Involuntary Turnover Rate

Involuntary Turnover Rate

KPI Details

Turnover Rate (Involuntary), from a high level perspective, measures the organization's ability to attract, develop and retain high quality employees on an ongoing basis. A high rate of involuntary separations can be related to poor employee screening processes (e.g., lack of appropriate integrity tests, technical assessments, etc.), related missteps during the hiring process (e.g., applicant was not properly briefed on job duties, unqualified applicant was hired, etc.), improper management practices, poor training programs, and/or simple employee underperformance (e.g., low productivity, work quality, poor attitude, etc.). While a certain amount of turnover is unavoidable, exit interviews and other similar methods should be employed to determine what, if anything, could have been done differently by both parties to avoid the separation. The business impact of high involuntary turnover can be twofold: recruiting and hiring costs are increased, while departmental productivity, morale and work quality may also be negatively impacted.

KPI Definition

The number of employees who left the company involuntarily (i.e., those who were fired or dismissed from their position) divided by the average number of employees working for the organization (company-wide) over the same period of time, as a percentage.

KPI Best Practices

• Robust recruiting and vetting procedures set in place for new hires
• Clearly communicate expectations of performance to employees
• Hold regular employee reviews to discuss performance

KPI Calculation Instructions Involuntary Turnover Rate?

Two values are used to calculate this KPI: (1) the total number of employees that were involuntarily terminated, and (2) the average number of company-wide employees working for the organization over the same period of time. An involuntarily termination should be counted as any instance where an employee was fired, dismissed, or laid of from their position within the organization. When calculating this value for a calendar year (or month, quarter, etc.), the average number of employees working for the organization during that time period should be used in the denominator for this calculation (i.e., the number of employees at start of period, plus the number at the end of the period, divided by 2).

KPI Formula :

(Number of Involuntary Employee Separations / Average Number of Total Employees) * 100