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Employee Turnover

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HR Glossary

Employee Turnover

What is Employee Turnover?

Employee turnover refers to the number of employees that leave the company and are replaced by new employees. 

It may be voluntary or involuntary. Usually, it is measured on a yearly basis. 

There may be several reasons for employee turnover and has a mixed impact on the company.

How do You Calculate Employee Turnover?

It can be calculated by-

Dividing the total number of employees that left the company in a month to the average number of employees in a month.

Employee turnover rate is calculated by multiplying the resulting number by 100.

For eg: In a company ABC Ltd. the average number of employees in a month are 200 and 50 employees leave during that month.

Employee turnover would be-

50 / 200 x 100 =  25%

The employee turnover rate in the above example would be 25%.

Voluntary Turnover vs Involuntary Turnover

Employee turnover can be majorly divided into two sub-categories i.e. voluntary turnover and involuntary turnover. 

Voluntary TurnoverInvoluntary Turnover
Employees leave willinglyEmployees leave forcefully
This might be due to workplace conflicts, better opportunities. This might be due to poor work performance, layoffs.

The basic difference between voluntary and involuntary turnover is-

  • Employees leave willingly under voluntary turnover
  • Employees are forced to leave under involuntary turnover

Causes for Employee Turnover

There are several causes for employee turnover, some of them are-

  • Toxic work environment- Employees may leave if they feel their work environment to be toxic.
  • Better Opportunities- Employees may leave if they get a better job opportunity in another company.
  • Involuntary Turnover- Employees are made to leave by the management due to layoffs or poor performance.
  • Workplace differences- Employees might leave if they develop some differences in their company.
  • No Scope for Development- Employees might leave if they feel that there is no scope for their career development in this company.

How to Reduce Employee Turnover?

Here are some ways to reduce employee turnover-

Offer Competitive Salaries

Most of the employees leave a company due to better financial benefits. Offer the best salaries of your industry to your employees.

Employee Recognition

Employees need to be appreciated for their work. Start an employee recognition program such as employee of the month. It boosts the morale of everyone in the company.

Flexibility

Providing flexibility to employees is a sign of trust in their abilities. The modern-day workforce prefers to work on their own timings. You should offer your employees a flexible work schedule as long as they get the work done.

Provide Growth Opportunities

You should focus on providing growth and development opportunities to your employees. No employee would stay in a company where they feel there is no scope for their development.

We hope you liked this blog. For more interesting blogs;

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