Employee Turnover

Employee Turnover refers to the rate at which employees leave an organization and are replaced by new hires. It includes both voluntary departures (resignations, retirements) and involuntary separations (layoffs, terminations). Turnover is a critical metric for HR and management because it affects workforce stability, recruitment costs, and overall organizational performance.

Key Facts

• Types of Turnover:
  
  • Voluntary: When employees choose to leave (for example, for another job, personal reasons).
  • Involuntary: When employers terminate employees due to performance, layoffs, or restructuring.
• Costs of Turnover: High turnover leads to costs like recruitment, training, lost productivity, and decreased morale.
• Turnover Rate Calculation: (Number of separations during a period ÷ Average number of employees during the period) × 100
• Turnover Causes: Common causes include poor management, lack of growth opportunities, low pay, poor culture, and work-life imbalance.
• Impact on Business: Excessive turnover disrupts teams, reduces knowledge retention, and can harm customer satisfaction.
• Retention Strategies: Organizations use engagement programs, career development, competitive compensation, and positive culture to reduce turnover.

1. What is employee turnover?

The rate at which employees leave and are replaced within a company.

2. Why is high turnover a problem?

It increases costs, disrupts operations, and can lower morale and productivity.

3. How do you calculate turnover rate?

Divide the number of employees who left by the average total employees, then multiply by 100.

4. What causes employees to leave?

Common reasons include poor management, lack of advancement, inadequate pay, and poor work environment.

5. How can companies reduce turnover?

By improving engagement, offering growth opportunities, fair compensation, and fostering a positive culture.