Some employee turnover is to be expected when running a business, but how does your company’s turnover rate compare to its competitors’? Knowing your company’s employee turnover rate is vital for assessing the health of your business when it comes to costs and team morale.
In this guide, we’ll break down the formula for calculating attrition, cover how to create a turnover rate report, and discuss three of the best ways to reduce turnover. There’s also a free turnover report template so you can immediately start tracking your company’s workforce growth.
An employee turnover rate, also known as attrition rate, is the percentage of employees who have left the company in a given period. You can use it to quickly compare how your company is doing against the national average, which is 12% to 15% each year.
To calculate turnover rate, take the number of employees who left in a period (during one month, for example) and divide it by the average number of employees working in your company during that same period. Then, multiply that number by 100 to get the percentage.
(Note: A quick way to find the average number of employees during a period is to add the number of employees working on the first day of the period and the number of employees on the last day. Then, divide that number by two.)
Determining the financial cost of employee turnover is the natural next step, but it’s slightly more complicated. Luckily, this calculator does all the heavy lifting for you.
An employee turnover report is simple to create and use. These instructions will walk you through how to create a report in Google Sheets, but they can be easily modified to work in Excel or Numbers.
You’ll need six columns in your report. Label the top of each with the following:
Fill in the name of each month in the first column as well.
Manually input the numbers for the “opening balance,” “employees joined,” and “employees left” columns.
Calculate the closing balance by adding the opening balance and the employees joined, then subtracting the number of employees who left. The formula in your sheet should look something like this:
You can then grab the cell with the formula and pull it down so that it duplicates for each cell in the column. Copying and pasting the cell also works. In either case, the formula will automatically adjust to account for the values in its new row.
Inputting the formula for the turnover column is just as easy. Here’s what the formula should look like if you’re working in Google Sheets:
Given that the employee turnover rate equals the number of employees who left divided by the average number of employees working during that period, the formula ends up being =(D2/((B2+E2)/2)). To get the number in percentage form, select the column, then press the percentage button in the toolbar. This will automatically calculate the percentage and add the appropriate symbol.
As with the closing balance formula, you can grab and drag the turnover rate cell to replicate it for the entire column.
If you find yourself looking at a slightly higher-than-average attrition rate, there are some things you can do to find and retain stellar employees. Many of these will require overhauling some processes at your company, but there are always small steps you can take to get started.
In addition to having the relevant experience and skills, new hires should mesh well with your company’s culture. One way to gauge this is to reflect on your company’s values, then craft interview questions related to them.
For example, at Pingboard we value learning from our mistakes, so we might ask an interviewee to describe an instance when they made a misstep, what they learned from that experience, and what they would do differently next time.
Job satisfaction isn’t only dependent on competitive salaries and benefits. Flexible scheduling, chances to connect with colleagues, and professional development opportunities are just a few of the ways you can increase employee happiness. To make sure the company is on the right track, consider conducting job satisfaction surveys at least once a year to take a “pulse” of what your people care about, need, and want.
With time, every employee will start thinking about what the next steps are for achieving their career goals. By offering promotions and hiring internally to fill open roles, a company can provide its employees with fresh challenges and chances for professional growth, increasing the likelihood that they’ll stay in the long-term.
Tracking employee attrition rates is fairly simple, as is putting some safeguards in place for reducing turnover. Crunching the numbers in this employee turnover report is the first step to knowing where you stand and what, if anything, needs to be done to mitigate turnover and its associated costs.