Employee turnover refers to the number or percentage of workers who leave an organization and are replaced by new employees. This includes any employee departure, such as resignations, layoffs, terminations, retirements, location transfers, or even deaths. Measuring employee turnover can be helpful to employers who want to examine reasons for turnover or estimate the cost-to-hire for budget purposes. Employee turnover is a major concern for businesses of all sizes. Businesses often calculate their employee turnover rate to predict its impact on productivity, customer service or even morale.
The U.S. Bureau of Labor Statistics (BLS) also calculates employee turnover at a national level. To calculate the monthly employee turnover rate, businesses use three numbers: the numbers of active employees at the beginning (B) and end (E) of the month and the number of employees who left (L) during that month. You can calculate your average (Avg) number of employees by adding your beginning and ending workforce and dividing by two (Avg = [B+E]/2).