How to Calculate Turnover Rates

Labor turnover (LTO) rate is the ratio of the amount of employees who stops working for the company, either by resignation or lay-off, to the average total employees in a period of time.

Turnover rate can be calculated on a monthly basis or yearly basis, depending on the company budget period. Here is the formula for the monthly turnover;

LTO =    employees out   x 100

employees average

Example:

If 8 employees resigned and 2 employees were fired in the last 3 months, while the monthly average of the amount of the employees is 100, so the turnover rate is 10%.

LTO =  (10 x 100) x 100

LTO = 10%

Turnover is commonly used by HR managers to track their employment performance. A very high turnover rate shows that many employees are not comfortable with the company or that there is something wrong with the recruitment process. A very low turnover rate shows that the career development and the organisation growth are not really competitive.

To maintain a healthy turnover rate requires time, concentration and sometimes money. You don’t want to be overwhelmed by less strategic tasks such as regular payroll, leaves approval and attendance report. Use an HR system like HReasily now to automate the HR manual processes. Book a demo with us by clicking the link below.

*written by Puja Altiar for Startup HR community, organised by HReasily

About Riesintiya Aska

Tiya is an experienced Customer Service and Sales Consultant with a demonstrated history of working in the marketing and customer service industry. Skilled in People Development, Customer Service, Sales, Lead Generation, and Marketing.

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