This is the first line in an article about the fast food industry: “With the fast-food industry facing 150% annual turnover rates, brands are turning to Miso’s AI-powered kitchen robot, Flippy, to help increase profits…” How can you have more than 100% turnover? Thank you.
In: Economics
If your required staff to run your business is for example 10 people, but 20 people work there throughout the year, then you would have 200% turnover.
Let’s say full staff in your store is 10 people. By the end of the year you have hired 15 people and they have been fired, quit, or transferred to other jobs so you’ve needed to replace them. You have had turnover of 150%.
You have Ten people working for you. all ten quit. you get another 10 to start work. You are now at 100% turn over. Five more quit And are replaced. You are now at 150% turnover.
If you have ten employees and over the course of a year 15 people quit, but you keep hiring replacements then you have more turnover than total employees.
It depends on the calculation. But imagine if you need 10 people to staff the kitchen, and you constantly have some folks quitting, so you hire to replace them, then someone stops showing up and gets fired, then you hire someone to replace them, and so forth–you might well end up having to hire 15 total people over the course of the year just to staff the 10 people you need running the kitchen every day.
That could be calculated as a 150% turnover rate (15 is 150% of 10). You always (try to) have 10 people, but because turnover (people leaving and needing to be replaced) is so high, you end up needing to hire more than that over the course of a year just to keep it staffed full time.
If I remember right, it’s based on the number of positions available.
So if you have 10 positions for a spot or team, and 10 people leave from there in a year, that’s 100% turnover rate for that year. If 20 people leave that year, it’s 200% turnover rate.
Turnover is how many employees you replace in a year.
Say you start the year with 100 employees, and by the end of the year you replace 50 of them, that’s 50% turnover. If you replace all 100 of them, that’s 100% turnover.
But what happens if all your employees only work for a couple months. If your first set of 100 employees all get replaced in the first 6 months, you’ve already hit 100% turnover. Then if from that second set you have to replace 50 more because 50 of the second group quit/got fired in the last 6 months of the year, that’s another 50 people hired to fill the same 100 positions. That’s 150 people hired in a year to fill 100 positions.
TL/DR: you can hire more people in a year than you have positions to fill if all your employees only stay around for a couple months. Some companies can hit 300% turnover where each employee on average only stays for 2 or 3 months.
Assuming we’re talking employee turnover… people simply need to stick around for less than a year on average.
If your employees only stick around 3 months on average, you’ll refill every job 4 times each year on average. That’s a 400% annual turnover rate.
Turnover means nothing, turnover over a particular period say over 12 months may assist getting your formula understood.
You have 10 employees
In the first 4 month period, 5 employees quit or get fired, and all get replaced with new employees. You now have 50% turnover and 10 employees.
In the second 4 month period, 5 more employees quit or get fired, and all get replaced with new employees. You now have 100% turnover and 10 employees.
In the third 4 month period, another 5 employees quit or get fired, and all get replaced with new employees. You now have 150% turnover and 10 employees.
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