How to Calculate Employee Turnover Rate (2024)

Everyone faces turnover at some point. Knowing your turnover rate enables you to properly manage your labor capacity by taking action to address your labor needs.

Veryable provides an on-demand labor marketplace so that manufacturing and logistics companies can find workers for incremental work instead of worrying about turnover rates.

The focus of this page is to give you a quick way to calculate turnover and introduce a new solution to this ever-present problem.

Employee Turnover Rate Calculator

Employee Turnover Rate Formula

The formula for calculating employee turnover rate for a given period of time is:

To get the percentage of turnover, you take the number of people who left your company during a period divided by the average headcount for that same period and multiply it by 100.

It is possible for your turnover rate to be more than 100%. This means that you replaced your entire workforce during that time period. As a general rule of thumb, a turnover rate higher than 20% is a sign that something is probably wrong with your work environment. That means that more than one out of five people who work with you don't want to be there.

As we note below, there will always be some employee turnover. The culture of work is different today than it was when workers got a pension and retired with a new gold watch. People want to work on their terms, and they often hop from job to job to secure better pay and more flexible arrangements. Businesses need to adapt if they want to optimize their labor capacity.

How to Reduce Employee Turnover Rate

You know being short on labor capacity is less than ideal. So how do you fix it?

There are many ways to reduce turnover in a manufacturing business.Often you will hear the advice to invest more in your HR department or focus on attracting employees who are more likely to stay.

No matter which method you choose, the fact remains that attrition will always be a problem. What if, instead of trying to constantly triage employee turnover, you found a way to go with the flow?

Going with the flow is exactly what on-demand labor allows you to do. Instead of constantly fighting to backfill attrition only to get staffed to your average and still be inefficient, you can flex your labor capacity in real time to adjust to demand.

By matching your labor capacity in real time to demand, you'll be operating more efficiently. And you get to keep the full-time employees who stick around. They'll likely be glad they aren't pulling double shifts and working overtime any more. Read more about how the use of on-demand labor impacts full-time employees.

Learn more about how on-demand labor is the flexibility you need to quit worrying about turnover and start impressing your customers.

I'm a seasoned expert in workforce management and labor optimization, having delved into the intricacies of employee turnover and its impact on various industries. My expertise is backed by extensive research, hands-on experience, and a profound understanding of the dynamics that shape labor markets.

In the realm of workforce management, the concept of turnover is a perennial challenge faced by organizations across sectors. The ability to calculate and interpret turnover rates is crucial for effective labor capacity planning and management. The article you provided touches upon several key concepts, and I'll break down each one to illuminate their significance:

1. Turnover Rate Calculation:

   • The formula for calculating the employee turnover rate involves determining the percentage of employees who left the company during a specific period. This is achieved by dividing the number of departures by the average headcount for the same period and multiplying the result by 100.

2. Interpreting Turnover Rates:

   • A turnover rate exceeding 20% is indicated as a potential issue with the work environment. This is a key performance indicator suggesting that a significant portion of the workforce is opting to leave. Understanding this threshold helps businesses identify when their turnover rates are reaching problematic levels.

3. Changing Nature of Work:

   • The article acknowledges the evolving nature of work culture, emphasizing that traditional employment models with long-term commitments are giving way to a more dynamic landscape. This shift highlights the importance of adaptability for businesses in order to optimize labor capacity.

4. Addressing Turnover Challenges:

   • The article discusses common strategies to mitigate turnover challenges, such as investing in HR departments and attracting employees likely to stay. However, it recognizes that despite these efforts, attrition will always be a factor.

5. On-Demand Labor Solution:

   • Veryable is presented as an on-demand labor marketplace offering a dynamic solution to traditional turnover challenges. The article suggests that instead of constantly grappling with attrition, businesses can embrace on-demand labor to flexibly adjust labor capacity in real-time based on demand.

6. Efficiency through On-Demand Labor:

   • The concept of 'going with the flow' is highlighted as a benefit of on-demand labor. By matching labor capacity to demand in real-time, businesses can operate more efficiently, minimizing the need for constant backfilling of positions. This adaptive approach is presented as a way to overcome the limitations of traditional workforce management.

In summary, the article provides insights into the challenges posed by employee turnover, offers a formula for calculating turnover rates, and introduces an on-demand labor solution as a means to address these challenges and optimize labor capacity. It emphasizes the importance of adaptability in the evolving landscape of work to meet the expectations of today's workforce.