Employee Turnover Rate | Meaning and Definition

What is employee turnover?

Employee turnover rate is a measurement used to calculate the total number of employees who leave an organization within a specific period of time.

Employee turnover rate can be described as the percentage of employees who leave an organization over a specific period of time. The employee turnover rate consists of two separations, voluntary and involuntary separation.

The voluntary separation includes the separation regarding the retirements and resignations of employees. The involuntary separations include the layoffs due to the organization’s critical financial issues, the employee downsizing, and the dismissal of employees based on their performance.

What is the most common type of employee turnover?

Voluntary turnover – If an employee leaves the organization by their own choice, then they will be put in a two-week notice most commonly. But few employees might not show up or leave the workplace once after submitting their resignation. Such type of employee turnover needs an exit survey in order to identify and understand the cause of voluntary turnover in the organization.

Involuntary turnover – If an organization fires an employee or lets them go, then this is called involuntary turnover.

Retirement – It is otherwise a voluntary turnover. There has to be a replacement when an employee retires from an organization, and this has to be analyzed to determine the organization employee’s turnover.

Internal transfers – Within an organization, if an employee moves to another position or other department, and hence the employee will be still working in the same organization. But the position has to be refilled by the new employee, and therefore, these factors have to be considered when determining the employee turnover rate. 

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