How do you guys compute employee turnover rate?

[PATSYS]

I assume most, if not all, of us here have encountered a certain key perfomance indicator called employee turnover (or staff turnover). I have seen it a lot and didn't haven't really given much of a thought until it somehow ended up in one of the excel files I am administering. And now I must devise the formula to compute for it.

First of all, what is the correct way of computing it? Is it just flat out the # of employees who resigned/fired divided by average # of employees? If this is so, then it is very possible to have more 100% turnover.

If there are 3 positions in a company, A, B, C and position A has been replaced 3 times in a year, what is the turnover? And will it be different if all 3 position has been replaced but just once?

What if the company is in a liquidation phase, say at the start of the year 2006 it has 300 staffs, then by end of June 2006 it had none (50 staffs resigned per month). What is the annual staff turnover by end of 2006? And what is the YTD staff turnover in each of the months?

I have asked several people in the company I worked in and they have differing opinions.

Would like to hear from you guys.

Thanks

 

[Smitty]

Turnover is generally measured as the staff at the end of a period compasred to the staff at the beginning of a period.

Hee's a fairly simple example:

Book1
	A	B	C	D
1	Employees	Date	Cumulative Turnover	Periodic Turnover
2	100	1/1/2007	0%
3	75	2/1/2007	-25%	-25%
4	115	3/1/2007	15%	53%
Sheet1

Note that some of your hyotheticals may require you to have a pro-forma approach. I.E. can you really consider it turnover if employees have been retasked to another department?

And yes, it is entirely possible to have over 100% turnover. Take a look at many newspapers, who routinely turn over 100%+ of their subscriber base in a given year, or industries that rely on seasonal labor.

Calculating turnover, like any business statistic can be highly subjective...

HTH,

Smitty

EDIT: moved to Excel Questions

 

[PATSYS]

Turnover is generally measured as the staff at the end of a period compasred to the staff at the beginning of a period.

Hee's a fairly simple example:

Book1
	A	B	C	D
1	Employees	Date	Cumulative Turnover	Periodic Turnover
2	100	1/1/2007	0%
3	75	2/1/2007	-25%	-25%
4	115	3/1/2007	15%	53%
Sheet1

Note that some of your hyotheticals may require you to have a pro-forma approach. I.E. can you really consider it turnover if employees have been retasked to another department?

And yes, it is entirely possible to have over 100% turnover. Take a look at many newspapers, who routinely turn over 100%+ of their subscriber base in a given year, or industries that rely on seasonal labor.

Calculating turnover, like any business statistic can be highly subjective...

HTH,

Smitty

EDIT: moved to Excel Questions

Hi Smitty,

Hmmn interesting. Seems we do not have the same understanding of the term "employee turnover". From what it is used as a KPI in the company I worked in, it appears that staff turnover is the a measurement of how often staffs resigned and get replaced. If you have a high staff turnover, it only means many staffs resign from the company and as such it is a signal to the HR to review compensation package in order to retain staffs.

Having more than 100% seems to me means you have replaced more staffs than there is a number of available positions.

 

[gardnertoo]

If you have only one job position with any changes, but it changes several times, someone probably ought to review the job description and compensation package anyway. Suppose Ann the widget-maker leaves and is replaced by Bob, who leaves after only a month to be replaced by Carl, who then leaves and is replaced by Debbie: even though your year-end and year-start numbers are the same, you still want to take a hard look at the widget-maker's pay and duties to see why you have 300% turnover at that position. What's driving people out?

To look at it another way: it's just as costly and disruptive to replace the widget-maker three times as it is to replace three different positions once each.

 

[Andrew Fergus]

Hi

IMO the staff turnover would be the number of resignations for the period divided by the number of positions at the start of the period. So, as pointed out by gardnertoo and pennysaver, the turnover can be > 100%.

Andrew

 

[Domski]

Hi,

If it is truly a key performace indicator used by the company I would expect them to provide guidance on how this is calculated to maintain consistency. If this is not the case then this is the basis I use for calculations if it's any help:

- The numerator is the total number of permanent and temporary employees who have terminated their employment. If an employee has more than one job each job terminated is counted once.

- The denominator is the total number of employees (permanent and temporary) calculated by a head count (a part time employee counts the same as a full time employee).

I would be very,very concerned if the figures approached anywhere near 100% although I appreciate it is possible and could occur in certain industries.

Dom

 

[hatman]

I just did quick Google Search, and found this article/discussion regarding tornover claculations. It may also be helpful.

you still want to take a hard look at the widget-maker's pay and duties to see why you have 300% turnover at that position. What's driving people out?

Oh man, I just have to share this tidbit from WTF in August... I still have to laugh...