How to calculate your turnover

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How to calculate your turnover

Table of Contents

Have you heard of turnover? This term is important to understand the development of the company, indicating mainly how are the internal relations and the policies of retaining talent.

In this post, we will explain what turnover is and how important it is for HR and for the growth of the organization, in addition to teaching two formulas to calculate this index. Follow us!

What is turnover?

The turnover, also known as employee turnover, records the dismissal and hiring of workers in a company.

This rate is calculated using a percentage index, which can be used as a metric to understand the internal corporate situation.

>> HR Consultant UK created a digital book that covers everything about turnover and what are the main actions to reduce it! Just you click here and will you access it right now ????

What is the importance of calculating the turnover?

Through the turnover indexes, it is possible to identify problems in the company that can compromise its growth and image, both in the job market and in relation to the competition.

It is with this metric that you can evaluate:

  • The quality of the organizational climate;
  • whether working conditions are favorable;
  • how is the work of leadership;
  • if the salary and benefits are within the margin practiced by the market;
  • whether the workload is within the acceptable range;
  • the quality of selection processes and hiring.

The calculation of the turnover does not indicate exactly the causes of the problem for the high turnover of the company. It works as a thermometer for bigger problems that, if not solved, can bring more serious complications.

It is a tool widely used by HR to understand the workforce and promote improvements in the work environment, in order to achieve greater satisfaction, engagement and productivity.

The ideal turnover rate is below 5%, but this can vary in relation to the type of work performed and its seasonality.

> Below we will explain all the calculations for you to identify your company's turnover. But, we understand that the HR routine is full of processes and setbacks, this way we elaborate a spreadsheet that calculates the turnover. It is very simple to use it. Just add some information and the magic happens! Answer the form and you will receive it right now. Ah, you can download it and share it with other professionals ????

How to calculate turnover rates

Traditional Turnover + Calculator

The most common turnover metric used in the past was one that measures how much movement you had in the period. It is calculated in this way:

calculo-turnover-tradicional.jpg

It is very useful to indicate the quality of contracts. When you need to constantly change workers and therefore the volume of entry and exit of people is high, this can indicate some selection failure.

The application of this metric is even more effective if done by department.

As the nature of the work and the skill of the workers can change a lot from one department to another, it is important to analyze whether it is being pulled by a department that naturally has a higher turnover.

And to make it easier, we provide a simple calculator for you to find out your Turnover Rate. She is right below, find out!

There is also a more modern and simpler way to calculate turnover:

Modern Turnover

Today, it is more common not to consider the number of hires when calculating the turnover. The purpose of the change is to focus only on the departure of employees, focusing on the metric in the so-called “discontent” of employees in relation to the company. This is much simpler to calculate:

calculo-turnover-moderno-post.jpg

This metric is very useful for understanding your ability to retain talent. If the number is too high, it means that you either had to reduce the team a lot, or you have a very serious management problem. It is worth analyzing further and separating by departments to understand where the real problem is.

What are the problems caused by a high turnover?

The calculation of the turnover rate is not only a symptom of problems in the company. It has negative impacts, of which we can highlight:

Expenses with dismissals

Any professional termination represents high costs for the company. In addition to spending on termination rights, the organization must cope with the drop in productivity caused by the vacancy gap.

Costs with new hires

Hiring a new employee to fill the role is also expensive for the company. It is necessary to invest in a new selection process, which, in addition to having its expenses linked, occupies precious hours in the HR department, which could be focused on promoting internal improvements, for example.

We can not fail to mention the amounts invested in new training and adaptation period.

Relationship wear and tear

High rates of dismissal, voluntary or not, affect synergy and engagement among colleagues. In addition to affecting the workflow, the frequent exchange of employees can affect the trust relationship between staff and leaders.

People start to be afraid of their future in the company, which can provoke a movement to search for opportunities, increasing even more the turnover.

Knowledge gaps

An employee learns more and more about the company's mission and values, in addition to know how function, the longer you stay in the organization.

A high turnover rate hinders the development of professionals and work, as new hires are constantly required to relearn the occupation.

In addition to affecting the team's progress, this behavior affects career management and internal succession planning, making it difficult to fill leadership and coordination positions.

Stains on the corporate image

The image that the company transmits to the job market, or employer branding, is important both for hiring the best talents and for this organization to stand out in the face of the competition.

When a professional realizes that the same vacancy is advertised several times within a few months or a year, he realizes that the turnover is high and that the corporation probably has serious internal problems.

This perception prevents him from applying for the vacancy, removing professionals who are really competent and capable of collaborating with the growth of the company.

O employer branding it is an important aspect within the current market and must be nurtured carefully.

Is there an innovative solution in HR to decrease turnover?

We live in a time when HR must take on, once and for all, its multifunctional and strategic side for the qualification of the workforce of its companies.

Often, taking the reins of conditions external to the work environment, but which impact on the professional routine. It is the case of financial well-being for employees.

And as an example of this practice, a new modality reached the UK residents market – wages on demand.

The CareerBuilder survey, conducted in 2017, attested that 78% of respondents are barely able to settle accounts with their salary.

In addition, of the more than 3,000 respondents, about ¾ of them also attested that they have one or more accumulated debts. Clear sign that something needs to be changed, do you agree?

O on-demand salary it is a modality that has been gaining strength in the market and aims to add flexibility so that employees receive for hours worked, but not yet paid. Something that alleviates many of the financial problems – and those generated by the challenges of closing accounts.

Let's look at a simple example: if the company has the habit of making payments for its human resources only on the 30th, or on the fifth business day of each month, professionals are limited to that.

If a pending account is going to earn interest in that period when there is no more money in the account, the debts accumulate. However, with the offer of salary on demand, the professional can receive payment for days already worked whenever he wants. Best of all, he has the flexibility to plan his month.

We recommend that you read this article to better understand on-demand pay. In it you will understand the features of HR Consultant UKy, a corporate benefit of payments on demand.

Now that you know the importance of this metric and are ready to calculate your company's turnover, how about leaving a comment and share with us the analysis of this metric?

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