IE 15.3. Turnover rate

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Understanding the turnover rate is essential for any company aspiring to optimal human resource management. This key indicator measures the percentage of employees leaving the company over a given period, reflecting workforce stability and the company’s attractiveness and retention in the job market.

1. How to answer this question ?

To calculate the turnover rate, follow these steps:

1. Identify the total number of permanent full-time equivalents (FTEs) who left the company during the year, excluding mergers and acquisitions.

2. Divide this number by the total or average FTEs from the previous year.

3. Multiply the result by 100 to obtain the turnover rate in percentage.

It’s important to note that turnover can include replaced (turnover) and unreplaced (attrition) departures, but this distinction is not necessary in the data publication.

2. Why is it important ?

The turnover rate provides vital insight into organizational health. A high rate may signal internal issues, while a too low rate could indicate a lack of dynamism. Investors and stakeholders use it to assess the company’s social performance and talent retention capability.

3. Examples :

– A company of 200 FTEs had 20 permanent employees leave this year. The turnover rate would thus be (20/200) x 100 = 10%.

– If another company had an average of 150 FTEs last year and 15 permanent FTEs left the company, the turnover rate is (15/150) x 100 = 10%.

The turnover rate is a valuable indicator for assessing employee engagement and company performance. An in-depth analysis of this indicator can reveal insights to improve retention and talent attraction strategies. Incorporating this calculation into ESG reporting demonstrates a company’s transparency and commitment to responsible human resource management.

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