No company is exempt from the facts: all businesses will experience some degree of employee turnover. Replacing lost employees requires a great deal of effort from recruiting qualified candidates, to conducting interviews and training new hires. This costs the company valuable time and money, not to mention taking its toll on employee morale. It is vital for anyone in a management position to understand turnover. Managing turnover will keep their own business’s rates low compared to industry and competitor averages. According to SHRM , in a study conducted by the Tennessee-based Work Institute, more than 77% of employees who left their position could have been retained.
Fortunately, calculating employee turnover is simple. It’s the ratio of total employee separations, including voluntary and involuntary, to the average number of active employees. You can effectively measure your own company’s annual employee turnover rate by following these simple steps.
Add up the monthly employment for the previous 12 month period, and then divide by 12 to find your average monthly employment. Depending how frequently you pay your employees, you will also want to add in the number of deposits for each payroll and divide by two to determine the average employment for a given month.
Find the total number of employee separations for the previous 12 months. You may add separations for an accounting period, such as a quarter to project the total for the year. However, remember that this allows for the possibility of skewed results due to variations in seasonal employments and layoffs.
Determine your annual employee turnover rate. This will be the ratio of the total number of separations to the average monthly employment for the previous 12 month period in percentage form.
Although it is imperative to accurately measure employee turnover, it is not difficult to do. While turnover can be costly, many strategies exist for managing it before it becomes an issue. Staffers, Inc. prides itself on helping companies keep turnover rates low by hiring the best Jackson area job candidates, setting competitive compensation packages, promoting positive company cultures, and providing clear paths for career growth. For additional strategies on decreasing employee turnover rate in Jackson, Mississippi, contact Staffers, Inc. today!