Employee churn refers to an employee leaving his current job or employer to join a different company. The employee churn is calculated as a ratio, which is the percentage of the employees leaving the company over time (i.e. year, month, quarter). High employee churn rates can have a tremendous negative impact on an organization. Replacing employees is costly, not only from a hiring perspective but also training new hires to be productive over time. Sometimes it can take up to 12 months for a new hire to be fully productive in a specific role.
High employee churn rates are associated with ineffective people management, lack of training, and pay scales that do not follow the market standards.