordinate employee or someone else altogether. This information can be obtained from HR records, exit interviews, and employee separation forms.

Interpreting the Turnover Rate

Once turnover rate is calculated, it is crucial to interpret the results in the context of the industry. Comparing the turnover rate to industry benchmarks allows businesses to determine whether their turnover is higher or lower than the average employee turnover rate for similar companies. This information provides insights into the competitiveness of the job market, the effectiveness of talent retention strategies, and the overall health of the organization.

Industry Benchmarks

To gain a better understanding of turnover rate, it’s also helpful to compare it to industry benchmarks. Different industries have varying average turnover rates, due to factors such as job demands, market conditions, and employee expectations.

For instance, according to a recent study conducted by the Society for Human Resource Management (SHRM), the average voluntary turnover rate across industries in the United States was 13% in 2020. However, it is essential to note that benchmarks can vary widely depending on geographic location, industry sector, and organizational size.

Addressing High Turnover

If the calculated turnover rate is higher than the industry benchmark or higher than what is mutually deemed acceptable, it is essential to take proactive measures to address the issue. High turnover can be an indication of underlying problems, such as poor management, inadequate compensation, lack of career development opportunities, or a toxic work environment. An effective workplace investigation process can help you identify and evaluate these issues.

To tackle excessive turnover rates, start by identifying the reasons behind each departure. Conducting exit interviews or surveys can provide valuable feedback and shed light on the issues that need to be addressed. Once the root causes are identified, organizations can implement targeted strategies to improve employee retention, such as enhancing talent acquisition strategies, offering competitive compensation packages, providing opportunities for growth and development, effective team building, or a combination thereof.

Monitoring Progress and Continuous Improvement

After implementing retention strategies, it is crucial to monitor the impact and track progress over time. By regularly calculating and analyzing the turnover rate, organizations can evaluate the effectiveness of their initiatives and make adjustments if needed. Additionally, tracking turnover by specific departments or job roles can provide insights into areas that require additional attention.


In conclusion, analyzing and calculating employee turnover rates is vital for an organization of any size. It provides businesses with valuable insights into their talent retention efforts, allowing them to identify areas of improvement and take proactive measures. By collecting and analyzing relevant data, calculating the turnover rate using a simple formula, and interpreting the results in the context of the industry, organizations can make informed decisions to address turnover and improve overall employee satisfaction and retention.

Leave a Reply

Your email address will not be published. Required fields are marked *