How to calculate annual turnover
Annual turnover is an important indicator for companies as it measures employee turnover over a year. It is a metric that can provide insights on employee satisfaction, the efficiency of recruitment and selection processes, and even the financial health of the organization.
What is annual turnover?
The annual turnover, also known as the turnover rate, is the percentage of employees who have left the company in a certain period of time, usually a year. This metric is calculated by dividing the number of employees who left the company by the average number of employees during the same period and multiplying by 100.
How to calculate the annual turnover?
To calculate the annual turnover, follow the following steps:
- Get the number of employees who left the company during the year;
- Calculate the average number of employees during the same period;
- Divide the number of employees who left the average number of employees;
- Multiply the result per 100 to obtain the percentage turnover rate.
For example, if a company had 100 employees at the beginning of the year and 20 employees left throughout the year, the calculation would be:
| 20 | 100 | (20/100) * 100 = 20% |
Therefore, the annual turnover rate of this company would be 20%.
Why calculate the annual turnover?
Annual turnover calculation is important for several reasons:
- Allows you to identify employees’ satisfaction and engagement problems;
- Assists in assessing the effectiveness of recruitment and selection processes;
- may indicate the need for investments in training and development;
- Helps monitor the company’s financial health, as employees turnover can generate costs with contractual terminations and new hires.
Therefore, calculating annual turnover is critical for companies to take steps to improve talent retention and ensure long -term success.
Conclusion
Annual turnover is an important indicator for companies as it measures employee turnover over a year. Calculating this metric is simple and can provide valuable insights on employee satisfaction and internal process efficiency. Therefore, it is essential for companies to calculate the annual turnover and use this information to take steps that improve talent retention and ensure long -term success.