![]() Consequently, Top Paper retained 90 employees. Throughout the course of that year, 10 people left the company (voluntarily and involuntarily) and had to be replaced. Example Calculations for Labour Turnover and Retention Ratesįormulas can be a little hard to digest, so let’s look at a couple of examples to help us understand the labour turnover and employee retention formulae.Ī Leeds-based company – Top Paper – had an average of 100 employees during the calendar year 2020. Their retention rate would be (190/200) x 100 = 95. So a company with an average of 200 employees over the year that lost 10 staff members retained 190 employees. However, you can define any period you like. Most companies calculate retention rates on an annual basis, so the defined period would be from January 1st to December 31st. (# of employees who stayed for the period / # of employees at the start of period) x 100 = retention rate So a company with an average of 200 employees and 10 leavers over a given period would have an employee turnover rate of (10/200) x 100 = 5. ![]() (# of leavers/average # of employees) x 100 = turnover rate Let’s start by reviewing labour turnover: It’s pretty easy to calculate employee turnover and retention once you know the formula. How to Calculate Your Labour Turnover and Retention Rates If you have a low retention rate, you could have problems with morale and productivity, and no doubt high recruitment costs. If you have a high employee retention rate, it’s likely that you have happy, productive people in your team. It also doesn’t take new hires into account. It’s similar, but not the same as labour turnover turnover is about those that leave, whereas retention is about those that stay. What is Employee Retention Rate?Įmployee retention rate is a metric that shows a company’s ability to retain people over a given period of time. Most companies calculate labour turnover on a monthly and annual basis to give them an overview of how well the business is retaining staff. While you might not include this in your overall labour turnover calculations, it’s worth including it in some aspect of your analysis since you will need to fill the role with a new hire. Internal movement: When someone moves to a different role within the organisation, either through promotion or moving to another area of the business.Retirement:This is a type of voluntary turnover, but companies often look at it separately, because the staff member has only chosen to leave due to reaching retirement age.Involuntary labour turnover:When a team member is asked to leave by the company, whether for disciplinary reasons or due to redundancy.Voluntary labour turnover: When someone leaves of their own accord, normally by resigning and working their notice period.Labour turnover is generally divided into 4 types: Labour turnover refers to the percentage of employees who left an organisation during a given time frame. How to Reduce Your Labour Turnover Rate: A Checklist.How to Analyse Your Labour Turnover Rate.Example Calculations for Labour Turnover and Retention Rates.How to Calculate Your Labour Turnover and Retention Rates.
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