Glossary Term: Labor Turnover


Labor turnover measures the movement of workers in and out of employment in a particular organization. In every organization, employees join and leave for one reason or another. Labor turnover is the relation between the number of persons joining the organization and leaving due to resignation, retirement or retrenchment compared to the average number on the payroll.

How is turnover calculated?

The formula for calculating turnover monthly takes the number of separations during a month and divides it by the average number of employees on the payroll. Multiply the result by 100 and the resulting figure is the monthly turnover rate.

What are the types of Turnover?

There are two types of employee turnover: voluntary and involuntary. Voluntary turnover occurs when an employee chooses to leave (i.e., quits or resigns), and involuntary turnover occurs when the employer decides for the employee to leave (i.e., is fired).

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