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The productivity of an organization is highly defined by the number of employees in it. Employee turnover is used to determine the number of employees in an organization who either quit, were replaced or asked to leave.
Employee turnover he’s generally on a yearly basis in most of the organizations. No matter how the employee left the organization or they were fired and they left themselves, their absence directly affects the productivity rate of the organization.
When the employee turnover rate he’s less, it is not always a bad thing. Because, most of the time the employees that left are placed by new employees. although, this transition does affect the overall productivity base of an organization.
In this article, let us look more into the concerts of employee turnover.
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Talking about employee turnover, it does not always turn out good or bad. If an organization uses its best performing employees, it will affect the performance of the organization in a negative way. Whereas, when an organization loses its underperforming employees, places them with new talent, the results might as well turn out to be positive.
Let us look at how you will calculate employee turnover rate in your organization.
monthly employee turnover rate means the following three measures:
Now, calculate the average number of employees like so:
Avg.= AEB + AEE/2
Example: there were 100 active employees at the beginning of the month and 84 active employees at the end of the month. the average it will be calculated as,
Lastly, forward the monthly turnover in percentage, you shall use the following formula:
For 3 employees left,
Monthly turnover % = 3/92 x 100
Your monthly employee turnover is 3.26%
Most of the time, organizations prefer to calculate the employee turnover rate on an annual basis. For doing so, the process is as follows.
Example: You have 100 employees at the start of the year and 125 at the end of the year while 5 employees left during the period, your annual employee turnover can be calculated as:
Annual employee turnover rate % = [5/(100+125)/2] x 100
= [5/(225/2)] x 100
= (5/112.5) x 100
= 0.04 x 100
Your annual employee turnover rate is 4.44%
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As discussed earlier an organization can lose employees that are underperforming as well as the good ones. Hence come on you need to identify which employees are leaving so that you can take necessary actions. An organization can make efforts in retaining the good employees or choose to let them go if they are the underperforming ones. A survey needs to be performed to identify which employees are leaving and then take necessary measures depending on the situation which will directly affect the organization performance.
The timing of employee departure is also important for understanding employee churn. If the employees are leaving some days after joining, you should take a look at your onboarding process and job description etc. If the employees that worked with an organization for years decide to leave, there might be an issue of less career opportunities, less engagement, lack of employee benefits, etc. Understanding these reasons will help you repair your employee processes.
There might be various reasons for an employee to choose to leave an organization. it might be poor management, superiors, lack of engagement, employee processes, and so on. It is crucial that you get to the root of these reasons and act upon them as soon as possible to prevent future employee departures.
We have developed a guide which gives you an all around view of customer loyalty