If we measured when the company had hired in the seasonal staff and ended at the end of the season, we would see this in our turnover calculation:Īverage Population = (100 + 75) /2 = 87.5 Where the first scenario skews the numbers, the second helps to guarantee a consistent view of the workforce. For example, if a landscaping company had 100 workers at the start of their season in April but laid 25% of the workforce off for the winter months, we would see a much different turnover percentage based on when we chose the start and end date. ![]() Given that we are taking ONLY those two numbers (the population at the start and end of the time period), this could provide less insight into the turnover of the workforce than we would hope.Ĭonversely, knowing there are cyclical changes could ensure that we always take the start and end dates from the same point in the cycle. In many industries, there are cyclical changes or business restructurings that can materially change the total population at any given point. This is a quick and easy way to calculate turnover but does present some challenges. Mathematically we’d represent that as:Īverage Population = ( + )/2 In this scenario, we divide the exiting population by the average of the population on the beginning and end dates. We will take the defined worker population at the start of the time period, the population at the end of the time period and the count of the population that left during the time period. In this scenario, we need only three figures. This is the method utilized by many HR systems and is the most straightforward. Method 1: Using the Average Worker Population for the Start and End of the Time Period Once we’ve determined our method of measuring turnover, it’s critical to maintain the same method so that trending is correctly represented. Given that many HCM and HR Analytics systems have turnover metrics built in, we may also choose to align with their definition to ensure advanced analytics can be tied back to other HR visuals that the team utilizes. There isn’t one method that is more correct than another statistically, so we need to ensure that we understand the story we’re telling and that it’s done consistently. Once we’ve established the pool, the turnover type and the time period, we can address the different ways it can be represented. Second, are we measuring voluntary or involuntary turnover? Finally, what is the time period for which we are looking to measure turnover? Understanding the business need for performing this calculation and anticipating what further cuts you may be asked to make is fundamental in determining the pool of workers that represent the denominator. Are we measuring employees or employees and contractors? Do we include interns? First, we need to determine “what” we are measuring as the baseline or denominator in the equation. Three of the most important factors in measuring turnover can be gleaned from the definition. ![]() ![]() ![]() It is a measure that is represented as a rate/percentage of workers that leave a company within a defined time period. Turnover is an easy concept to grasp but can be elusive to measure. Turnover is a term that every manager in business knows and every company of moderate size and up measures.
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