![]() First, determine what period you intend to set up your metric for. The formula for tracking employee turnover is a simple one. Labor costs for exiting employees, including severance, or other separation benefits as well as over time and other costs to cover the open position during transition.Labor and materials for training time and trainer salaries.Administrative costs for processing paperwork for new hires and exiting employees.Interviewing costs, including background and reference checks.Advertising and marketing expense for recruitment and candidate acquisition campaigns.In addition to the cost to the bottom line for time lost and retraining, there are hard costs involved in acquisition and even separation. One of the biggest factors in the cost of recruitment and talent management is replacing employees. However, a string of employees forcing dismissals for unprofessional behavior is an entirely different thing. Someone who opts to take retirement, or move on to a new career path may not require you to change anything about the way you manage talent. The biggest break in these definitions is between voluntary and involuntary separations. For instance, voluntary separations, dismissals, retirements and even transfers to other divisions are all technically separations, but they each say something different about the success of your hiring and management processes. This basic definition will work for some metrics, but, there are a lot of reasons that employee turnover can occur. Turnover, in simplest terms is the number of separations in a given period, against the total size of your work force. So, knowing how to calculate employee turnover is a valuable tool in assessing your recruitment and HR strategies. In today’s more fluid workplace, this rarely happens. They would develop into valuable employees, and separations would happen at the end of a productive and successful career. In a perfect world, your recruiting would net you the perfect candidates. Check out more great resources with our HR Basics Series.
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