What is a turnover rate?

Let's start from the beginning. Turnover rate is a metric used by Human Resources (HR), used to monitor the value of various HR initiatives undertaken by a company. Turnover is, in essence, the act of replacing one employee with another.

What is Functional turnover?

Functional turnover reduces the amount of paperwork that a company must file in order to rid itself of a low-performing employee. Rather than having to go through the potentially difficult process of proving that an employee is inadequate, the company simply respects their own decision to leave.

How do you calculate a first-year turnover rate?

Divide 3 (number of employees who left) by 32.5 (the average # of employees) = 0.0923 To calculate the first-year turnover rate for new hires, use only the number of separated employees who worked at the company for less than a year. Replace the average number of employees with the total number of separations for one year.

What is involuntary turnover?

The second is involuntary turnover, which happens when an employee is terminated by the employer, usually because an employee consistently underperforms, undermines the productivity of their colleagues, no longer upholds the organization’s core values or detracts from the company culture. What is turnover rate?