KPIHuman Resources

Employee Turnover Rate

Percentage of employees who leave the organisation in a given period

What is Employee Turnover Rate?

Employee turnover rate is the percentage of employees who leave in a period, relative to average headcount. It shows how quickly the workforce is changing.

Some turnover is healthy, but high turnover is costly and disruptive, so it is one of the most watched people measures.

How this KPI is measured

Function
Human Resources
Sub-function
Talent Retention
Industry
All Industries
Type
Lagging
Impact
People
Unit
%
Measurement frequency
Monthly / Quarterly
Formula
(Number of leavers / Average headcount) × 100

How to calculate it

Divide the number of leavers by average headcount, and multiply by 100.

For example, if 120 employees left in a year and average headcount was 800, turnover is 15%.

Split into voluntary and involuntary, and by department, role and length of service, since the causes and cost differ.

Where it is used

  • Monitoring workforce stability

    Track leaving.

  • Finding problem areas

    Compare teams.

  • Planning recruitment

    Estimate hiring needs.

How to improve it

Tips and common mistakes

  • Not all turnover is bad. Losing low performers can help.
  • Use average headcount in the denominator.
  • Compare with your industry and role mix.

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