Turnover is the one place the exam makes you do arithmetic. Learn the formula, the rounding, and above all who counts in the numerator.
SHRM's formula
Turnover rate = (separations / average headcount) x 100, where average headcount = the sum of the headcounts from each report divided by the number of reports.
Worked example: 6 separations in March, with monthly headcount reports of 210, 218 and 222.
- Average headcount = (210 + 218 + 222) / 3 = 650 / 3 = 216.667
- 6 / 216.667 = 0.027692
- 0.027692 x 100 = 2.77%
The wrong answers come from dividing by a single report instead of the average: 222 gives 2.70%, 210 gives 2.86%, and a rounded 200 gives 3.00%.
Who counts as a separation
SHRM counts voluntary and involuntary terminations but excludes employees temporarily laid off, on furlough or on leave of absence.
Worked example: 12 separations, of which 4 are temporarily laid off, average headcount 400.
- Numerator = 12 - 4 = 8
- 8 / 400 = 0.02, x 100 = 2.00%
Including all 12 gives 3.00%, and that is the error SHRM's own answer key marks wrong.
Annual and voluntary rates
- Annual turnover = total separations in the year / average number of employees that year, x 100. 84 / 700 = 0.12 = 12.0%.
- Voluntary turnover = employees who voluntarily separated / average employees, x 100. 18 / 300 = 0.06 = 6.0%, which is below SHRM's 2022 benchmark median voluntary turnover of 12%. Get the arithmetic right and then check the direction of the comparison; reversing it is a scored distractor.
JOLTS
BLS computes the separations rate = separations / employment x 100. 45 / 1,500 = 0.03 = 3.0%.
Total separations = quits + layoffs and discharges + other separations. Quits correspond to voluntary turnover, layoffs and discharges to involuntary. Hires are counted separately, and job openings is a separate JOLTS series, not a separation component.