Turnover Rate – The HR KPI for employee turnover

The employee turnover rate is a KPI that is often brought into play when employees leave the company. Below we explain what this key performance indicator is and how to calculate it.

The employee turnover rate is a KPI in the HR and recruiting area that provides information about employee turnover. It shows how many employees leave the company each year. The number of employees who leave is expressed as a percentage of the number of employees at the beginning of the year. This Key Performance Indicator of great importance for personnel planners.

Important: Fluctuation can occur both voluntarily, i.e. on the initiative of the employee, and involuntarily (through termination or expiration of the employment contract).

This question is difficult to answer. The turnover rate depends on various factors, such as industry, location or average age of employees. However, you often come across a turnover rate of 10 percent online, which is said to be "healthy".

The problem with such information is that when it comes to fluctuation, you have to look at WHO is leaving the company. For example, it can have serious consequences for the company's success if a key manager leaves.

When it comes to the question of whether a turnover rate is “good” or “bad,” it is advisable to take a look at the competition and see how high the turnover rates are among competitors.

There are many different approaches to calculating the turnover rate. A frequently used formula is to divide the number of resignations in a certain period by the number of employees at the beginning of that period.

Example: If you start the year with 100 employees and 20 people leave the company during the year, the calculation is 20:100 = 0.2. The turnover rate is therefore 20%.

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