Workforce
Turnover rate
Also written: staff turnover, employee turnover
What Turnover rate means
Turnover rate is the percentage of a hotel's total workforce that leaves the property over a specified period, requiring replacement. Distinct from general corporate attrition, hospitality turnover tracks both voluntary resignations and involuntary terminations across frontline, seasonal, and managerial positions.
Formula
Turnover Rate = (Number of Separations ÷ Average Number of Employees) × 100
How it is used
Operators monitor turnover monthly to control recruitment costs, maintain service standards, and identify management issues. High turnover spikes labor expenses through continuous onboarding, overtime for remaining staff, and agency labor usage. Revenue managers track departmental turnover because understaffed front office or housekeeping teams directly cause delayed check-ins, reduced room availability, and negative guest reviews. General managers use department-specific turnover data to adjust wage bands, redesign shift schedules, and evaluate department head performance.
Worked example
A 200-room hotel employs an average of 120 staff members over a year. During that period, 42 employees resign or are terminated. The annual turnover rate is (42 ÷ 120) × 100 = 35%. If replacing each employee costs $4,000 in recruiting and lost productivity, this turnover costs the property $168,000 annually.
Common mistake
Failing to separate voluntary resignations from seasonal contract completions artificially inflates operational turnover metrics, obscuring actual employee retention issues.
Frequently asked
+What does Turnover rate mean in a hotel?
Turnover rate is the percentage of a hotel's total workforce that leaves the property over a specified period, requiring replacement. Distinct from general corporate attrition, hospitality turnover tracks both voluntary resignations and involuntary terminations across frontline, seasonal, and managerial positions.
+How is Turnover rate calculated?
Turnover Rate = (Number of Separations ÷ Average Number of Employees) × 100
+What is an example of Turnover rate?
A 200-room hotel employs an average of 120 staff members over a year. During that period, 42 employees resign or are terminated. The annual turnover rate is (42 ÷ 120) × 100 = 35%. If replacing each employee costs $4,000 in recruiting and lost productivity, this turnover costs the property $168,000 annually.
+What is the most common mistake with Turnover rate?
Failing to separate voluntary resignations from seasonal contract completions artificially inflates operational turnover metrics, obscuring actual employee retention issues.