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Definition

employee churn

Contributor(s): Ivy Wigmore

Employee churn is the overall turnover in an organization's staff as existing employees leave and new ones are hired. 

The churn rate is usually calculated as the percentage of employees leaving the company over some specified time period. Although some staff turnover is inevitable, a high rate of churn is costly. Recruitment, hiring and training all require a financial outlay and a new hire may not be immediately productive in terms of creating profit. Depending on the job and other factors, it can take a year or more for the organization to break even on a hire and longer before any return on investment (ROI) is realized.

An unusually high rate of employee turnover is also considered indicative of problems within the organization. Uncompetitive pay scales, micromanagement, ineffective human resource management (HRM) practices and unreasonable expectations can all lead to unacceptable levels of staff turnover.  

See a tutorial about the different types of employee turnover:

This was last updated in May 2015

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