A key metric used to analyze employee retention and workforce stability is an organization’s turnover rate. If you are a manager struggling to keep your team fully staffed, talk to the employment experts at Staffing Network about what qualifies as a high turnover rate, why it matters, and how to connect with high-quality candidates.
What Counts as a High Turnover Rate?
Turnover rate refers to the percentage of employees who leave a company during a specific period of time. Often this time period is measured over the course of a month, quarter, or year. This includes both voluntary exits, such as resignations, and involuntary exits, such as layoffs or terminations.
There is a simple formula to calculate turnover rate:
Turnover Rate = (Number of employees who left ÷ Average number of employees) × 100.
So, if a company had an average of 100 employees during a year and 25 left during that time, the annual turnover rate would be 25%.
What’s considered a high turnover rate will depend on the industry and the nature of the work. In hospitality or retail, turnover rates can reach 50% or more due to seasonal changes and part-time workforces. But in professional services or tech companies, team leaders typically aim for much lower rates, often under 15%.
Tracking data within your organization can help determine whether your turnover is above or below normal levels. Here are a few ways to track turnover effectively:
- Use software. Most modern HR platforms automatically track employee departures and provide monthly or yearly turnover metrics.
- Segment your data. Look at turnover by department, manager, job role, or location. This can help pinpoint where problems are occurring.
- Differentiate between voluntary and involuntary. High voluntary turnover could indicate dissatisfaction while high involuntary turnover may signal poor hiring practices or performance management issues.
- Compare your data to industry benchmarks. Use published reports or insights from staffing firms to understand how your organization stacks up against others in your sector.
When there are a lot of staffing changes, it disrupts team cohesion and creates uncertainty. Staff may feel overworked while new employees are brought up to speed, and confidence in leadership may erode if turnover seems like a persistent issue.
Plus, high turnover doesn’t just affect internal operations, it can hurt your external image. Job seekers often research companies before applying, and a reputation for high turnover can discourage top talent from even considering your organization.
How Can I Create a More Stable Team?
A high turnover rate is more than just a number, it’s a signal that something in your workforce strategy may need attention. By tracking this metric, identifying patterns, and partnering with a staffing expert, you can improve retention and create a more stable, satisfied workforce.
Have you been worried about the turnover rate on your team? Use this knowledge as an opportunity to grow stronger and smarter in your approach to talent management. Talk to Staffing Network, a full-service staffing and recruiting firm that specializes in light/skilled industrial, engineering, and operations professionals. Connect with Staffing Network today.
