How to Calculate Employee Turnover

Feb 10, 2017 5:28:50 PM / by Involvesoft Marketing

How to Calculate Employee Turnover

Calculating Turnover Rate and the Millennial Paradigm

As Millennials begin to flood the workforce, companies can no longer rely on traditional business practices. Millennials are a group of individuals that are foreign to a traditional work environment. They tend to enjoy their work, rather than slaving away for a salary. Because of this mentality, it’s important for new companies, and existing companies, to begin implementing good business practices. Failure to do so can result in current employees leaving their jobs, or even potential employees from making a decision. Turnover rates can be a tricky subject. Not because the concept is hard to understand, but because they’re many different factors when it comes to calculating it. It's important to understand how to calculate employee turnover.

Voluntary Leavers vs. All Leavers

They're a couple different ways you can calculate your company’s turnover rates. Generally, turnover rates are calculated on a monthly basis. There are two different types of ways to determine how your turnover rates will look:

  1. The first one being calculating your rates based off voluntary leavers. What this means is that only the employees that quit their job, for whatever reason, are counted.
    • For example, let's say your company has 100 employees. In a given month, roughly 10 of your employees left the company. This means that for that given month your employee turnover rate is 10%. Remember that this only calculated employees that left their job on their own terms. This is the type of turnover rate that you wouldn’t necessarily want in your company. Having employees voluntary leave means that something within your workforce needs to be changed. Whether it’s establishing an employee alignment plan, or offering better care to your employees, something needs to be done.
  2. The next type of turnover rate can be calculated based on every employee that has left your company. This can be anywhere from voluntary leavers to involuntary leavers. Either dismissed, retired, or any other reason.
    • For example, imagine if out of 100 employees, 8 voluntarily left, 3 were dismissed and 2 retired. For that month your turnover rate would be 13%. This ratio can help you determine the future and direction of your company. Low and fairly constant turnover rates are okay, it happens almost everywhere. However, if there is a trend in the increase of your turnover rates, you must take action.


It’s fair to say that the majority of the workforce will slowly transition into Millennials. With the mindset that these individuals have, it’s important to supply the needs and wants of this new wave of employees. Turnovers happen, but they certainly can be controlled and brought down to a minimum if given proper thought. Understand how to calculate employee turnover rates and use them as a key metric to understanding the direction of your company. Do not ignore them. Realize that this new era we live in requires an equal amount of effort from both the employee and employer. Provide value and give back to your employees. I promise they’ll give back to you.

High employee turnover rates can really hurt your company. They show to potential employees that there is something wrong with your workplace environment. Treat your employees properly and offer them value. Find out how Involve is helping multiple companies bring value to their employees by Requesting A Demo today!

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Topics: Reducing Employee Turnover, Employee Retention