What is Turnover?

Turnover, or employee turnover rate, represents the percentage of departures and arrivals of employees within a given period. A high turnover rate can indicate internal problems such as lack of job satisfaction or attractive career opportunities elsewhere.

Why is turnover important?Turnover is a key indicator of the social health and work environment of a company. A managed turnover rate indicates good human resource management and employee satisfaction.

💡 Be cautious: analyzing only the turnover rate can be misleading. A company hiring a large number of employees at once will have a high turnover rate, which does not necessarily indicate a problem.

Definition of Turnover

Turnover refers to the renewal of a company's workforce due to departures (dismissals, end of contracts, resignations, retirements) and the recruitment of new employees. A high turnover rate means that the employee renewal rate is high, which can have significant impacts on the company.

How is turnover calculated?

To calculate turnover, use the following formula:

• Turnover (%) = (Number of departures / Total workforce at the beginning of the period) x 100

Example:If a company with 100 employees sees 15 departures in one year, the turnover rate is 15%.

Some statistics on turnover in France

A study by DARES shows that turnover has doubled in 20 years. In 2022, there were an average of 500,000 resignations per quarter, with a resignation rate of 2.7% in the first quarter of 2022.

Another study by INSEE provides insights into the average turnover rate in France: 15%.

What are the causes of turnover?

What are the internal causes of turnover?

Internal causes of turnover include:

• Poor management: Ineffective or toxic management can demotivate employees. Managers lacking leadership skills or who do not communicate effectively can create a stressful work environment, leading to employee departures.
• Toxic work environment: Interpersonal conflicts, harassment, or a negative corporate culture can push employees to seek healthier work environments.
• Working conditions: Inadequate working conditions, such as long hours, lack of flexibility, or outdated work equipment, can also be contributing factors.

What are the external causes of turnover?

External causes of turnover are often related to:

• Professional opportunities: Attractive offers elsewhere can entice employees to leave, especially if they offer better working conditions, higher salaries, or more interesting career prospects.
• Job market: The current situation over the past few years has seen companies struggling with recruitment, putting employees in a strong position. This trend is quite widespread, although it varies by profession.

What are the consequences of turnover?

What are the direct consequences of turnover?

• Increased recruitment costs: The costs associated with posting job offers, conducting interviews, and onboarding new employees increase proportionally with the number of recruitments.
• Increased training needs: The cost and time needed to train new recruits in their specific roles are also significant. During this period, overall productivity can decrease, affected by new employees who are not 100% productive from the start and by the reduced productivity of those who need to train them.

What are the indirect consequences of turnover?

• Reduced productivity: Employee departures result in a loss of know-how, history if the person had been there for a long time, and specific skills, which can slow down operations until new employees are fully operational.
• Impact on morale: Frequent departures can demotivate remaining teams, create uncertainty, and affect team cohesion.

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FAQ

What is turnover?

Turnover is the rate of employee rotation in a company over a given period. It is measured as a percentage of the number of departures relative to the total workforce at the beginning of the period.

How is turnover calculated?

Use the formula: (Number of departures / Total workforce at the beginning of the period) x 100.

Why is turnover important?

It indicates the social health of the company and can reveal internal problems that require attention. Managed turnover contributes to better talent retention and reduced costs.

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