How is labour turnover calculated?

Labour turnover is a crucial metric for businesses that measures the rate at which employees leave and are replaced within a specific period. The correct method of calculation takes into account the average number of employees during the period and the number of employees who have left the organization.

When calculating labour turnover using the average number of employees, this allows for a more accurate representation of turnover rates, particularly in organizations where the workforce size may fluctuate significantly. By dividing the number of employees leaving by the average number of employees, businesses can gauge the turnover rate in relation to the overall size of their workforce, providing insight into employee retention and organizational stability.

This calculation helps businesses understand the effectiveness of their human resource strategies and make informed decisions about employee management, recruitment, and retention efforts. The other methods mentioned do not provide the contextual accuracy necessary for a proper understanding of turnover ratios in relation to the workforce size.