Employee turnover as Professional Services KPI
Definition, Calculation, Example

What is employee turnover? How is employee turnover calculated and measured?
Employee turnover is the ratio of employees that leave a company over a period time to the average number of people over the same time.
In the consulting business, people are the greatest asset (Harvard Business Review has a different point of view). Loss of a billable consultant has a high cost.

Any agency is willing to recruit the best employees and find a way to retain those employees for as long as possible to get the most value out of its recruitment efforts.

Employee turnover answer to such questions:
  • Are people satisfied with their jobs?
  • What is the quality of our culture?
Employee turnover formula is as follows:
$$ Employee\; turnover\; =\; \frac { Number\; of\; people\; have\; left }{ AVG\; headcount } \; ×\; 100\% $$
It might be useful to distinguish voluntary turnover, involuntary turnover, and total turnover.
A consulting company has 50 employees at the start of the quarter. During the first quarter, 9 employees left and 7 got hired. A simple average headcount for the period is 49.
Turnover is 18.4%.
$$ Employee\; turnover\; =\; \frac { 9 }{ \frac { 50+48 }{ 2 } } \; ×\; 100\%\; ≈\; 18.4\% $$
According to the US Department of Labour in 2016 annual total separations rate (turnover) for professional and business services is 63%. The annual number for the 2017 Bureau of Labor Statistic will release by March 16, 2018. As of February 2018, we know that monthly separation rate for Professional and business services is 5.5. The annual total rate metric is a sum of all 12-month rates.
Measurement of turnover can be done with specific HR software or with the Metric.ai base on the data from your time tracking service.
Metric.ai interface, employees section, turnover dashboard
Metric.ai interface, employees section, turnover dashboard
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