The percentage at which employees leaves a company within a certain period can be referred to as company turnover rates. The rate at which an employee leaves a company could lead to a high turnover of the company which could be costly.

Companies turnover rates most times have a negative implication or the other way round. For instance, when an employee is performing poorly onto heor she was later laid off in that process and replaced with someone who is motivated and excels at their job to which the company productivity can soar.

Companies turnover rates are been minimized by analyzing the effects that lead to the turnover in the first instance. The turnover rates of companies are been categorized into two kinds which are voluntary and Involuntary turnovers.

In respective of the company, Voluntary turnovers refer to the willingness shown by an employee to vacate his or her position because he or she has gotten a job elsewhere.

While Involuntary turnovers refer to the laying off employees due to poor performance in the company or reductions in the companies workforce in it affects the financial operation of the company. This involuntary turnover affects the company when compared to voluntary turnover.

This article aims to explain the following features: The grounds for calculating company turnover, how to calculate the average turnover rate of a company, why do you need to calculate the company turnover rate and lots more.

The Grounds for Calculating Company Turnover Rates

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Calculating the company turnover rates is as important as fueling your car consistently so as to avoid catastrophic situations. For instance, Company with 2-20 employees size, the turnover rate can have vital costs to the company whenever an employee leaves for whatever reasons or the employee have an interest in a new profession.

In as much for you as a manager or entrepreneur, consider the following ground for calculating the company turnover rates and likely tips that could help reduce the turnover.

Absence of growth opportunities

Professionally, getting stuck at a point you meant to make progress most time are disturbing. Most employees search for progression in their company but the discouraged employees ultimately lead to economic losses for the company.

The least you expect to happen in your company is discouragement which means impassivity and demotivation. This could be avoided by setting up an environment with growth opportunities on to which your employees train for their personal growth, along with tools that help them develop their skills. Notwithstanding, acknowledge your employees by giving them benefits and promotions.

Undesirable Salary

Most times, a competitive salary is used to keep up with other companies so as not to lose employees to the competitors which are referred to as Voluntary turnover. In these cases, devise a way in which you reward your employees by given then emotional salary, sponsoring them on a development course and the likes

Inadequate Management

In cases where the company management is inadequate, it could result in a high turnover rate and that’s very bad. It can simply be avoided by following the hierarchical system in which most companies follows, with these the company uses an organisational chart in managing the company adequately. Adequate management would help the employees interact within the hierarchical system and also know their responsibilities.

Noxious Work Environment

An environment that is tuned up with a quarrel and bickering is a great excuse for an employee to hit the exit door of the company. Working in a noxious environment is not an option for an employee because it destabilizes them. The more the work environment of a company become noxious the greater chances of having a high turnover rate.

Earning your employee’s loyalty is all that matters if you are to have a favourable working environment, make them feel integrated, sustain the atmospheric temperance and understanding. At least, an employee spends a third of their day working in a bad mood which might lead to a high turnover rate.

How to Calculate Average Turnover Rate of a Company

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When calculating a company average turnover rate. First, you have to the figure for incoming and outgoing employees in your company in a given duration of time. For example, looking at a company with 100 employees which had lost 15 employees(Voluntarily and Involuntarily) and had hired 40 employees, the turnover rate is %.

it is calculated by dividing the numbers of who left the company by the average number of employees in the company at that given time.

NOTE: the average number of employees in the company is calculated by adding the number of employees that are present at the company and the number of new employees and dividing the result by 2.

The mathematical formula goes thus:


Explanation of the above example goes thus: we had a total of 15 employees who left the company, a total of 100 employees present with the company(Employees at the beginning) and a total of 40 new employees(Employees at the end). Then after putting values with an average turnover rate of 21.4% on to which it is a low turnover rate.

Causes of High Turnover Rate

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In 2000, all existing literature on employee turnover was combined with the expertise of three scientists. The literature resulted in a meta-analysis of over 60,000 employees and from these they arrived the following causes oh high turnovers of employees. The causes are:

  • Stress
    • Employees end up living their jobs due to the highly stressful working environment.
  • Demographics
    • This one of the strong indicator of turnover plans. Mostly, married employees with children are less likely to leave than employees with a single status.
  • Job Content
    • Employees experience comes to play in these contexts, where the level of routine sets in with the current job(Lots of routine proceeds to high turnovers rate) and the possibility for progression.

Ways In Reducing High Turnover Rates of a Company

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It is important for you as an HR or Manager to know to reduce a company or employees turnover rates. 2 ways in which you can reduce high turnover rates are detailed in the following paragraph:

  • Accustom your Hiring Strategy
    • For you to accustom your hiring strategy involves so many factors in which they are easily justified. just to give an idea on how it should consider these factors respectively which are Sourcing, Job adverts, and Preselection.
  • Advance Competitive Deal
    • Optimizing your hiring strategy is all takes in presenting a competitive package like you being to offer them flextime, holidays, insurance benefits, free launch and soon.


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Furthermore, knowing your company turnover rate will have a big impact on your employees and your company as well. But to something certain is that, Low turnover rate is mostly recommended for a company that chooses to be on the productive path, companies with high turnover rates tend to be less productive.

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