How to calculate good turnover versus bad turnover

Calculate Employee Turnover

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:

  1. Categorize all employee departures over a set timeframe as either voluntary resignations or involuntary terminations.

  2. Divide voluntary resignations into regrettable (high performers you want to retain) and non-regrettable (low performers, poor culture fits).

  3. Calculate your total voluntary turnover rate with the formula:

  4. Number of regrettable voluntary resignations / Average number of employees over set timeframe x 100

  5. Calculate your involuntary turnover rate with:

6.  Number of terminations / Average number of employees over set timeframe x 100

7Add 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