Turn Over Rate
The turnover rate is the specified period during which a certain percentage of employees leave a company. This topic is often discussed in connection with the retention rate, which indicates how many workers are still employed after a certain period. You need to know that the turnover rate is one of the most accurate measures of a company’s long-term success. It enables a comprehensive assessment of the employer brand, recruitment strategies, and corporate culture.
Because a company’s departing employees must be replaced frequently, a high turnover rate can be costly to a company. However, filling available positions can be time-consuming for recruiters or employers, and if key positions remain unfilled for too long, a company may start to function poorly. Therefore, companies should work to reduce excessive turnover rates.
By examining the causes of turnover, turnover rates can be reduced. There are two main types of turnover that can be reduced through better hiring decisions; Voluntary turnover and Involuntary turnover
Voluntary turnover is when employees voluntarily decide to leave their jobs. If an employee is dissatisfied with their job, has received a better offer from another company, or wants to change careers, they may decide to take this step. Conducting personality tests on job applicants is one strategy to determine how satisfied they can be with their jobs. This reduces the likelihood of voluntary turnover.
Involuntary turnover occurs when an employee loses their job. Employees may be terminated for various reasons, including inadequate job performance or inappropriate behavior, often referred to as counterproductive work behavior. Aptitude tests may be administered at the hiring stage to reduce the likelihood that an applicant will not be able to perform the job duties. Personality testing can be conducted to determine if an employee is prone to unproductive work behaviors that could harm the company.
To calculate the turnover rate, divide the total number of employees who quit during a given period (month, quarter, year, etc.) by the average number of employees during that period. The turnover rate can be calculated by multiplying this number by 100.