Employee turnover rate calculator

How to calculate staff turnover

Find the average headcount for the period, then divide the number of leavers by it:

Average headcount = (headcount at the start + headcount at the end) ÷ 2

Staff turnover % = leavers in the period ÷ average headcount × 100

For a period shorter than a year, scale the result up so you can compare it with annual figures:

12-month equivalent = turnover for the period × 12 ÷ months in the period

The average matters because headcount moves during the year. If yours swings a lot, for example with seasonal staff, average the headcount at each month end instead of using just the first and last.

Who counts as a leaver

• Count everyone whose employment ended: resignations, dismissals, redundancies, retirements and fixed-term contracts that weren't renewed.
• Leave out internal moves and promotions, and people who are still employed but away, such as those on maternity or long-term sick leave.
• Match the leavers to the headcount. If agency staff or contractors aren't in your headcount, they aren't leavers either.
• Split voluntary from involuntary. Resignations tell you about pay, managers and workload; dismissals and redundancies reflect your own decisions. Decide once where retirements and ended contracts go, and keep to it.

Worked example

A fictional engineering subcontractor began its financial year with 70 employees and ended it with 74. Nine people left: six resigned, two were dismissed and one retired. Average headcount is (70 + 74) ÷ 2 = 72, so turnover is 9 ÷ 72 = 12.5%, and resignations alone are 6 ÷ 72 = 8.3%.

The next quarter starts at 74 and ends at 78, with four leavers, three of them resignations. That's 4 ÷ 76 = 5.3% for the quarter, or a 12-month equivalent of 21.1% if the pace continued: well above last year's 12.5%. Three of the four had joined within the year, which points at hiring and induction rather than pay, so HR tightens the onboarding checklist and starts holding exit interviews with every leaver.

Finance then prices last year's nine leavers. Each replacement cost £3,000 to recruit and £1,500 to induct and train, and new starters on £2,600 a month produced about 40% less for their first three months: £3,120 of lost output. That's £7,620 per leaver and £68,580 for the year, the second calculator's starting figures.

How to read the answer

• Compare with yourself. Your own previous years, and your teams against each other, are a fairer yardstick than any outside figure, because they share your roles, pay and location.
• Look at who is leaving: new starters, one team, one manager, or the people you'd most want to keep.
• Check stability as well. Of the people employed a year ago, how many are still here? If most are, high turnover is coming from a few roles that keep emptying.
• Allow for small numbers. In a 20-person team one leaver adds 5 points, so look at a rolling 12 months.
• Don't aim for zero. Retirements, promotions elsewhere and parting with poor performers are all turnover.

Common mistakes

• Dividing by the end headcount, which understates turnover in a growing firm and overstates it in a shrinking one.
• Annualising a single month. One leaver in a quiet month can look like a crisis once multiplied by 12.
• Counting internal transfers as leavers.
• Changing the definition between years, so the trend shows the rule change rather than anything real.
• Reporting a percentage without a cost. Boards act on money, and the second calculator gives you the figure.