Turnover Rate

What Is Turnover Rate?

If you work in the restaurant business, you’ll probably know that turnover rate is related to how quickly your tables empty and fill back up in the shift duration.

In the broader business sense, turnover rate has a slightly different definition.

Turnover rate – or employee turnover rate – is defined as the number of people that leave a business over a given time period. This can include:

  • Resignations
  • Dismissals
  • Retirements
  • Non-certifications

How Do You Calculate Turnover Rate?

If you want to calculate the turnover rate for your business, you will need three numbers:

  • The number of employees at the beginning of a month (or another time period). We will call this A.
  • The number of employees at the end of a month (or another time period). We will call this B.
  • The number of employees who left during the month (or another time period). We will call this C

You now need to work out the average. Average = (A+B)/2.

Next, you need to divide the number of employees who left by the average number of employees. Finally, multiply this by 100 to get your final turnover rate percentage. ((C/Avg) x100).

What Are the Most Common Reasons for a High Turnover Rate?

No matter what business you’re in, how successful you are, or how great your company culture is, you will lose staff.

But what are the most common reasons for high employee turnover?

  • No progression – employees cite progression (or lack thereof) as one of the main reasons for leaving an organization.
  • Being overworked – no one likes the feeling of being overworked. Make sure you keep an eye on the workload of all your employees and that it’s kept manageable.
  • Lack of feedback or recognition – employees need to know that they are valued, that their opinion is valid, and that their work is appreciated. Make sure you have an active feedback and recognition loop – otherwise, you could lose your best staff.


See our full list of over 50 Small Business Terms here


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