Employee turnover rate: calculate it and read the context

Turnover rate (%) = employees who left during the period ÷ average number employed during the same period × 100. State the group and dates covered alongside the result.^[1]

CIPD's published reporting method uses leavers and average employment for the same period. Include permanent departures within your defined employee population, and apply the same scope to both the numerator and headcount.^[1]

Use employee headcount for this calculation rather than switching between people and full-time equivalents. Decide the population included in your reporting and keep that decision consistent across months.

If average headcount is zero, the formula cannot produce a valid percentage. Report that the rate cannot be calculated for that population and period, then check the records. A missing headcount should also remain missing rather than being treated as zero.

Temporary leave is different from leaving the organisation. Review the employee records and distinguish a permanent departure from unpaid leave or another temporary absence. Keep the category definitions visible when reporting the figures.

Count resignations, retirements, redundancies and dismissals when they are permanent departures from the employee population you report. An internal transfer within the same organisation is not a departure from that organisation.^[1]

Illustrative example: a fictional financial aggregator has 143 employees at the end of January and 149 at the end of February. Using those two snapshots, the average headcount for February is (143 + 149) ÷ 2 = 146.

If three employees leave during February, the rate is 3 ÷ 146 × 100 = approximately 2.05%. These are example inputs, not a company benchmark. Record the headcount method so readers can reproduce the calculation.

For a smaller team, report the number of departures beside the percentage. One departure from an average headcount of ten produces a 10% rate; the count helps readers understand how sensitive the percentage is to a single change.

The financial aggregator people challenges page puts this example in the context of hiring, onboarding and learning. A turnover calculation describes departures; it does not establish why employees left or show that onboarding caused the result.

For an annual rate, use all leavers in the year and average employment during that year. The same-period formula applies to the full annual reporting window.^[1]

Keep monthly rates available for spotting changes within the year. Adding percentages calculated with changing monthly denominators does not reproduce a rate calculated from annual leavers and annual average employment.

For year-to-date (YTD) turnover, use departures from the beginning of the year to your reporting date and average headcount across that same window. Label the end date. A rate through September covers a different period from a full-year rate.

Distinguish voluntary and involuntary departures and review the context. Retirement, a career change or dissatisfaction with the workplace can require different responses. A single total does not explain those circumstances.

Exit conversations can give the organisation more information. Topics to discuss include pay, development opportunities, working arrangements, management and culture. Ask about the actual experience rather than assuming one of these explains every departure.

Use the findings to identify a specific issue to review, such as unclear expectations, limited learning opportunities or a gap in the welcome. Read onboarding metrics when examining how the employee's start contributes to the wider experience.

Keep any comparison tied to a relevant population and period. There is no universal ideal percentage for every employer. The onboarding business case guide can help you describe a proposed improvement and how its result will be checked.