The process of determining the percentage of employees who leave an organization within a twelve-month period is a crucial metric for assessing workforce stability. This calculation typically involves dividing the number of employee separations during the year by the average number of employees and multiplying the result by 100 to express it as a percentage. For example, if a company with an average of 100 employees experiences 15 employee departures in a year, the result of this calculation would be 15%.
Understanding this metric offers significant benefits to an organization. It provides insights into employee satisfaction, identifies potential problems in management or company culture, and enables informed decisions about recruitment and retention strategies. Historically, organizations have used this calculation to benchmark their workforce stability against industry averages, allowing them to proactively address underlying issues and improve employee retention. The practice supports financial planning by enabling more accurate projections of hiring costs and potential productivity losses associated with employee departures.
