Let's Crunch the Numbers - Estimating the Cost of Employee Turnover
Employee retention stands as a pressing concern for modern businesses. With the workforce landscape constantly evolving and job changes increasingly common, companies must prepare for the costs associated with employee turnover. By understanding the expenses involved in replacing an employee, you can allocate resources effectively and implement strategies to minimize turnover, thereby boosting your company's profitability.
Calculating Turnover Rates
To determine your company's turnover rate, follow these steps:
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Identify the number of employees who depart from your company within a given year.
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Calculate the average number of employees on your payroll during that same period.
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Divide the number of departing employees by the average number of employees, then multiply the result by 100.
This formula yields your company's turnover rate, providing valuable insight into employee retention and potential areas for improvement.