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When a company hires new employees, it often happens that a certain number of them quit the organization within the first year or so. A new hire turnover helps employees gauge their own performance in the complete hiring and onboarding of new employees process. A timeframe is set beyond which, if a new hire stays, it is considered a success. In general, if a new hire stays with the organization for a period of 2 years or more, then this is taken as a success for the employers.
Depending upon how many new hires stay or leave a company, the organization can find problem areas. If too many people are quitting early, it could reflect negatively upon the company and would be a statement on the work culture, company policies, as well as the overall environment of the company.
There is a certain formula that helps in calculating the new hire turnover for every company. Before calculating the new hire turnover, employers must set the period for which they are calculating. Whether a year, a working quarter, or a month. After this, they can divide the number of employees who quit in this duration by the number of employees who worked for the company during this duration. The number must then be multiplied by 100 to get the exact percentage of new hire turnover.
If the company turnover in terms of new hires is worse than expected, then it would reflect that companies need to make some serious changes in their working methodology or the company culture as a whole.