Obtaining and retaining qualified personnel has been one of the most difficult challenges for companies in today’s market. Flexibility, higher wages due to demand, and health concerns are key issues for workers.
One key metric that companies use to evaluate their success is Employee Turnover Rate. It’s a measure of employees leaving a company. Although market trends are a significant factor impacting this rate, turnover is very expensive and should not go unchecked. Costs to recruit, train and acclimate personnel are not only hard costs, but also decrease productivity of personnel involved in this process, and cause delays in production and/or providing services. In fact, it doesn’t end there, high turnover impacts customer satisfaction, existing employee satisfaction, profitability, growth plans, etc. When it comes right down to it, maintaining qualified personnel must be a top priority for all employers.
To get an idea as to just how high the Employee Turnover Rate has been, in the 2021 Bureau of Labor Statistics Job Openings and Labor Turnover Survey News Release posted on March 11, 2021, report, “the overall turnover rate is 57.3 %, but that number drops to 25% when considering only voluntary turnover, 29% when considering involuntary turnover, and just 3% when looking at only high-performers”.
To compute your company’s Employee Turnover Rate, use the following formula:
Consider the following example:
Twenty Employees left your company in 2021. At the beginning of the year, you had 60 employees and at the end of the year you had 70. Your Average Employees for 2021 would therefore be (60 + 70)/2 or 65.
The following are a few of my personal tips for keeping your Employee Turnover Rate down: