Average Employee Turnover Rates

Average employee turnover rates, what is considered normal churn?

An employee leaving a company can often be viewed as damaging. However, you could argue that actually, staff staying too long with a company can be just as harmful.

What you don’t want is de-motivated and poor performing employees staying with you just because they’re ‘comfortable’.

Organisations need some amount of churn to maintain high levels of motivation and ensure fresh blood is injected to generate new ideas and working practices which will, in turn, help a company grow.

The point at which you need to worry and take stock is when turnover has a negative effect on company performance. If you’re losing goo people at too high a rate, there’s a problem. 

Why are employees leaving? The three most common reasons your staff could be looking to leave:

  • Dissatisfaction in their current role/company
  • A change in circumstances
  • Attracted by a new opportunity in a different company

The first is under your control, the second, out of your control and the third, a potential mix of both. 
Looking at the above, it’s clear to see the impact of employee engagement, talent management, retention strategies and implementation, or of course, lack of… If employees don’t feel appreciated, challenged and satisfied, they will become demotivated and potentially look for a new role in another business.

The average churn in the UK, the average employee attrition rate is 15%, with varying rates for different sectors. For example, the private sector tends to have a slightly higher churn, whereas the public sector, education, legal and accountancy tend to be lower.

Calculating your churn

Keep a record of the amount of employees leaving your company month-by-month and compare this to previous years. I will use an example to explain to calculate the monthly attrition %:

Amount of employees at the beginning of April: (1000) + new starters (60) – leavers (112) = 948 employees
(1000 + 948) / 2 = 974
(112 / 948) x 100 = 11.8% turnover rate for April

This is the basic calculation method per month but click here to show the formula for quarterly and annual attrition rates also.

You can break down attrition rates by location, gender, level, age, department etc. as well to see where the highest turnover lays. The most damaging losses are high-performers, leadership candidates, and those with specialist skills and knowledge.

So it’s worth segmenting your calculations across different factors - for instance, seniority, department, location, line manager – and combine this data with qualitative insight from exit interviews to see if any trends emerge.

Over time, when you have collated the necessary information, it’s then important to understand why people are leaving; of course, this links in with the talent management, employee engagement and retention strategies as well as recruitment and performance management.

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