{"id":46746,"date":"2021-05-03T17:52:31","date_gmt":"2021-05-03T15:52:31","guid":{"rendered":"https:\/\/factorialhr.com\/blog\/?p=46746"},"modified":"2026-06-11T11:06:22","modified_gmt":"2026-06-11T09:06:22","slug":"labour-turnover","status":"publish","type":"post","link":"https:\/\/factorialhr.co.uk\/blog\/labour-turnover\/","title":{"rendered":"What Is Labour Turnover and How Do You Calculate It?"},"content":{"rendered":"<p>All businesses want to reduce their labour turnover. You want your people to be <strong>happy and productive<\/strong> and stay at your company for years to come. If you have high labour turnover, you\u2019ll find yourself constantly recruiting, onboarding and training new employees. This can eat up <strong>time and money<\/strong>. To replace an employee on the average UK salary, it could cost <a href=\"https:\/\/www.accountsandlegal.co.uk\/small-business-advice\/average-employee-cost-smes-12-000-to-replace\" target=\"_blank\" rel=\"noopener noreferrer\">up to \u00a312,000.<\/a> Read on to understand what labour turnover is and how to calculate it for your organisation.<\/p>\n<div class=\"key-facts-box\">\n<p><strong>Table of Contents<\/strong><\/p>\n<ol>\n<li><a href=\"#key-facts\" rel=\"noopener\">Key Facts<\/a><\/li>\n<li><a href=\"#what-is-labour-turnover\" rel=\"noopener\">What Is Labour Turnover?<\/a><\/li>\n<li><a href=\"#what-is-employee-retention-rate\" rel=\"noopener\">What Is Employee Retention Rate?<\/a><\/li>\n<li><a href=\"#how-do-you-calculate-labour-turnover-and-retention-rates\" rel=\"noopener\">How Do You Calculate Labour Turnover and Retention Rates?<\/a><\/li>\n<li><a href=\"#example-calculations-for-labour-turnover-and-retention-rates-step-by-step\" rel=\"noopener\">Example Calculations for Labour Turnover and Retention Rates (Step by Step)<\/a><\/li>\n<li><a href=\"#how-do-you-analyse-your-labour-turnover-rate\" rel=\"noopener\">How Do You Analyse Your Labour Turnover Rate?<\/a><\/li>\n<li><a href=\"#why-is-labour-turnover-important\" rel=\"noopener\">Why Is Labour Turnover Important?<\/a><\/li>\n<li><a href=\"#what-is-a-good-labour-turnover-rate\" rel=\"noopener\">What Is a Good Labour Turnover Rate?<\/a><\/li>\n<li><a href=\"#how-to-reduce-your-labour-turnover-rate-a-checklist\" rel=\"noopener\">How to Reduce Your Labour Turnover Rate: A Checklist<\/a><\/li>\n<\/ol>\n<h2 id=\"key-facts\">Key Facts<\/h2>\n<ul>\n<li><strong>Labour turnover<\/strong> is the percentage of employees who leave an organisation over a given period, calculated as: (number of leavers \u00f7 average number of employees) \u00d7 100.<\/li>\n<li>According to analysis of the ONS Annual Population Survey, <a href=\"https:\/\/www.cipd.org\/uk\/views-and-insights\/thought-leadership\/cipd-voice\/benchmarking-employee-turnover\/\" target=\"_blank\" rel=\"noopener\">the average UK labour turnover rate is approximately <strong>34%<\/strong>, with hospitality exceeding 50% and public administration sitting at around 25%<\/a>.<\/li>\n<li><a href=\"https:\/\/www.hrdatahub.com\/blog\/how-to-increase-employee-retention-in-hospitality\" target=\"_blank\" rel=\"noopener\">Replacing a mid-level employee earning \u00a325,000 or more costs an average of <strong>\u00a330,614<\/strong><\/a>, factoring in recruitment, training, and lost productivity.<\/li>\n<li>The CIPD&#8217;s 2026 Resourcing and Talent Planning Report found that <a href=\"https:\/\/www.cipd.org\/uk\/about\/news\/cipd-omni-rms-recruitment-retention-report-2024\/\" target=\"_blank\" rel=\"noopener\"><strong>41% of organisations<\/strong> reported new recruits quitting within the first 12 weeks<\/a>\u2212\u00a0underscoring the cost of poor onboarding and hiring practices.<\/li>\n<\/ul>\n<\/div>\n<div>\n<div>\n<div><\/div>\n<div><div class=\"factorial-banner inline-banner banner-demo category-talent-management\"\n    data-banner-id=\"177031\"\n    data-banner-type=\"demo\"\n    data-category=\"Talent Management\">\n    <div class=\"banner-content\">\n        <div class=\"banner-text\">\n                            <h4>Generate reports that help your lead with data, not hunches<\/h4>\n            \n                            <ul class=\"banner-checklist\">\n                                                                        <li class=\"not-prose\">Customise &amp; personalise reports for every stakeholder<\/li>\n                                                                                                <li class=\"not-prose\">Monitor KPIs and HR metrics to optimise your workforce<\/li>\n                                                                                                <li class=\"not-prose\">Identify trends and predict future needs with advanced analytics<\/li>\n                                                            <\/ul>\n            \n                            <a href=\"https:\/\/factorialhr.co.uk\/request-demo\"\n                    class=\"factorial-cta-button not-prose demo btn-brand\" data-cta=\"demo\" data-cta-position=\"inline-banner\">\n                    Get a demo                <\/a>\n                    <\/div>\n\n        <div class=\"banner-image no-image\">\n            <img decoding=\"async\" src=\"https:\/\/factorialhr.co.uk\/blog\/app\/plugins\/factorial-utilities\/assets\/images\/banners\/inline\/backgrounds\/default_image.svg\" class=\"not-prose\" \/>\n        <\/div>\n    <\/div>\n<\/div><\/div>\n<\/div>\n<\/div>\n<h2 id=\"what-is-labour-turnover\">What Is Labour Turnover?<\/h2>\n<p>Labour turnover, also called employee turnover, refers to the <strong>percentage of employees who leave an organisation during a given time frame. <\/strong>Labour turnover is different from <a href=\"https:\/\/factorialhr.co.uk\/blog\/attrition-rate\/\" target=\"_blank\" rel=\"noopener\">employee attrition;<\/a> however, they are closely related.<\/p>\n<p>Although it is normal for companies to experience turnover, employers should be aware if the rate increases, which could indicate problems within the workplace. This could end up being costly for your organisation as high turnover rates mean:<\/p>\n<ul>\n<li>More resources spent on the employee journey (hiring, onboarding, training, and offboarding)<\/li>\n<li>Loss of senior employees who hold critical knowledge and experience<\/li>\n<li>Decreased employee morale, which can create a hostile workplace environment.<\/li>\n<\/ul>\n<h3>Labour turnover types<\/h3>\n<p>Employee turnover is generally divided into four categories:<\/p>\n<ul>\n<li><strong>Voluntary labour turnover:<\/strong> When someone leaves of their own accord, normally by resigning and working their notice period.<\/li>\n<li><strong>Involuntary labour turnover: <\/strong>When a team member is asked to leave by the company, whether for disciplinary reasons or due to redundancy.<\/li>\n<li><strong>Retirement: <\/strong>This is a type of voluntary turnover, but companies often look at it separately because the staff member has only chosen to leave due to reaching retirement age.<\/li>\n<li><strong>Internal movement:<\/strong> When someone moves to a different role within the organisation, either through promotion or moving to another area of the business. While you might not include this in your overall labour turnover calculations, it\u2019s worth including it in some aspect of your analysis since you will need to fill the role with a new hire.<\/li>\n<\/ul>\n<h4>How to calculate average headcount<\/h4>\n<p>To ensure your turnover formula is accurate, calculate your average headcount by adding the number of employees at the start of the period to the number at the end, then dividing by two. Using month-end headcount alone \u2014 without averaging \u2014 can distort your figures, particularly if your workforce fluctuates seasonally or includes temporary staff.<\/p>\n<p>Most companies calculate labour turnover on a <strong>monthly and annual basis<\/strong> to give them an overview of how well the business is retaining staff.<\/p>\n<div class=\"factorial-banner inline-banner banner-freebie category-talent-management\"\n    data-banner-id=\"171900\"\n    data-banner-type=\"freebie\"\n    data-category=\"Talent Management\">\n    <div class=\"banner-content\">\n        <div class=\"banner-text\">\n                            <h4>Calculate your team&#039;s FTE with ease<\/h4>\n            \n                            <p>Simplify your workforce planning with our easy-to-use calculator to optimise staffing levels and make informed HR decisions.<\/p>\n            \n                            <a href=\"https:\/\/factorialhr.co.uk\/templates\/full-time-equivalent-calculator\"\n                    class=\"factorial-cta-button not-prose freebie\" data-cta=\"freebie\" data-cta-position=\"inline-banner\">\n                    Download for free                <\/a>\n                    <\/div>\n\n        <div class=\"banner-image has-image\">\n            <img decoding=\"async\" src=\"https:\/\/factorialhr.com\/wp-content\/uploads\/2025\/10\/29104405\/X-3.png\" class=\"not-prose\" \/>\n        <\/div>\n    <\/div>\n<\/div>\n<h2 id=\"what-is-employee-retention-rate\">What Is Employee Retention Rate?<\/h2>\n<p>Employee retention rate is a metric that shows a <strong>company\u2019s ability to retain people over a given period of time.<\/strong> It\u2019s similar, but not the same as labour turnover. Turnover is about <strong>those who leave,<\/strong> whereas retention is about <strong>those who stay.<\/strong> It also doesn\u2019t take new hires into account.<\/p>\n<p>If you have a <strong>high employee retention rate,<\/strong> it\u2019s likely that you have <strong>happy, productive people<\/strong> in your team. If you have a <strong>low retention rate,<\/strong> you could have <strong>problems with morale and productivity,<\/strong> and no doubt <strong>high recruitment costs.<\/strong><\/p>\n<h2 id=\"how-do-you-calculate-labour-turnover-and-retention-rates\">How Do You Calculate Labour Turnover and Retention Rates?<\/h2>\n<p>It\u2019s pretty easy to calculate employee turnover and retention once you know the formula. The staff turnover formula is straightforward once you have your headcount data.<\/p>\n<p>Let\u2019s start by reviewing labour turnover:<\/p>\n<p><strong>Labour turnover formula:<\/strong><\/p>\n<p><em>(# of leavers\/average # of employees) x 100 = turnover rate<\/em><\/p>\n<p>So a company with an average of <strong>200 employees<\/strong> and <strong>10 leavers<\/strong> over a given period would have an employee turnover rate of <strong>(10\/200) x 100 = 5%<\/strong>.<\/p>\n<p>Now let\u2019s take a look at retention.<\/p>\n<p><strong>Retention rate formula:<\/strong><\/p>\n<p><em>(# of employees who stayed for the period \/ # of employees at the start of period) x 100 = retention rate<\/em><\/p>\n<p>Most companies calculate retention rates on an annual basis, so the defined period would be from January 1st to December 31st. However, you can define any period you like.<\/p>\n<p>So a company with an average of <strong>200 employees<\/strong> over the year that <strong>lost 10 staff members<\/strong> retained <strong>190 employees.<\/strong> Their retention rate would be <strong>(190\/200) x 100 = 95%.<\/strong><\/p>\n<p>According to CIPD&#8217;s analysis of the ONS Annual Population Survey, the average UK labour turnover rate is approximately <strong>34%<\/strong>, with around 27.4% of employees moving to a new employer each year and 6.6% leaving the labour market entirely. Rates vary significantly by sector: hospitality exceeds 50%, while public administration and defence sit at around 25%. This means a &#8220;good&#8221; turnover rate depends heavily on your industry. Benchmarking against your sector average is more meaningful than chasing a single national figure.<\/p>\n<div class=\"factorial-banner inline-banner banner-freebie category-talent-management\"\n    data-banner-id=\"189151\"\n    data-banner-type=\"freebie\"\n    data-category=\"Talent Management\">\n    <div class=\"banner-content\">\n        <div class=\"banner-text\">\n                            <h4>Download your Employee Wellbeing Strategy Template here<\/h4>\n            \n                            <p>An employee wellbeing strategy is key to cultivating a healthy workplace and boosting employee engagement.<\/p>\n            \n                            <a href=\"https:\/\/factorialhr.co.uk\/templates\/employee-wellbeing-strategy\"\n                    class=\"factorial-cta-button not-prose freebie\" data-cta=\"freebie\" data-cta-position=\"inline-banner\">\n                    Download for free                <\/a>\n                    <\/div>\n\n        <div class=\"banner-image no-image\">\n            <img decoding=\"async\" src=\"https:\/\/factorialhr.co.uk\/blog\/app\/plugins\/factorial-utilities\/assets\/images\/banners\/inline\/backgrounds\/default_image.svg\" class=\"not-prose\" \/>\n        <\/div>\n    <\/div>\n<\/div>\n<h2 id=\"example-calculations-for-labour-turnover-and-retention-rates-step-by-step\">Example Calculations for Labour Turnover and Retention Rates (Step by Step)<\/h2>\n<p>Formulas can be a little hard to digest, so let\u2019s look at a couple of examples to help us understand the labour turnover and employee retention formulae.<\/p>\n<p><strong>Labour turnover rate example<\/strong><\/p>\n<p>A Leeds-based company, Top Paper, had an average of <strong>100 employees<\/strong> during the calendar year. Throughout the course of that year, <strong>10 people left<\/strong> the company (voluntarily and involuntarily) and had to be replaced. Consequently, Top Paper <strong>retained 90 employees<\/strong>.<\/p>\n<p>Top Paper\u2019s labour turnover formula would be as follows: <strong>(10\/100) x 100 = turnover rate of 10%<\/strong> (low). Nothing to worry about here.<\/p>\n<p><strong>Retention rate example<\/strong><\/p>\n<p>Bouncy Castles Ltd. had an average of <strong>25 employees<\/strong> during the calendar year. Throughout the course of that year, <strong>17 people left<\/strong> the company (voluntarily and involuntarily) and had to be replaced. Consequently, Bouncy Castles Ltd. <strong>retained 8 employees<\/strong>.<\/p>\n<p>Bouncy Castles Ltd.\u2019s retention rate formula would be as follows: <strong>(8\/25) x 100 = retention rate of 32%<\/strong> (very low). This suggests there is a serious issue preventing the company from retaining <a href=\"https:\/\/factorialhr.co.uk\/blog\/talent-management\/\" target=\"_self\" rel=\"noopener\">talent<\/a>, which needs to be addressed.<\/p>\n<h2 id=\"how-do-you-analyse-your-labour-turnover-rate\">How Do You Analyse Your Labour Turnover Rate?<\/h2>\n<p>When you\u2019re analysing your labour turnover rate, you need to ask 3 questions: <strong>\u2018Who?\u2019, \u2018When?\u2019<\/strong> and <strong>\u2018Why?\u2019<\/strong><\/p>\n<h3>Who is leaving?<\/h3>\n<p><strong>Who is leaving your company?<\/strong> If it\u2019s your<strong> top performers,<\/strong> you need to take action and ensure you\u2019re <a href=\"https:\/\/factorialhr.co.uk\/blog\/develop-high-potential-employees\/\" target=\"_blank\" rel=\"noopener\">nurturing your high-potential employees.<\/a><\/p>\n<p>If it\u2019s <strong>low performers,<\/strong> don\u2019t be tempted to just sit back. Make sure you look at your <a href=\"https:\/\/factorialhr.co.uk\/blog\/learning-and-development\/\" target=\"_blank\" rel=\"noopener\"><strong>training and development <\/strong><\/a><strong>plans<\/strong> and see whether you can make improvements to your <strong>employee engagement programmes.<\/strong> Is it possible they were low performers because they weren\u2019t happy with your company culture?<\/p>\n<h3>When do they leave?<\/h3>\n<p><strong>When do team members leave your organisation?<\/strong> If new hires are leaving<strong> soon after joining,<\/strong> review your <a href=\"https:\/\/factorialhr.co.uk\/blog\/recruitment-selection-hiring-process\/\" target=\"_blank\" rel=\"noopener\"><strong>recruitment<\/strong><\/a><strong> and <\/strong><a href=\"https:\/\/factorialhr.co.uk\/blog\/digital-onboarding\/\" target=\"_blank\" rel=\"noopener\"><strong>onboarding process.<\/strong><\/a> Consider whether your <strong>job descriptions are accurate<\/strong> and whether <strong>new hires get enough support<\/strong> when they\u2019re settling into their roles.<\/p>\n<p>If staff are <strong>leaving after a few years,<\/strong> consider whether you\u2019re offering the right people the right <strong>progression<\/strong><strong> opportunities.<\/strong><\/p>\n<h3>Why are they leaving?<\/h3>\n<p>If you know the answer to this, you can make changes.<\/p>\n<p>A great way to find out why your team members are leaving is to conduct exit interviews. If you hear that staff felt like their <strong>hard work wasn\u2019t appreciated,<\/strong> look at your <a href=\"https:\/\/factorialhr.co.uk\/blog\/staff-appraisal\/\" target=\"_self\" rel=\"noopener\">performance appraisal process.<\/a> Ensure that good performers are rewarded for their efforts. You can use our <strong>free <\/strong><a href=\"https:\/\/factorialhr.co.uk\/templates\/performance-improvement-plan-template\" target=\"_blank\" rel=\"noopener\"><strong>performance improvement plan<\/strong><\/a> to help here.<\/p>\n<p>If you hear that employees leave because they struggle with their <strong>work-life balance,<\/strong> take a look at your engagement programmes for benefits such as <a href=\"https:\/\/factorialhr.co.uk\/blog\/flexible-working\/\" target=\"_blank\" rel=\"noopener\"><strong>flexible working<\/strong><\/a> or <strong>enhanced parental leave.<\/strong><\/p>\n<p>Exit interview data is most valuable when aggregated across multiple leavers. The CIPD&#8217;s 2026 Resourcing and Talent Planning Report found that <strong>41% of organisations<\/strong> reported new recruits quitting within the first 12 weeks, and 27% said selected candidates failed to turn up on their first day. These figures suggest that problems often begin before the employee even settles in. The quality of your recruitment and onboarding process is a primary driver of early turnover.<\/p>\n<div class=\"factorial-banner inline-banner banner-demo category-talent-management\"\n    data-banner-id=\"171825\"\n    data-banner-type=\"demo\"\n    data-category=\"Talent Management\">\n    <div class=\"banner-content\">\n        <div class=\"banner-text\">\n                            <h4>Streamline Your Hiring with Factorial AI<\/h4>\n            \n                            <ul class=\"banner-checklist\">\n                                                                        <li class=\"not-prose\">Quickly review and shortlist the best candidates with AI<\/li>\n                                                                                                <li class=\"not-prose\">Keep all applicant communication in one central hub<\/li>\n                                                                                                <li class=\"not-prose\">Shape your recruitment funnel to match your hiring process<\/li>\n                                                            <\/ul>\n            \n                            <a href=\"https:\/\/factorialhr.co.uk\/request-demo\"\n                    class=\"factorial-cta-button not-prose demo btn-brand\" data-cta=\"demo\" data-cta-position=\"inline-banner\">\n                    Get a demo                <\/a>\n                    <\/div>\n\n        <div class=\"banner-image has-image\">\n            <img decoding=\"async\" src=\"https:\/\/factorialhr.com\/wp-content\/uploads\/2025\/10\/28103031\/AI-ATS-Recruitment-Banner-1.png\" class=\"not-prose\" \/>\n        <\/div>\n    <\/div>\n<\/div>\n<h2 id=\"why-is-labour-turnover-important\">Why Is Labour Turnover Important?<\/h2>\n<p>Labour turnover and retention <strong> affect every area of your business. <\/strong>When you keep track of your labour turnover rate and retention rate, it\u2019ll help you to continuously improve these rates and keep top talent working for your organisation for years to come.<\/p>\n<h3><strong>Helps you measure the success of new initiatives<\/strong><\/h3>\n<p>Tracking your labour turnover means you can <strong>see how well your new programmes and initiatives are doing.<\/strong> If you\u2019ve added flexible working conditions to your employee engagement programme and you\u2019ve seen a lower staff turnover, this initiative could be working.<\/p>\n<p>However, if you\u2019ve made a change such as restricting the times of year that staff can take annual leave and you notice a high labour turnover rate, you might want to see if your business can cope with re-thinking this policy.<\/p>\n<h3>Can show you where to make changes<\/h3>\n<p>Analysing your labour turnover rate will help <strong>show you where you need to improve.<\/strong> If new hires leave quickly, you know you need to invest time in perfecting your onboarding process to reduce your recruitment costs.<\/p>\n<h3>Helps save time and resources<\/h3>\n<p>Measuring employee retention and labour turnover helps you to <strong>save both time and money.<\/strong> This is particularly important for small businesses where you have fewer resources, so you need to ensure you\u2019re <strong>investing in the right places. <\/strong>You at least want team members to stay long enough for you to<strong> recover your investment.<\/strong><\/p>\n<p>When you have a <strong>low labour turnover,<\/strong> that usually means your company <strong>values its team<\/strong> and your <strong>staff feel appreciated,<\/strong> so they\u2019re more likely to go the extra mile.<\/p>\n<p>High labour turnover can ripple throughout the whole business. There\u2019s likely <strong>lower morale and employee experience,<\/strong> and the more people notice others leaving, the more it <strong>drags down the atmosphere. <\/strong> Research published in <a href=\"https:\/\/bmcpublichealth.biomedcentral.com\/articles\/10.1186\/s12889-020-8289-5\" target=\"_blank\" rel=\"noopener noreferrer\">BMC Public Health<\/a> confirms that workforce stress contributes to higher turnover rates, so it is worth investigating whether workload, management quality or working conditions are placing undue pressure on your team.<\/p>\n<h2 id=\"what-is-a-good-labour-turnover-rate\">What Is a Good Labour Turnover Rate?<\/h2>\n<p>When calculating labour turnover, benchmarking against your industry average is essential. According to CIPD&#8217;s analysis of the ONS Annual Population Survey, the average UK labour turnover rate is approximately <strong>34%<\/strong> across all sectors, but this masks significant variation: hospitality exceeds 50%, while public administration and defence sits at around 25%. As a general rule, a rate of <strong>10% or below<\/strong> suggests strong workforce stability. A rate above 20% may warrant investigation. However, the most meaningful comparison is always against organisations of a similar size and sector.<\/p>\n<p>It is also worth noting that not all turnover is harmful. CIPD research highlights that very low turnover can prevent fresh ideas from entering the organisation, while very high turnover signals deeper retention problems. The goal is a rate that reflects a stable, engaged workforce, not zero movement.<\/p>\n<p>According to a 2026 Compensation Trends report, <a href=\"https:\/\/ravio.com\/blog\/employee-retention-trends\" target=\"_blank\" rel=\"noopener\">the average UK attrition rate in 2026 was <strong>19%<\/strong>, above the European average of 17.4% and representing an 11% increase from 2026<\/a>. This upward pressure makes it more important than ever for UK employers to track their turnover rate consistently and act on the data.<\/p>\n<h2 id=\"how-to-reduce-your-labour-turnover-rate-a-checklist\">How to Reduce Your Labour Turnover Rate: A Checklist<\/h2>\n<p>The following best practices should help you <strong>increase your retention rate<\/strong> and, as a consequence, <strong>reduce your labour turnover rate<\/strong>:<\/p>\n<ul>\n<li><strong>Benchmark and track<\/strong> your employee retention rate, employee turnover rate and <a href=\"https:\/\/factorialhr.co.uk\/blog\/attrition-rate\/\" target=\"_self\" rel=\"noopener\"><strong>attrition rate<\/strong><\/a><strong>.<\/strong><\/li>\n<li>Invest more time in <strong>finding the right person for the job<\/strong> from the onset.<\/li>\n<li>Monitor and <a href=\"https:\/\/www.ons.gov.uk\/employmentandlabourmarket\/peopleinwork\/employmentandemployeetypes\/adhocs\/10685employeeturnoverlevelsandratesbyindustrysectionukjanuary2017todecember2018\" target=\"_blank\" rel=\"noopener noreferrer\"><strong>research the market<\/strong><\/a> on a regular basis so that you are offering fair salaries and compensation plans in line with <a href=\"https:\/\/www.payscale.com\/research\/UK\/Industry\" target=\"_blank\" rel=\"noopener noreferrer\"><strong>industry averages<\/strong><\/a><strong>.<\/strong><\/li>\n<li>Conduct structured <strong>exit interviews<\/strong> with every leaver and aggregate themes quarterly. The CIPD&#8217;s 2026 Resourcing and Talent Planning Report found that only 31% of organisations that know their turnover figures actually calculate the cost of labour turnover, meaning most businesses are flying blind on the financial impact of churn.<\/li>\n<li>Offer a <strong>solid onboarding process<\/strong> to ensure a positive <a href=\"https:\/\/factorialhr.co.uk\/blog\/digital-onboarding\/\" target=\"_blank\" rel=\"noopener\"><strong>employee experience<\/strong><\/a> from the start.<\/li>\n<li>Gather employee insights through <strong>regular <\/strong><a href=\"https:\/\/factorialhr.co.uk\/blog\/performance-appraisal\/\" target=\"_blank\" rel=\"noopener\"><strong>appraisal meetings<\/strong><\/a> and feedback surveys. The more valued and heard your employees feel, the longer they will stay at your company.<\/li>\n<li>Establish <strong>clear goals and expectations<\/strong> in terms of <a href=\"https:\/\/factorialhr.co.uk\/blog\/continuous-performance-management\/\" target=\"_blank\" rel=\"noopener\"><strong>employee performance<\/strong><\/a><strong>.<\/strong><\/li>\n<li>Create a positive work environment based on <strong>trust and transparency.<\/strong><\/li>\n<li>Provide your employees with <strong>training and support<\/strong> so that they understand and are able to perform their duties.<\/li>\n<li>Offer <strong>clear career development paths<\/strong> to your employees.<\/li>\n<li><strong>Recognise and reward<\/strong> employee contributions.<\/li>\n<\/ul>\n<h3>How Factorial can help you track and reduce labour turnover<\/h3>\n<p>Tracking labour turnover manually across spreadsheets is time-consuming and error-prone. Factorial&#8217;s HR software centralises your people data \u2014 headcount, leavers, starters, and tenure \u2014 so you can calculate your turnover rate automatically and spot trends before they become problems. With built-in performance management, onboarding workflows, and employee engagement tools, Factorial gives you the operational visibility to act on your turnover data, not just report it.<\/p>\n<p><a href=\"https:\/\/factorialhr.co.uk\/request-demo\" target=\"_self\" rel=\"noopener\">Book a free demo<\/a> to see how Factorial can help your organisation improve retention.<\/p>\n<p><iframe src=\"\/\/www.youtube.com\/embed\/C7WzRnXlf48\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<h2>FAQs<\/h2>\n<h3>What is labour turnover and how is it calculated?<\/h3>\n<p>Labour turnover is the rate at which employees leave an organisation over a specific period. It is calculated by dividing the number of employees who left by the average number of employees during that period, then multiplying the result by 100 to get a percentage.<\/p>\n<h3>What is good labour turnover?<\/h3>\n<p>A good annual labour turnover rate is generally considered to be 10% or less. However, this can vary significantly by industry, so it&#8217;s important to benchmark your rate against similar companies in your sector to get a more accurate picture of performance.<\/p>\n<h3>What does 40% turnover mean?<\/h3>\n<p>A 40% turnover rate means that four out of every ten employees left the company over a specific period, such as one year. This is typically considered a very high rate, often indicating significant problems with employee satisfaction, company culture, or retention strategies that require investigation.<\/p>\n<div class=\"factorial-banner inline-banner banner-freebie category-talent-management\"\n    data-banner-id=\"170487\"\n    data-banner-type=\"freebie\"\n    data-category=\"Talent Management\">\n    <div class=\"banner-content\">\n        <div class=\"banner-text\">\n                            <h4>Download your free offboarding checklist now<\/h4>\n            \n                            <ul class=\"banner-checklist\">\n                                                                        <li class=\"not-prose\">Key steps for smooth, compliant exits<\/li>\n                                                                                                <li class=\"not-prose\">Knowledge transfer &amp; company asset return<\/li>\n                                                                                                <li class=\"not-prose\">Exit interview for a final fareware<\/li>\n                                                            <\/ul>\n            \n                            <a href=\"https:\/\/factorialhr.co.uk\/templates\/employee-offboarding-checklist\"\n                    class=\"factorial-cta-button not-prose freebie\" data-cta=\"freebie\" data-cta-position=\"inline-banner\">\n                    Download for free                <\/a>\n                    <\/div>\n\n        <div class=\"banner-image has-image\">\n            <img decoding=\"async\" src=\"https:\/\/factorialhr.com\/wp-content\/uploads\/2025\/10\/14100624\/template-static-banner.png\" class=\"not-prose\" \/>\n        <\/div>\n    <\/div>\n<\/div>\n<p><script type=\"application\/ld+json\">\n{\n  \"@context\": \"https:\/\/schema.org\",\n  \"@graph\": [\n    {\n      \"@type\": \"Article\",\n      \"headline\": \"What Is Labour Turnover and How Do You Calculate It?\",\n      \"description\": \"Understand labour turnover: definition, UK formula, calculation. 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To replace an employee on the<a href=\"https:\/\/factorialhr.co.uk\/blog\/labour-turnover\/\" class=\"read-more\"> [&#8230;]<\/a><\/p>\n","protected":false},"author":136,"featured_media":191946,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[337],"tags":[],"class_list":["post-46746","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-talent"],"acf":{"topics":"talent"},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v21.5 (Yoast SEO v21.9.1) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Labour Turnover: Definition, Formula &amp; UK Benchmarks | Factorial<\/title>\n<meta name=\"description\" content=\"Understand labour turnover: definition, UK formula, calculation. 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