Employee maintenance and turnover rate estimation

Employee maintenance and turnover rate estimation


The entire job and professional ecosystem worldwide has suffered a significant setback due to the COVID-19 pandemic. While economies of scale and multiple large corporations have succumbed to this unprecedented depression induced by the pandemic, certain other governments and authorities are trying their best to reverse the situation and fortify the workers’ condition.

In this regard, learning about employee maintenance and estimating an employee turnover rate could prove beneficial for organizations. So let us do that in detail.

Employee turnover:

Employee turnover can be broadly defined as the loss of talent in an organization due to different reasons. The reason includes termination due to non-acceptable behavior, layoffs, and deaths of the employees. However, employee turnover should not be linked to employee attrition. Attrition refers to the loss of employees due to natural causes such as resignation, withdrawal, and existing health issues. Unlike traditional turnover, the company suffers a loss of filling up the open position when an employee departs.

Employee turnover has two faces- it can be both voluntary and involuntary in nature. Voluntary employee turnover can be termed as an employee leaving a job willingly. But an involuntary employee turnover can be due to termination of the employment contract.

How to estimate a company’s employee turnover rate?

Calculating the turnover rate in any organization is one of the critical functions of a human resource department. Monitoring the employee’s movement in a company is essential as it reduces the causes of turnover. Minimizing the turnover rate is the most effective way that can maintain employees in a company.

●     Staff turnover cost can be calculated by reviewing the average number of employees who leave the company during different intervals in a year.

●     A company needs to monitor the turnover rate so that they can address the reasons which have led the workers to leave the job.

●     Employee turnover cost calculation is an essential step in evaluating an employee’s risk of leaving a job position. Moreover, it also helps in finding new ways of employee retention and recruitment.

●     A formula can be used to calculate the average number of employees and turnover rate of any organization.

●     The average number of staff members in a company can be calculated by the total number of employees hired at the beginning of the period and adding it to the total number of employees recruited.

●     Further these two numerical by figure two will provide the average number of employees working in any company.

●     Turnover can be calculated by using yet another formula. Employees who left their job position divided by the average number of staff members multiplied by 100.

●     Turnover = (Employees who left their job ÷ the Average number of employees) x 100.

Importance of tracking employee turnover in a company:

Tracking and monitoring employee turnover help identify different causes for turnover and allows an organization to recognize employee retention options. According to a renowned business owner and an acclaimed professional named Ellen Mullarkey, a high turnover rate negatively impacts the company. Further, if the HR department has to recruit employees several times a year, the process can be expensive and time-consuming.

The method of hiring new employees for an open position is not cheap. Hence it should be planned systematically so that cost of recruiting can be reduced to a more considerable extent. The co-founder of a Choosing therapy company described two types of employee turnover in any organization.

Good Employee turnover:

Certain employees who tend to leave a job position for a promotion can be included in good employee turnover. Further, some employees also join a company to enhance their performance in business areas. Such employees also come under good employee turnover. Every business owner strives to provide an excellent reputation to its company so that employees can learn and shape their careers.

Bad Employee turnover:

Every organization has both positive and negative impacts on its employees. Bad employee turnover is among the adverse effects that an organization can exhibit towards its employees. Bad employee turnover can be defined as a condition where a highly trained and talented employee leaves a job position due to lateral reasons. Reasons accounting for a bad employee turnover could be a terrible working environment and less payment as compared to market value. Moreover, it is suggested to check the employee turnover cost calculation annually because if this rate is more than 15 %, then there is an urgent need for an organization to review its culture and compensation plan.

How to examine the turnover rate?

There are various ways that can be adopted to check the employee turnover rate in any company. Some companies choose a manual method of tracking the turnover rate, while some select the method of human resources outsourcing. Irrespective of any technique that a company adopts, the goal of its turnover should be loud and clear.

Employee turnover is an effective tool in determining employee satisfaction. High employee turnover is a clear indication of low employee satisfaction and vice-versa. A reputed company constantly works towards an employee’s morale and satisfaction. An organization should focus on building an environment that is positive and keeps an employee growing. For proper analysis of employee turnover, it is necessary to use a benchmark turnover rate that can help determine the progress yearly.

What does a company’s turnover rate imply?

The employee turnover rate of any company suggests the risk of employees leaving the company for various reasons. Further, it also helps determine employee retention opportunities when new employees for the open positions are hired. It is essential to focus on a company’s compensation plan as it helps in monitoring the working environment and culture simultaneously. Employee retention is a necessary step that should regularly improve to enhance the growth and development of a business.


Employee’s turnover rate can be reduced if a company encourages open communication and recognition of its workers. Further, career development and training also play an integral part in minimizing the employee’s movement rate. Effective open communication between employees and employers tends to increase the job satisfaction level. Moreover, every employee expects reward and recognition for performing well throughout the year. Hence, bonuses and incentives should be offered to all deserving employees to reduce the employee turnover rate. An incentive also helps in increasing the employee retention rate, which is essential for a company’s success.