Turnover measures workforce churn as employees leave and are replaced. High turnover increases costs, disrupts operations, and may indicate organizational problems. Understanding turnover patterns helps address underlying issues.
Calculating Turnover
Turnover rate equals employees who left during a period divided by average headcount, usually annualized. Different calculations may count only certain departure types. Consistent methodology enables trend tracking and benchmarking.
Turnover Costs
Turnover costs include recruiting and hiring expenses, training and onboarding time, lost productivity during vacancy and ramp-up, knowledge and relationship loss, and potential impact on remaining employees. Costs vary by role but are typically substantial.
Healthy Turnover
Some turnover is healthy and even desirable. It brings new perspectives, creates advancement opportunities, and allows refreshing the workforce. Zero turnover would indicate stagnation. The goal is optimal turnover that balances stability with renewal.