How to use the employee turnover rate calculator
Counting separations alone tells you very little. Losing five people means something completely different in a 20-person company than in a 200-person one. This calculator takes your beginning and ending headcount, works out the average headcount first, and uses that as the denominator. The average headcount is shown with the results so you can see exactly where the rate came from.
The standard formula divides separations by average headcount, and average headcount is the beginning count plus the ending count divided by two. Voluntary separations (people who resigned) and involuntary separations (layoffs, terminations, contract endings) have different causes, so they are entered separately and reported as separate rates.
An annualized rate is always shown. When the period is not 12 months it is scaled up to a yearly basis, and when it is 12 months the label states that it equals the total rate. A 3% quarterly rate is equivalent to 12% a year, so periods must be aligned before teams or companies are compared. Whether interns and contractors belong in the count varies by employer, so pick one definition and apply it the same way every time.
Frequently asked questions
It distorts the result when headcount moves a lot. During a shrinking period, dividing by ending headcount overstates turnover, so the standard practice is to use the average of beginning and ending headcount as the denominator.
High voluntary turnover points to pay, management or culture, while high involuntary turnover points to hiring standards or performance management. The causes differ, so the two rates lead to different actions.