Please indicate the turnover rate at year end.

  • Radia Guira

Employee turnover, or employee turnover rate, is the measurement of the number of employees who leave an organization during a specified time period, typically one year.
Formula:
100*(‘Number of hires for permanent employees’+’Number of hires for non permanent employees’+’Number of departures for permanent employees’+’Number of departures for non permanent employees’)/2/’Total workforce (permanent + non permanent)’
Indicator automatically calculated.

This question pertains to the turnover rate of your company at the end of the most recent financial year. « Turnover rate » is a metric used to measure the number of employees that leave a company within a certain period of time, in this case, a year. It is usually expressed as a percentage.

In detail, the turnover rate is analyzed by taking into account the number of rotations or replacements of workforce per company within the given timeframe. It is a crucial variable to assess the stability and retention capacity of a company. A higher rate may be indicative of various organizational issues like low employee satisfaction and engagement.

For example, if you had 100 employees at the start of the year and 20 of them left by the end of the year, your turnover rate would be 20%. To calculate this, divide the number of employees who left throughout the year by the total number of employees at the start of the year, and then multiply by 100.

So, the response could be something like: « Our turnover rate at the end of last year was 20%. » (example: The turnover rate at year end was 20%.)

Understanding Employee Turnover Rate

The concept of employee turnover rate is significant, not just as an HR metric but as a key indicator of an organization’s health and sustainability. Generally speaking, the employee turnover rate reflects the percentage of employees who leave a company over a set period, typically one year. This rate includes both voluntary resignations and involuntary dismissals. It is important to distinguish between the two, as they can indicate very different trends within a company. A high involuntary turnover rate might suggest financial difficulties or widespread dissatisfaction among employees, whereas a high voluntary turnover rate could imply a competitive job market or a lack of career growth opportunities.

To accurately complete your ESG scorecard, you will need to calculate your company’s turnover rate. This rate aids in identifying patterns and potential issues within your organization’s employment practices, which are a crucial aspect of social responsibility. It is an essential metric for investors who are increasingly using ESG criteria to evaluate companies’ future performance and risk management strategies. An organization with a low turnover rate is often seen as a stable and attractive investment.

Calculating Your Turnover Rate

The calculation of an organization’s turnover rate is straightforward but requires accurate record-keeping. To calculate your turnover rate, you need the total number of separations during the year and the average number of employees. The formula is as follows:

(Total separations / Average number of employees) x 100 = Turnover rate (%)

Calculating the employee turnover rate accurately is essential for providing precise information in your ESG questionnaire. You should include all part-time, full-time, and seasonal employees in your calculation to get a full picture of your workforce dynamics. Make sure to also consider the time frame; a year-end turnover rate should reflect the twelve-month period leading up to the end of your fiscal year.

Once you have your turnover rate, you’ll want to analyze it in the context of your industry standards. Different industries have varying levels of ‘normal’ turnover. Comparing your rate to industry averages can help you understand whether your organization is performing above or below standard in retaining talent.

Reducing Turnover and Improving Your ESG Score

High employee turnover can be costly and disrupt business operations. It can also reflect poorly on your ESG score, particularly under the ‘Social’ criteria, which assesses how a company manages relationships with its workforce, among other things. To improve your ESG credentials, it’s critical to implement strategies to reduce turnover. This could include improving employee engagement, offering competitive compensation, providing development opportunities, and creating a positive workplace culture.

Remember, the goal is not to reduce turnover rate to zero—some turnover is natural and healthy for bringing in fresh ideas and skills. However, a consistently high turnover rate can indicate deeper issues that need to be addressed. By understanding the causes of turnover in your organization and taking steps to create a better work environment, you can not only improve your ESG score but also increase overall company performance and employee satisfaction.

For more detailed strategies on reducing employee turnover, you can refer to insights from Forbes on managing and improving employee turnover rate. Forbes provides expert advice and practical tips that can help you build a stronger, more committed workforce.

In conclusion, accurately calculating and understanding your year-end turnover rate is a critical step in completing your ESG questionnaire. It not only provides insight into your company’s employee retention capabilities but also signals to investors your commitment to maintaining a robust and sustainable workforce. Take the time to analyze your turnover rate and implement policies that foster a stable, supportive, and engaged team. Remember, a strong turnover rate is a reflection of your company’s overall health and a key component of your ESG score. Be sure to use the metrics and strategies outlined in this article to help guide your way to a more sustainable future.