 Hi, my name is Time Stewart for Cleaning Business Today. In today's daily tip, we're going to be talking about employee turnover. Employee turnover is calculated by taking the number of employees that leave an organization and dividing it by the total number of employees that are typically carried on the payroll. In order to make that number relevant, you want to be able to put it within a timeframe. Typically when we talk about employee turnover, we talk about it on an annual basis. So in order to come up with annual turnover, you want to take the number of employees that left the organization over an entire year and divide it by the average number of employees that you carried over the course of the year. Let's look at a spreadsheet and look at one way that we can go about doing that calculation. There are several, but this is one of my favorites because it's a pretty straightforward way and most of us should have access to this information. The first step would to be go back over the last 12 month period, the last calendar year, and figure out how many employees you carried each month. One way of doing that is just to take a particular payday each month, say the first Friday of the month or the first pay period of the month and count the number of paychecks that went out. That's what we did in this example and for each month we recorded that number, come up with a total of 293 divided by 12, we had an average of 24.42 employees per month. So that was the average number of employees that we actually carried for that year. A good way of coming up with a total number of people that we paid for that year would be counting the W-4s and we should all have that information, we either do it ourselves or we have an account or payroll service do that. So in this example we're using 108 as the number of W-4s, you take the 24, the number of employees and subtract it from the 108, that gives you a number of 83 in change which equals the number of departures you had for that year. So if I take the 83, divide it by the 24, that gives me an annual turnover rate of 342 percent. The number is important because it's a good indicator of how good a job we're doing of recruiting the right people, selecting and hiring the right people, how good our training programs are, and how good a job we're doing of creating a culture that makes the right people want to stay and be committed and be productive and long-time employees in your workforce. You constantly want to be developing new programs and implementing new approaches to keep that number as low as you can. I hope you found this KPI tip useful. Thank you for watching Cleaning Business Today.