Everyone faces turnover at some point. Knowing your turnover rate enables you to properly manage your labor capacity by taking action to address your labor needs.
Veryable provides an on-demand labor marketplace so that manufacturing and logistics companies can find workers for incremental work instead of worrying about turnover rates.
The focus of this page is to give you a quick way to calculate turnover and introduce a new solution to this ever-present problem.
Employee turnover rate calculator
Employee Turnover Rate Formula
The formula for calculating employee turnover rate for a given period of time is:
To get the percentage of turnover, you take the number of people who left your company during a period divided by the average headcount for that same period and multiply it by 100.
It is possible for your turnover rate to be more than 100%. This means that you replaced your entire workforce during that time period. As a general rule of thumb, a turnover rate higher than 20% is a sign that something is probably wrong with your work environment. That means that more than one out of five people who work with you don't want to be there.
As we note below, there will always be some employee turnover. The culture of work is different today than it was when workers got a pension and retired with a new gold watch. People want to work on their terms, and they often hop from job to job to secure better pay and more flexible arrangements. Businesses need to adapt if they want to optimize their labor capacity.
How to reduce employee turnover rate
You know being short on labor capacity is less than ideal. So how do you fix it?
There are many ways to reduce turnover in a manufacturing business. Often you will hear the advice to invest more in your HR department or focus on attracting employees who are more likely to stay.
No matter which method you choose, the fact remains that attrition will always be a problem. What if, instead of trying to constantly triage employee turnover, you found a way to go with the flow?
Going with the flow is exactly what on-demand labor allows you to do. Instead of constantly fighting to backfill attrition only to get staffed to your average and still be inefficient, you can flex your labor capacity in real time to adjust to demand.
By matching your labor capacity in real time to demand, you'll be operating more efficiently. And you get to keep the full-time employees who stick around. They'll likely be glad they aren't pulling double shifts and working overtime any more.
Learn more about how on-demand labor is the flexibility you need to quit worrying about turnover and start impressing your customers.