Turnover Calculation How-To
Our HR experts have taken a good chunk of time to help employers understand that there is good turnover and bad turnover. You should track both, but for retention and management analysis purposes, you really want to know the rates of bad turnover and then identify how to stop the leak of harmful turnover.
Here is a step-by-step guide to tracking and calculating harmful turnover correctly:
Categorize all employee departures over a set timeframe as either voluntary resignations or involuntary terminations.
Divide voluntary resignations into regrettable (high performers you want to retain) and non-regrettable (low performers, poor culture fits).
Calculate your total voluntary turnover rate with the formula:
Number of regrettable voluntary resignations / Average number of employees over set timeframe x 100
Calculate your involuntary turnover rate with:
6. Number of terminations / Average number of employees over set timeframe x 100
7. Add regrettable voluntary turnover + involuntary turnover to determine your overall harmful turnover rate.
Factor in rehires of boomerang employees you want back to understand the full context.
Set a benchmark for maximum desired regrettable voluntary turnover (ex. 10% annually) based on your culture and industry.
Develop initiatives to reduce harmful turnover types based on exit interview insights and management feedback.
Continuously track turnover rates to identify patterns, demonstrate progress, and refine retention efforts.
This stuff can be tough. Let us know if you would like help walking through sample turnover calculations or need assistance developing reporting templates to track your organization's turnover effectively. Consistent, segmented tracking provides the foundation for strategic retention.
You can use our convenient turnover cost calculator to analyze just how much your turnover is costing you.
If you want to know more about turnover and how to fix it, check out our Ultimate Guide To Employee Turnover
Joseph Campagna, SPHR, SHRM-SCP is president and owner of My Virtual HR Director, a human resources outsourcing company serving small and medium sized businesses nationwide. My Virtual HR Director provides an executive level HR advisor to companies that can’t afford or can’t justify hiring a fulltime HR professional on staff.
With twenty years of experience dedicated to the HR profession, Mr. Campagna has honed his skills as an expert in compliance, talent management and employee relations. Bringing human capital management experience from start-ups, IT and biotechnology companies, employee leasing, and fortune 100 behemoths Mr. Campagna has filled his tool belt through generalist work, executive positions, and consulting opportunities with companies such as ADP, Merrill Lynch, and Johnson & Johnson. As Vice President of HR for biotech company Hemo Concepts, as well as the head of HR for the global IT solutions company, the Galaxy Group, Mr. Campagna created rich and successful organizational development and employee engagement programs.
Having worked with a diverse group of companies and clients in a broad spectrum of industries and environments, he brings a unique HR philosophy to every organization he works with. “HR is not the picnic department,” he says “but instead bears the full responsibility and the unlimited potential for a highly productive and efficient workforce. If HR systems are successful, the organization’s revenue should be increased.” From mergers and acquisitions, to IPO’s, to new product development, to divestiture Mr. Campagna has a true business background to support his HR Architecture.
Mr. Campagna is certified as a senior professional through both the Human Resources Certification Institute (HRCI) and the Society for Human Resource Management (SHRM). The HRCI designation of Senior Professional in Human Resources (SPHR) is an experienced-based examination certification. The SHRM certification is a competency based examination certification. Each is a premier designation in the world of HR and recognized by the Society for Human Resource Management of which Joe is a national member and former chapter president.
Mr. Campagna brings decades of helping small and medium sized businesses create HR structures such as employee handbooks, performance systems, talent management, training programs, and employee engagement. He knows how to deliver business results through HR aligned objectives.
Nearly 30 years of expertise and HR executive authority combined with a group health insurance license and certifications from the Society for Human Resource management and the Human Resources Certification Institute have given Joseph Campagna the guru status that has earned him leadership roles, board of director roles, and speaking engagements related to human resources.