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Turnover and attrition

What is an employee separation?

Definition

A separation is any end of the employment relationship, voluntary or involuntary. It is the numerator in most turnover formulas.

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A separation is any end of employment.

Resignations, retirements, dismissals, layoffs and the end of a fixed-term contract are all separations. Whatever the reason, the person was on the payroll and now is not.

Each separation is the single unit that every turnover, attrition and churn rate counts, which is why its definition matters more than it looks.

Separations fall into voluntary and involuntary types.

  • Resignation: the employee leaves by choice. Voluntary.
  • Retirement: the employee chooses to stop working. Usually counted as voluntary.
  • Dismissal or termination: the company ends the employment for conduct or performance. Involuntary.
  • Layoff or redundancy: the company removes the role. Involuntary.
  • End of a fixed-term contract: count it only if your rule says fixed-term staff are in scope.

The full split is on the voluntary turnover and involuntary turnover pages.

Separation and termination are not always the same word.

Some companies and payroll systems use termination for every end of employment, resignations included. Others use it only for dismissals. Separation is the neutral word that covers both, which is why turnover formulas use it. When you read a report, check which meaning of termination it uses.

Every turnover rate depends on this one definition.

Getting the definition wrong quietly breaks every rate you publish. Decide up front whether interns, contractors, fixed-term staff and internal transfers count, then apply it the same way every period.

The separation rate is separations over average headcount.

Formula

Separation rate = separations ÷ average headcount × 100

It is the same calculation as the turnover rate, and the two names are often used for the same number. Split it into voluntary and involuntary separation rates to make it useful.

Here is a worked example with round numbers.

Take an invented company with an average headcount of 200 in a year. It recorded 14 resignations, 2 retirements, 3 dismissals and 1 transfer to a sister company.

If the rule says transfers to a sister company are not separations, the count is 14 + 2 + 3 = 19 and the separation rate is 19 ÷ 200 × 100 = 9.5%. Count the transfer and the rate becomes 20 ÷ 200 = 10%. Neither is wrong. Switching between them from one year to the next is.

These are the common mistakes with separations.

  • Changing what counts as a separation between periods, so the trend measures the rule change.
  • Leaving out people who joined and left in the same period. They are separations too.
  • Counting an internal move as a separation in one system and not in another.
  • Dating some separations by the day notice was given and others by the last working day.

Turn your separations into a rate.

Enter your headcount at the start and end of the period and your separations, and the free calculator shows the rate and the annualized figure.

Calculate your turnover rate

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These related terms are in the glossary too.

  • Employee turnover

    Employee turnover is the movement of people out of a company over a set period, counted as the employees who leave and are replaced.

  • Turnover rate

    The turnover rate is the percentage of your workforce that left during a period.

  • Voluntary turnover

    Voluntary turnover is a departure the employee chose: a resignation, a retirement, or a move to another employer.

  • Involuntary turnover

    Involuntary turnover is a departure the company initiated: a termination, a performance exit, or a layoff.

  • Headcount and average headcount

    Headcount is the number of employees on the payroll at a point in time. Average headcount is the average across a period, and it is the denominator in most turnover and retention formulas.

  • Attrition

    Attrition is headcount lost when employees leave and the role is not backfilled, so the position disappears from the org chart.

Back to the HR glossary, where all 52 terms are defined.