This unit is arithmetic. Three formulas, one benchmark set, and one comparability rule.
Overall turnover rate
Per SHRM: total separations during the year, divided by the average number of employees during that year, multiplied by 100.
Worked example: a firm averaged 480 employees and recorded 72 separations. 72 / 480 = 0.15, and 0.15 x 100 = 15.0%.
- The denominator is average headcount, not year-end headcount. Ending headcount distorts the rate when headcount changes.
- Voluntary separations divided by total separations is the voluntary share of separations, not a turnover rate.
- Hires minus separations over headcount is net headcount change, a different quantity.
Voluntary and involuntary rates
Each uses the same denominator: average employees.
Worked example: 250 average employees, 40 separations, of which 30 were resignations and 10 employer-initiated.
- Overall: 40 / 250 x 100 = 16.0%
- Voluntary: 30 / 250 x 100 = 12.0%
- Involuntary: 10 / 250 x 100 = 4.0%
The trap is dividing voluntary separations by total separations: 30 / 40 = 75%, which is a share of separations, not a turnover rate.
SHRM 2022 benchmark medians
Overall 15%, voluntary 12%, involuntary 4%. So an organization reporting overall 18%, voluntary 15% and involuntary 3% is above on overall and voluntary and below on involuntary.
JOLTS
BLS JOLTS defines total separations = quits + layoffs and discharges + other separations. Quits map to voluntary turnover; layoffs and discharges map to involuntary. Hires are not a separations component, and internal transfers and promotions are not separations at all.
JOLTS computes the separations rate as separations divided by employment, times 100. A plant of 1,600 with 96 separations in a quarter: 96 / 1,600 = 0.06, x 100 = 6.0%.
The caution: that is a quarterly figure and cannot be compared directly with SHRM's 15% annual median without covering a full year.