Turnover Rate is defined as the percentage of employees who left a company over a certain period of time and it is inversely proportional to employee satisfaction.

There are two types of turnover. Voluntary turnover means that an employee chooses to leave the company. The other is Involuntary turnover, which happens when the employee is terminated by the employer.

Involuntary turnover occurs when the employee is consistently underperforming, undermines colleagues’ productivity, no longer upholds the company’s core values, or detracts from company culture.

Measuring and tracking employee turnover regularly is critical for every business. There are three pieces of information: the number of employees on the starting date, the number of employees on the last date, and the total number of separations that occurred during the period, which are required to calculate the employee turnover rate over a certain period of time.

Employee turnover rate is calculated by dividing the total number of separations during the period by the average number of employees during the period and multiplying the answer by 100%.

Turnover Rate % = [(Total of Employee Separations) / (Average No of Employee)] x 100%

To calculate an average number of employees, sum the number of employees on the start day and the number of employees on the end day and divide the result by 2.

Average No of Employee = (No of Employee on Start Day + No of Employee on End Day) / 2

The total number of separation includes voluntary and involuntary turnover during a certain period, but do not include temporary leave employees, who are still employed.

High turnover rate impacts negatively on employer branding and needs a lot of recruiting resources to fulfill strong dedicated candidates and ultimately inflates your cost-per-hire. Controlling turnover has a direct impact on your bottom line and the long-term health of your organization.

As mentioned above, employee satisfaction is inversely proportional to turnover rate, getting the right pay regularly is one of the most influential factors for employee satisfaction.

Cambodia Payroll & Outsourcing (CP&O) provides incomparable Professional Employer Organization (PEO) services, helping your company, specifically your HR Department, move from an Operational and Administrative supporter of the business to a Strategic Business Partner, maintaining employee engagement, great working culture, and environment.

If you want to make sure your payroll process is accurate and reliable to ensure regular salary payments for your employees, inquire through email: [email protected] to know how we can help your business.

Thant Zin

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