Employee turnover rate is a critical metric that every company should know and understand. 

The staff turnover rate allows the company to know how it is renewing its workforce. This indicator also reveals the quality of your human resources management .

If you are interested in this topic, I recommend that you continue reading to find out what it is, why it is important to track this indicator.

What is employee turnover rate?

The employee turnover rate is one of the Human Resources metrics that marks the rate at which people leave the company. Employees come and go, so it is practically impossible for this index to be 0. However, it is good to keep employee turnover as low as possible. 

This rate alone cannot explain the frequency of employee departures or the arrival of new workers. The labor market is different in different sectors.

Although turnover is a term widely used in everyday language, human resources managers actually calculate the company’s staff turnover rate over the course of a year.

This turnover rate is a strategic indicator for the company, since it reflects the health of your organization.

It is important to know how to interpret this indicator in a precise context and according to the factors identified. Indeed, the turnover of a company can depend on:

  • the number of employee dismissals,
  • the number of new workers arriving,
  • the abundance or scarcity of labor,
  • working conditions,
  • the policy of the Human Resources area,
  • the social climate,
  • the growth of the company,
  • the sector of activity,
  • the economic context,
  • the environmental context,
  • the political and legislative context,
  • the disappearance and appearance of jobs,

Importance of monitoring the staff turnover rate

Turnover and retention must be calculated by the human resources area. It is your responsibility to find out what the rate is, why it is high, and find the best solution if you detect a problem. If you keep an eye on this rate, you can detect the beginning of problems in your company. 

Here are some reasons why it is important to know your employee turnover rate:


Without a doubt, the employee turnover rate, like the customer turnover rate , is expensive. Retaining your employees is much cheaper than hiring and training new ones. If your retention rate is low, this can cost your company a lot. 

The rate is usually calculated over a period of time as an annual turnover rate. This takes into account the natural loss of personnel.

Indicator of other problems

A high employee turnover rate also indicates low employee satisfaction and commitment. These problems have other consequences, such as low productivity that can make it difficult for your company to achieve its goals.

A bad employee turnover rate can be a warning that you need to find out what’s going on.

Healthy turnover rate

An organization must experience some personnel turnover. Not only is it natural, but new people bring new ideas and enthusiasm.

They can also bring more diversity and skills to the company. Therefore, although excess turnover is costly, it is not all bad.

What causes employee turnover?

Employees who leave do so for many different reasons. Maybe they’ve gotten a better job, left to start a family, or decided to change careers. These are all voluntary reasons. But there can be both voluntary and involuntary reasons. 

Here are some of the main reasons for employee turnover:

Lack of opportunities

When people leave the organization to look for another job, it is not always about the treatment or role you are giving them, many times they feel like they are getting nowhere, they may feel unhappy and decide to leave.

Poor personnel management

One of the most common reasons for leaving a job is the manager. A bad manager can affect more people on a team than you think.

If the manager is disorganized or difficult to deal with, this has massive effects on the people who work for him. One team can become unproductive, which can affect all the other teams.

Poor cultural fit

Each person has their own expectations about the work environment. Perhaps a person likes to listen to music while working, but it may be that the company culture does not allow it during the day, if this is the case, be very careful; Company culture can have a big impact on employee turnover.

Lack of training or resources to work

Another reason why people leave a position is that they are simply not given the resources to do their job, for example when they have to use some digital tools. 

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