How to Calculate Company Turnover


Company turnover is the amount of employees leaving an organization either by quitting, retiring or being fired. A company’s turnover helps show how efficient a company is at keeping and developing employees. A low turnover shows the company prefers to keep its employees and that the employees at the company prefer to stay with the company. As of April 2010, average turnover rate in the U.S. is 3.1 percent.
Step 1

Add together the number of people who were fired, quit, retired or left the company during the previous year. For example, since the beginning of the year, 12 people left the company.

Step 2

Calculate the average number of employees the company had during the year. For example, if at the beginning of the year the company had 450 employees and at the end of the year the company had 470 employees, then the average number of employees for the year was 460 employees.

Step 3

Divide the number of people leaving the company by the average number of employees. In the example, 12 divided by 460 equals a company turnover rate of 2.6 percent.

About Debaawy
Mohamed AL Debaawy is a Kuwait-based Egyptian national, with a wide exposure to Arabic and Non-Arabic cultures. He speaks Arabic and English – fluently. Result oriented with an influential approach to Learning & Development function. Have a clear contribution into HR & Service Line strategic plans by linking its strategic goals and objectives with the overall HR & Business Strategy which develop a competent and talented workforce; available at all times to feed into the existing operational and growing needs of the business.

One Response to How to Calculate Company Turnover

  1. Abdulhalim Kassem says:

    Mr. Debaawy,

    In case the company successfully replaced all the departing employees, then your method of computing the average number of employees is fallacious for statistical computing.
    The appropriate formula to be used is the following:
    Average number of employees per year = Sum of total number of employees for each pay period / number of pay periods (12).

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