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
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.
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