## Rules to Calculate the Turnover Rate in Retail

The percentage of employees in a workforce that leave during a specific period is known as the company’s turnover rate or organization. This is mostly calculated during a fiscal or calendar year. Every business, large or small, has to keep everything in check. This post will enable you to work through your turnover rate effectively.

Both voluntary and involuntary employee information, including retirements, resignations, dismissals, and layoffs, fall under turnover. Turnover rates affect profitability rates and define staff morale. Redesigning the human resource planning process is required when the turnover rate is higher than the relative industry average. Calculate the turnover rate on an annual basis by determining the yearly separations and the average monthly employment.

Turnovers are expensive because you have to recruit and train new employees. According to The Wall Street Journal, strategies for reducing turnover include hiring the right people from the start, setting competitive salaries and benefits, fostering positive environments, recognizing accomplishments, and providing clear career paths.

## Ways for Calculating the Average Turnover Rate Annually

1. Adding up the monthly employment for the previous 12 months and dividing it by 12 to calculate the average monthly employment. The monthly employment could be the average number of payrolls that have been deposited every month. If your employees are paid twice a month, add the total number of deposits for each payroll and divide it by two to get the average employment for a particular month.

2. Determining the total number of separations for the preceding 12 month period. You can add up the partitions for an accounting period, a quarter, for example, and project the year’s total. However, this may distort the numbers because of the variations in seasonal employment and layoffs.

3. The calculating ratio of the total number of separations to the average monthly employment for the preceding 12-month period is expressed as a percentage.

## Rules you Should Follow when Calculating your Turnover Rates

• ### Know your Cost of Turnover

The initial step to understanding the cost of employee turnover is determining your total annual value for an employee. Take your employees’ annual wages and add 30% to include benefits and payrolls. Multiply the number by 25%, consisting of the hiring costs, orientation and training costs, uniforms, benefit set up, administration, wages, etc.

• ### Budget for Turnover

The turnover rate or the percentage of your employees that you lose in a year is a significant number to know. This number is needed as a benchmark, especially if you are an owner/manager. To calculate your turnover rate, take the number of employees who have left in the year (for whichever reason) and divide by the average number of employees. Your result is your turnover rate. The main reasons that employees leave any organization are:

• Low compensation
• The lower perceived amount of job security or room for advancement
• Lack of proper training
• Poor leadership or management