![]() Three variables are required to calculate the staff turnover rate. This way, when top performers seek to take the exit door, the HR is alerted to adjust where necessary, so as to retain them. Research shows that employee turnover can cost an organisation about 90% to 200% of yearly salary, clearly a huge expense with ripple effects on a company’s finance.Īt the same time, employee turnover can help organisations determine who is leaving their firm at a given time and for what reasons. More so, new staff members typically aren’t so productive until after a few months. In particular, onboarding and training new staff is costlier than retaining old ones. ![]() Determining employee turnover rates is usually motivated by cost implications, especially in terms of expenses incurred by replacing employees.Īn employee’s exit opens up a vacancy the company has to fill and replacements don’t come cheap. Importance of Calculating Employee TurnoverĮmployee turnover rates are considered highly important, especially for Human Resources departments. This can be calculated monthly or annually, or on both basis, depending on the industry and other factors. Also known as staff turnover, employee turnover is important for an organisation to know how many employees it loses per time.Įmployee turnover rate shows the percentage of staff that left a particular organisation within a given duration. ![]() What employee turnover then does is to measure the number of employees exiting a company. In essence, employees may be asked to leave or they may leave out of their own volition. These include dismissals, retirements, lack of required qualifications and wilful resignations. Introduction to Employee TurnoverĪt one point or the other, employees are bound to leave a business entity for different reasons. ![]() Keep reading to find out more about employee turnover and how to calculate employee turnover rate. It offers insight into what workers outflow means for a company, but that’s not all. Employee turnover is an important metric that helps a company or business’s HR improve on its method of recruiting, managing and retaining its staff. ![]()
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