Turnover refers to the rate at which employees leave an organization within a specified period of time. Employers can better focus their employee retention efforts if they understand how turnover affects their organization. Before an organization can see these effects, though, they need to understand the difference between voluntary and involuntary turnover. 

Here are the primary differences between these types of turnover and how each can affect your organization.

 

What Is the Difference Between Voluntary and Involuntary Turnover?

Every organization will experience turnover in some capacity, but employers need to understand the difference between voluntary and involuntary:

  • Voluntary Turnover: Voluntary turnover occurs when team members leave an organization on their own terms. They may be moving to a new position, relocating to a different city, or just looking for something different. In many cases, voluntary turnover can be quite costly—unexpected departures often result in unfinished projects that require other teammates to pitch in to complete.
  • Involuntary Turnover: On the other hand, involuntary turnover occurs when a team member is dismissed. This turnover can be caused by layoffs or termination. Termination can be due to poor performance, or a violation of company policy.

 

How Do You Calculate Turnover Rate?

The frequency at which employees depart your organization is the first step toward understanding your turnover rate. Use the following equation to calculate this rate:

  • First, you will add up all employees who left your organization during a specified period. An example of the specific timeframe could be all employees who left during the previous calendar year. 

  • Then, determine the average number of employees during that specified time frame. 

  • Divide the sum of all employees who left by the average total during the specified time. 

  • You can successfully calculate your turnover rate as a percentage by multiplying that number by 100.

For example, if in 2021, 50 employees left your organization—which averaged 465 employees in that same timeframe—your turnover rate would be 10.75%.

50 / 465 = 0.1075

0.1075 x 100 = 10.75

Employers must understand how to calculate turnover to identify any present staffing concerns that need correcting. Understanding the cause of these staffing issues can help improve retention rates and overall company culture.

 

How Can Employers Reduce Turnover?

Turnover can be costly for employers, and it can often negatively impact organizational morale, too. Once employers understand their turnover rates, they need to be strategic in how they work to reduce it. 

Here are three strategies that can help your organization minimize turnover:

  1. Enhance Onboarding: Onboarding and orientation are crucial as they introduce the employee to the organization. Making a good first impression can send a positive message to an employee about the organization, instilling good will and increasing overall satisfaction. Be sure to make the most of this opportunity and formulate a strong onboarding process for your new hires.  

  2. Improve Employee Relations: Employers need to focus their efforts on fostering solid relationships between employees and management. Early signs of a decline in employee engagement can often be recognized and dealt with if employee relations have been cultivated. Employee relations help reduce turnover by creating a workplace culture that promotes employee satisfaction and offers each employee an open space to present their concerns. Good relations with employees can even improve mental health and workplace productivity levels. Take time to reward and recognize team members for their achievements through regular performance reviews like 1-1 meetings.

  3. Focus on Retention Efforts: The most apparent yet essential strategy to avoid high turnover rates is to focus on retention. If an organization is struggling to keep up with retention, it will be losing time and money. Productivity loss, training, and supplies are all expenses employers take on when hiring. Onboarding and training both take time, which delays the work that needs to be done. It can also take several weeks or months even for new employees to get up to speed. If employees continue departing after several months, it can feel like the organization is never up to speed. Take time to formulate a robust retention strategy that includes attractive benefits, strong company culture, and excellent training opportunities. Increasing retention efforts is the best way to avoid costly turnover.

 

Additional Resources

You can also stay informed, educated, and up-to-date with turnover and other important topics by using BerniePortal’s comprehensive resources:

  • BerniePortal Blog—a one-stop-shop for HR industry news

  • HR Glossary—featuring the most common HR terms, acronyms, and compliance

  • HR Guides—essential pillars, covering an extensive list of comprehensive HR topics

  • BernieU—free online HR courses, approved for SHRM and HRCI recertification credit

  • HR Party of One—our popular YouTube series and podcast, covering emerging HR trends and enduring HR top

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