What is your Firm’s Annual Turnover Rate?
Assuming your firm is not currently maintaining monthly and/or annual headcount figures, below is a formula your firm can use in determining its turnover rate. The figures used below are illustrative of a firm of 150 employees at a year’s beginning.
| Your Firm’s Total Headcount in January: | 150 |
| Your Firm’s Total Headcount in December: | 158 |
| Your Firm’s Average Annual Headcount (Line 1 + Line 2 divided by 2): | 154 |
| Total number of terminations for the entire year (termination is defined as a permanent voluntary and involuntary terminations; does not include layoffs or death): | 20 |
| Annual turnover percent (Line 4 divided by Line 3 x 100): | 13% |
What is your Firm’s Annual Financial Cost of Turnover?
Assuming your firm does not currently measure the monthly and/or annual financial costs associated with turnover, below is a formula your firm can use in determining these costs. The figures used below assume the total cost of losing a single associate is 30% (the lowest end of the range) of the yearly salary of the position
| Assuming Annual Salary of Second-Year Associate: | $75,000.00 |
| Assuming Annual Salary Plus Benefits (benefits typically cost 30% of annual salary): | $97,500.00 |
| Turnover Cost of Position: ($97,500 x 30%): | $29,250.00 |
| Total Number of Associates who left the during the year: | 20 |
| Total cost of turnover: $29,250 x 20 | $585,000.00 |
At the high end of the spectrum, this annual cost can be as high as $2,925,000.00.