What is turnover in an organization?

Question

What metrics can be used to measure turnover? Why is it important that turnover be measured?

Answer 1

Turnover is usually the number or percentage of an organization that leaves the company during the year (through firings and resignations, etc.) It's important because it can be used as an assessment of happiness or the morale of workers and it can also be used to measure the level of competition in the market.

Answer 2

The formula for turnover is the number of terminations in a given period divided by the total number of employees. (Example, if you had a total of employees and 10 left, you would have .1, or 10%, turnover.)

You can measure turnover in terms of voluntary vs. involuntary terms (quits vs. fired for cause.)

It is in many respects a measure of employee satisfaction with the company and their work environment. You need some stability in the workforce in order to ensure consistent processes and training. High turnover costs money which must be spent to recruit, hire, and train replacement employees.