Keeping loyal employees is crucial to your business. But, do you suffer with a high new employee turnover rate? This is something that if it is happening, is a metric you need to be aware of. Here is more on improving new employee turnover rate.
What Is New Employee Turnover?
It sounds simple, and it is. This is the rate of new hires that leave your company within their first year. When calculating this metric, it is important to find out what the issue is. Is it that the new hires weren’t vetted properly? Or is it something wrong within the company that is making it a hostile environment?
Why Is It Important?
We all know how much it costs to acquire a new employee. When you have a new employee turnover rate, you’re losing money. And while Glassdoor calculates an average of $4k in costs per new employee hired, that’s not the only expense. You have to factor in things like onboarding, training, etc.
It also has importance for your loyal employees. With new hires quitting the job, this puts a heavier workload on your existing employees. This can cause stress, burnout, and a poor image of the company.
Calculating Your New Hire Turnover Rate
There is a simple solution to get these calculations. You’ll want to first use a specific time period – it’s up to you if you want to look at a monthly, quarterly, or yearly time period.
Now you simply count the number of new employees you hired within that time period you chose. Now count how many are no longer with the company. It doesn’t matter if they quit or you let them go.
Divide the number of new employees who left by the total of new employees hired, and multiply by 100.
For example, your company hired 100 new employees, and 10 of them left the company within the same quarter.
The new hire turnover rate for the quarter would be: (10/100) x 100 = 10 percent.
And while 10 percent is a good rate, many experts show rates from 20 percent up to 40 percent. And that doesn’t always fall under the fault of the company. But you should always try to have a low rate.
Improving New Hire Turnover Rate
Make sure you are vetting new hires correctly. Also, make sure your company culture, work ethic, and required history is clear and follows attractive guidelines.