How to Calculate Annual Turnover Rate
When it comes to running a business, it is important to have workers who understand the business and can provide quality service to customers. However, when a high annual turnover rate occurs, it can cause instability in the workplace, causing the company to suffer. Many employers look to this simple calculation as a measure of their own management styles and learn how to entice quality workers to stay over the long term.
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Instructions
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Determine how many workers were employed by the company during the last year. Depending on how you want to measure the statistic, you might not want to include part-time or seasonal employees who tend to have a shorter work term with a company. The company work force statistics will be available in the human resources department.
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Locate the number of people who quit, were fired or laid off throughout the last year. The turnover rate does not take into account people who retired.
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Divide the number of people who quit, were fired or laid off by the total number of employees. The equation reads:
Employees Lost / Total Employees = Turnover Rate
As an example say a company who had 100 workers fired 10, laid off five, and another five quit in the past year. The company's annual turnover rate would be 20 / 100 or 20 percent.
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References
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