How to use the employee turnover calculator
- Enter the number of separations in the period. Decide in advance which departures you count, and use the same rule every time.
- Enter the headcount at the start and at the end of the period. The calculator averages them.
- Enter the length of the period in months so the rate can be scaled to a year.
- Optionally enter a replacement cost per hire that you estimate yourself to see the cost of turnover.
Formula
Average headcount = (start headcount + end headcount) / 2
Turnover rate = separations / average headcount x 100
Annualized rate = turnover rate x 12 / months in the period
Cost of turnover = separations x replacement cost per hire
Annualizing is simple scaling. It assumes the rest of the year looks like the period you measured.
Worked example
A team starts the year with 52 people, ends it with 48 and has 9 separations. The average headcount is 50, so turnover is 9 / 50 = 18% for the 12 month period, which is also 18% annualized.
If a quarter had 5 separations on the same headcount, the quarterly rate is 10%, and scaled by 12 / 3 it becomes 40% a year. With an estimated $4,500 to replace each person, the 9 separations in the year cost $40,500, or $810 per average employee.
What counts as a separation
Some teams count everyone who leaves. Others look only at people who quit, or only at people who were let go. Each choice answers a different question, so decide what you want to learn before you count. Be consistent over time, and keep temporary workers or planned seasonal exits out of the count if they would distort the picture.
Interpreting the rate
The rate can be higher than 100% when positions turn over more than once in the period. A small team can swing a lot from one departure, so the rate for a team of ten is far noisier than for a team of five hundred. This page makes no claim about what a good rate is, since it depends on the work, the location and the season. Compare your own rate across periods, and see what each hire costs with the employee cost calculator.
Related measures
Customer attrition is calculated in a similar way with the churn rate calculator. To count part-time and full-time staff on one scale before you measure headcount, use the FTE calculator.
Assumptions and limits
- Headcount is the number of people at the start and end of the period. The simple average of the two is the denominator.
- Annualizing multiplies by 12 and divides by the months in the period, so it is a straight line scaling.
- The replacement cost is your own figure for recruiting, onboarding and lost output, and it assumes every separation is replaced.
- No benchmark is claimed. Seasonal staffing, transfers and rehires are not treated separately.
Frequently asked questions
Why average the start and end headcount?
Headcount changes during the period, so the average is a fairer base than either end alone. If you have monthly headcounts, a more detailed average of those would be better.
Can turnover be above 100%?
Yes. If a role is filled and vacated repeatedly, separations can exceed the average headcount.
Is scaling a short period to a year reliable?
It is only a rough guide. One bad month scaled by twelve looks dramatic, and seasonal businesses may have a very different second half.
How do I estimate the replacement cost?
Add up what you spend on advertising, interviewing time, onboarding and the output lost while a seat is empty or a new person ramps up, then divide by the hires. It is your own estimate, and the calculator does not suggest one.