Turnover Ratio

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Turnover Ratio is used to calculate employee turnover by division, department, manager and job role or function. Voluntary or involuntary separations are typically kept in separate reports. Turnover Ratios are essential when measuring management effectiveness and organizational health, and are often used to compare performance against benchmarks or coworkers.

Most companies find that compiling multiple turnover ratios to simplifies the process:

  • Division, Department or Manager: If the turnover can be traced to a concrete source, HR or executive management can better understand the data and create programs to control or alter the rate. Senior Management performance is reflected by turnover rate, so it's appropriate to report this metric directly towards individuals in management.
  • Job Role or Job Function: It can be beneficial for companies to have access to Turnover Ratio when comparing their ratio to that of similar positions with in a specific industry or geographical location. Knowing where the company stands in comparison to others can help highlight flaws or bring to light positive qualities of the company, especially when it comes to hiring.
  • Separation Reason: It's important to report turnover as voluntary or involuntary. A company should already keep track of layoffs or firing, but in addition to this it is important to keep track of voluntary separations.
  • Employment Status: When measuring turnover rate, it can be also useful to keep track of an individuals employment status, to possibly distinguish their reasons for a voluntary separation.

With an Org Chart, you can track this important data directly. The information above can automatically be updated in your Org Chart as employees leave. Org Charts are simple enough, that with a click on a manager or department, one can immediately identify turnover rates.

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