• If needed, a company can measure its turnover rate to address internal problems.

Turnover is a measure of a company’s loss of employees that creates job openings. Often an employer is interested in knowing what its turnover rate is and how it compares with its competitors in the industry, or other companies in the area. The higher the turnover rate, the greater the cost to the employer. Turnover costs typically consist of the following items:

• Cost to terminate, plus
• Cost per hire, plus
• Vacancy cost, plus
• Learning curve loss.

Recruiting and retaining good employees is the best way to keep both turnover rates and costs down. However, there are several industries which consistently have high turnover rates. These include construction; retail trade; professional and business services; arts, entertainment, and recreation; and accommodation and food services.

When a turnover rate looks out of the ordinary, it is time to focus on the cause of the problem, and then on such things as hiring and recruiting, employee training, formal job descriptions, exit interviews, and increased benefits, to reduce the turnover rate. Measuring the turnover rate can be a helpful tool to a company in focusing its efforts.