Turnover Rate

Turnover rate equals the number of employees who leave during a period divided by the average number of employees over the same period, usually expressed as an annual percentage. Averaging the headcount matters: dividing by the starting or ending count overstates or understates the rate when the company is growing or shrinking.

Rates are often split into voluntary and involuntary turnover, and into first-year turnover, because the causes and the costs differ. Turnover of people the company would have chosen to keep is more costly than turnover it welcomes.