Voluntary Turnover Rate

Voluntary Turnover Rate

KPI Details

Turnover Rate (Voluntary) measures the organization's ability to attract, develop and retain high quality employees on an ongoing basis. A high rate of voluntary separations should be particularly alarming for any organization, as these departures may be indicative of deeper organizational or industry-related issues. Voluntary separations may be related to issues with the work environment maintained by the company, subpar benefits or compensation packages, and/or frequent disagreement with company management. 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 voluntarily (i.e., those who resigned or left their position without being terminated/fired) 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

• Effective recruiting and vetting procedures to identify the right fit for job openings
• Provide incentives to employees who remain with the company for certain periods of time
• Implement career paths for employees leading to advancement
• Offer benefits that are competitive or superior to industry averages

KPI Calculation Instructions Voluntary Turnover Rate?

Two values are used to calculate this KPI: (1) the total number of employees that voluntarily left the organization during the measurement period, and (2) the average number of company-wide employees working for the organization over the same period of time. A voluntary separation should be considered any instance where the employee resigned, retired or left their position of the own accord. Forced terminations or layoffs should not be counted in the numerator for this calculation. 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 Voluntary Employee Separations / Average Number of Total Employees) * 100