Turnover Trends (And How to Fix Them), Explained

Caroline Chessia | July 26, 2023

Turnover rates are a crucial hiring metric of your talent retention and talent acquisition strategies. If you don’t know when people are leaving you won’t be able to figure out why they’re leaving. And a low turnover rate starts with your recruiting process – and picking candidates with high quality of hire.

Read on to learn more about turnover: what it is, how to calculate it, and how to use it to inform your hiring practices.


Stats on Turnover in the First 30-90 Days

In a 2018 survey of 1,500 employees who quit their jobs, almost 500 said they left within the first three months.

Why does this happen so often? The most common reason is that a role doesn’t match what was described during the interview process.

You can avoid this type of turnover by:

  • Ensuring written job descriptions are accurate, not aspirational. Work with hiring managers to talk through expectations, current realities, and projections for growth. Using AI recruitment assist to write descriptions also helps your accuracy.
  • Inviting lots of questions from candidates during interviews. Make sure they feel genuinely welcome to ask about the company and role, to ensure understanding.
  • Taking a good pulse of new hires at early milestones. How are they feeling two weeks in? Thirty days? Two months? Check in and make a genuine effort to address concerns.


How to Calculate Turnover Rate

Calculate your turnover rate by taking your number of separations (i.e., applicable employee departures) in a set period. Then divide by your average number of employees, and multiply that result by 100. So:

Turnover Rate = (Number of Separations / Average Number of Employees) x 100

Here’s a step-by-step guide:


1. Find your average number of employees.

Since headcount fluctuates, calculating your turnover rate with an average makes the most sense. When calculating your turnover rate, you’ll use a set period of time—e.g., January 2023—and begin with your average headcount over that period. For example:

  • Acme Software paid 107 employees on January 13 and 101 employees on January 27.
  • 107 employees + 101 employees = 208.
  • 208 employees / 2 pay periods = 104 employees on average for January.


2. Figure out your number of separations

Determine how many departures you had in the period you’re calculating for. Include voluntary separations and involuntary separations. Do not include employees on leave, temporary workers whose contracts have ended, or furloughed staff. For example:

In January, Acme Software:

  • Dismissed 2 contractors whose projects concluded
  • Lost 1 employee who left for another opportunity
  • Lost 1 employee who retired
  • Dismissed 1 employee for cause
  • Placed 1 employee on family leave

In this scenario, Acme Software ended January with 6 fewer employees. But – only 3 departures qualified for their total number of separations: 1 employee who retired, 1 employee who resigned, and 1 employee who was fired.


3. Divide the number of separations by the average number of employees. This will give you the raw turnover number. 

For example, for Acme Software in January:

3 separations / 104 average employees = 0.0288


4. Multiply your result by 100. This will calculate your turnover rate as a percentage. 

In our example, Acme Software’s final turnover rate for January is:

0.0288 x 100 = 2.88%


What Causes Employee Turnover?

Employee turnover stems from poor candidate experience to misalignment between employee and employer. Strategies like exit interviews and employee satisfaction surveys help determine what contributes to yours. However, as a rule, turnover is often caused by:

  • Mis-hires
  • Unsatisfactory benefits packages
  • Poor management
  • Unpleasant company culture
  • Unclear career growth opportunities
  • Burnout

Many of those problems, if they apply to your organization, require deep work to address. Tackling company culture from the ground up, for example, is no small feat.

But recruiters have an opportunity to improve their companies’ turnover rates by doubling down on positive hiring practices.

Where do poor hiring practices influence turnover? Common examples include:

  • Poor Interview Planning: where questions can’t uncover whether a candidate is a good fit for a role
  • Mismatches Between the Job Description and Actual Role Responsibilities: leading to dissatisfaction
  • Long Wait Times for Candidates: which may invite them to engage in other job opportunities or sour them on the company
  • Negative Candidate Experience: which could predispose a job seeker to dislike your company from the get-go


Strategies to Reduce Turnover

How can you make sure your new hires are safer bets for long-term stays? Implementing simple, modern best practices into your hiring process is an essential place to begin.

These best practices apply to your recruiting process, as well as a new hire’s first 90 days in your company.


Make improvements in your hiring process

Automated interview scheduling and one-way screenings are great tools for maximizing the efficiency of the hiring process without sacrificing candidate experience. Starting your relationship on the right foot can go a long way to show your candidates that you respect them.

Here are some ways technology helps you empower your candidates:

Craft efficient hiring practices that help you stand out from the competition, and ensure the right fit with each new hire.


Develop strong onboarding programs

For the risk-averse and stability-minded among us, it might seem unfathomable to take and leave a job within three months’ time. But studies show that up to 20% of turnover happens within 90 days of a new hire joining a company.

Some turnover is caused by mis-hires (based on poor culture fit or skills matching). And if so, implementing better hiring practices helps. But even for the right candidate in the right place, you should use the first 90 days to establish positive relationships.

To help new hires feel established, comfortable, and welcome from Day 1, make sure your onboarding program follows these tactics:

  • It’s fun!: Get paperwork out of the way as soon as possible—as in, before an employee’s start date. Their first impressions of working on your team shouldn’t be dull.
  • It’s educational: Provide a thorough introduction to your company, products, and industry, so new hires feel equipped to hit the ground running. Some companies use interviewing software as oral or written tests of how much the new employee has learned.
  • It’s gradual: Don’t ask employees to do everything solo from their first try. Slowly introduce responsibilities over this period and provide coaching as they settle in.
  • It’s social: Employees want to join teams, not companies. Provide lots of opportunities to meet coworkers and feel like they’re welcome in the pack.
  • It’s connected: Especially if employees are geographically distributed, creating touchpoints with managers, HR reps, and colleagues will establish a network of helpful contacts for new hires.


Reduce Turnover by Hiring the Right People, the First Time

Better hires make better long-term team members. The talent acquisition process is key to establishing effective, happy, and productive teams. Make sure you’re leveraging current, compassionate hiring practices to hire the right candidates for each open role. interviewstream is here to help.

About The Author

Caroline Chessia is the Marketing Operations Specialist at interviewstream. She loves color-coordinated graphs, hiking in the mountains, and every dog she meets—especially the Golden Retrievers.


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