The headline rate hides the only thing worth knowing
Turnover is leavers over average headcount, and it is the number everybody quotes. The trouble is that two completely different businesses produce the same figure.
Both of these are 30% turnover:
- A third of a settled workforce left, once
- Three posts churned ten times each
Those need opposite responses, and the headline rate cannot tell them apart at any level of precision.
The stability index can. It is the proportion of people who were here at the start of the period and still are. High turnover with high stability is a revolving door on a few seats. High turnover with low stability is the whole workforce moving.
A business measuring only the first number is measuring the one it cannot act on. It is one extra field and it changes what the answer is for.
What each combination points at
High turnover, high stability. The churn is concentrated in specific posts. That is a recruitment problem, a job design problem, or one manager, and it is fixable in a way that a company-wide retention initiative is not.
High turnover, low stability. The losses are spread. That points somewhere general: pay, management, workload. Nothing about individual roles will touch it.
The denominator is the average, and it is not a detail
Turnover is measured against the average headcount, meaning the start and end figures halved. Using either endpoint on its own is wrong wherever the business changed size, and it is wrong in whichever direction happens to suit.
A company growing from 50 to 100 people, with 20 leavers:
- On the average headcount: 27%
- On the closing figure: 20%
- On the opening figure: 40%
Same year, same twenty people. The tool shows all three whenever the headcount moved, because the one most often reported is whichever number was easiest to find rather than the one the convention asks for.
Separate the resignations out
Redundancies, dismissals and retirements all sit inside the headline rate and drag it around without saying anything about whether people want to stay.
Voluntary turnover is the part an employer can act on. A 25% rate that is almost entirely redundancy is a different situation from a 25% rate that is entirely resignation, and treating them the same wastes whatever gets done next.
Absence, measured the same way
Days lost over days available, where available is the average headcount times the working days in the period. The tool also gives days per head, because that is the figure people recognise and compare against.
The default of 226 working days a year is a normal full time pattern after leave and bank holidays. Change it if the working pattern is not a standard one, because the percentage is only as good as the denominator underneath it.
A rate is a prompt, not a finding
None of these numbers say whether the leaving was a problem. A business that recruits well and promotes people out into better jobs has turnover. So does one nobody will stay at. The arithmetic cannot distinguish them, and neither can a benchmark.
What the numbers are good for is narrowing where to look. For absence specifically, the Bradford Factor weights frequency over duration, which answers a different question again and comes with its own warnings.
Common questions
How do you calculate staff turnover?
Leavers divided by the AVERAGE headcount, times 100. The average is the start and end figures halved. Using either one on its own gives a different answer wherever the business changed size, and the published convention is the average.
Why does my turnover rate change depending on which headcount I use?
Because the denominator moved. A company growing from 50 to 100 with 20 leavers is at 27% on the average, 20% on the closing figure and 40% on the opening one. Same year, same leavers, three answers. Reporting whichever was easiest to find is how a rate ends up flattering or alarming for no real reason.
What is the stability index?
The proportion of people who were employed at the start of the period and still are. It is what the crude turnover rate cannot tell you: whether a settled workforce lost people once, or a small number of posts turned over repeatedly.
Can two businesses with the same turnover rate be completely different?
Yes, and that is the point of measuring both. Two businesses at 30% turnover: one lost a third of a settled workforce, the other churned three posts ten times each. High turnover with high stability means a few seats spinning, which is a recruitment or job design problem. High turnover with low stability means everyone leaving, which points at pay, management or workload.
Should I count redundancies in my turnover rate?
They belong in the headline rate, but separate the voluntary leavers out as well. Resignations are the part an employer can act on. Redundancies, dismissals and retirements drag the headline around without saying anything about whether people want to stay.
What is a good staff turnover rate?
There is no single answer, and a rate is a prompt to look rather than a finding. A business that recruits well and promotes people out has turnover. So does one nobody will stay at. The number alone does not distinguish them, which is why the stability figure and the voluntary split matter alongside it.