The term turnover rate is used to refer to the number of employees who leave a company in proportion to those who remain. This index can be calculated in different ways and can also be adapted to different parameters. Thus, we can speak of undesired turnover index, voluntary versus involuntary turnover index, avoidable versus unavoidable turnover index, complementary turnover indicators, among others.
There are different ways to define the turnover rate. However, in all cases, it is a magnitude that will identify whether there are internal or external problems. related to the company with regard to personnel selection. That is to say, the turnover rate will allow us to know the proportion that exists between the workers who are faithful and those who do not, since they aspire to leave the company in favour of Other job offers that are more attractive.
One of the aspects to consider when calculating the turnover rate is that there are different formulas according to the specific index you want to calculate. In this way, different factors need to be taken into account, such as people leaving a company for involuntary reasons (e.g., retirements or deaths), as well as elements related to the time period being calculated in reference to the turnover rate (semi-annual, annual, five-year, etc.).
In general terms, the rotation index will be calculated dividing the number of casualties by the number of employees. However, as has been mentioned, depending on the criteria applied in each case, as well as the specific type of indicator desired, this formula will admit variations of various kinds.
In any case, the most common way would be the one mentioned. That is, dividing the number of casualties by the total number of employees. Once the turnover rate is obtained, the question arises as to what is a reasonable turnover rate. It is based on the premise that a turnover rate equal to 0% is practically impossible, due to the fact that there will always be factors that cause staff turnover in any company. However, it is important to understand that a low rate is usually a good symptom of the company's performance. On the other hand, as each type of company is different, when considering whether a turnover rate is reasonable or not, the best way to obtain reliable data is compared to the rotation index of other similar companies sector itself.
The turnover rate is a very important figure because it will allow us to understand employee loyalty to the company, which, at the same time, will allow us to detect possible failings in human resource management. It should be noted that the Employee training and learning the tasks and functions of the job requires resources from the company itself. Thus, it is in every company's interest to have employees who stay in their jobs on a continuous basis, as this allows such training and learning to be amortised, as well as avoiding the need to training new employees from scratch. However, if the company doesn't meet the employee's expectations, they will leave their job for another that offers better conditions.
Due to this, knowing a company's rotation index will allow to gauge employee job satisfaction levels and, in the event of a low satisfaction level, implement necessary changes. In this regard, there are ways to improve employees' working conditions without directly increasing their salary, which, in fact, is not always the cause of a high turnover rate.
Indeed, salary can influence whether an employee decides to stay in their job or not. However, certain amenities that allow for a Flexible remuneration for the worker, such as improved transport conditions (Petrol Ticket or Transport Ticketor improvements in work-life balanceNursery Ticket or Gift vouchersare key elements that allow employee loyalty without the need for a direct salary increase, which, moreover, would be less rewarding as the employee would lose part of said increase in the form of taxes.
