Calculate employee turnover by dividing the number of separations during a defined period by average headcount for that same period, then multiplying by 100. For example, 20 departures in a month with an average headcount of 1,000 equals a 2% monthly turnover rate. The result is useful only when you also define the period, employee group, and types of departures counted.
What is the employee turnover formula?
Turnover rate = (employee separations during the period ÷ average employee headcount during the period) × 100. The percentage expresses departures in relation to the workforce; it is not a measure of how many people were hired. SHRM’s step-by-step guide uses this core calculation.
Use the same time period and employee population in both parts of the formula. If the numerator counts departures from one department, for example, the denominator should be that department’s average headcount, not the company-wide figure.
How do I calculate employee turnover rate?
- Choose the measurement period. Select a month, quarter, fiscal year, calendar year, or trailing 12 months according to the question you need to answer. Keep it consistent when comparing results. SHRM recommends choosing a period that makes sense for the organization’s purpose.
- Define the employee population. Decide whether the calculation covers the whole organization or a group such as a location, department, job family, or worker type. Set a consistent policy for seasonal, on-call, and contingent workers, and for internal transfers.
- Specify which separations count. Overall turnover can include voluntary and involuntary exits. A voluntary rate counts employee-initiated departures; an involuntary rate counts employer-initiated departures, such as dismissals or layoffs. Label the measure accordingly.
- Find average headcount for the same period. Use a documented method. A simple operational estimate is (beginning headcount + ending headcount) ÷ 2. If headcount changes substantially during the period, use a more granular, consistent average from workforce records instead.
- Divide separations by average headcount and multiply by 100. Record the period, population, separation categories, and averaging method alongside the percentage so future comparisons use the same conventions.
How do you calculate monthly turnover?
Count the separations during the month, divide by average headcount for that month, and multiply by 100. For example, SHRM illustrates the arithmetic with 20 departures among 1,000 employees: 20 ÷ 1,000 × 100 = 2%. Treat that as an illustrative calculation, not an industry benchmark; for an actual report, use the month’s average headcount and state whether the 20 departures are voluntary, involuntary, or all separations. See SHRM’s attrition guidance for the example.
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How do you calculate annual turnover?
For an employer-level annual rate, divide separations during the year by the chosen average annual headcount and multiply by 100. State how that annual average was calculated. Definitions can differ: SHRM describes annual overall turnover using departures during the year divided by average total employees during the year, while the U.S. Bureau of Labor Statistics (BLS) glossary defines annual turnover using annual separations divided by average monthly employment for the year.
BLS also calculates its JOLTS annual average rates by dividing the sum of 12 monthly separation levels by the sum of 12 monthly employment levels, then multiplying by 100. That is a national labor-market statistical series with a defined survey scope, not automatically a like-for-like comparison for an employer’s own workforce. Consult the BLS glossary and the JOLTS news release for those definitions.
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How should you interpret a turnover rate?
There is no universal percentage that makes turnover “good” or “bad.” Interpretation depends on factors such as occupation, industry, geography, seasonality, workforce size, and whether the figure includes voluntary exits, involuntary exits, or both. SHRM’s guidance on measuring employee retention emphasizes choosing the period and population to fit the question.
When comparing teams, years, or an external benchmark, check that the measures align on these points:
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- Period: month, quarter, fiscal year, calendar year, or trailing 12 months.
- Population: company, location, department, job, or worker type.
- Separation category: voluntary, involuntary, or total.
- Denominator convention: how average headcount was calculated, including whether it uses point-in-time or monthly averages.
- Scope: an employer-specific workforce or a national survey series such as BLS JOLTS.
Turnover and retention are related but distinct measures. SHRM describes retention as the share of employees who were employed at the start and stayed for the entire period; turnover counts separations relative to average employees over a period. Their percentages are not automatically complements because the populations and calculation conventions may differ.
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