What does employee turnover rate measure?

The employee turnover rate specifically measures the percentage of employees who leave an organization during a specific period, typically expressed as a percentage of the average number of employees during that time. This metric is crucial for employers to understand how often they lose staff, which can impact overall organizational health, morale, and costs associated with hiring and training new employees.

A higher turnover rate might indicate underlying issues within the company, such as poor work culture, inadequate compensation, or career development opportunities. Conversely, a lower turnover rate can be a sign of employee satisfaction and effective HR practices.

The other choices address different aspects of employee data but do not accurately define turnover rate itself. The average length of employee service primarily focuses on tenure rather than exit rates. The number of new hires does not necessarily reflect turnover, as it does not account for those who have left the organization. Lastly, while demographic information about departing employees can provide insights for retention strategies, it does not encapsulate the broader measurement of turnover rates.