Net employee turnover rate
factor.formula
Net employee turnover rate = (total number of employees leaving at the end of the month - total number of employees entering at the end of the month) / total number of employees at the beginning of the month
This formula calculates the net employee turnover rate for a given month.
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Refers to the total number of employees who resigned or were fired in the month. This reflects employees' negative feelings about the company's prospects or working environment, or the company's own layoffs.
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Refers to the total number of new employees hired in the month. This reflects the company's attractiveness to talent or the company's need for business expansion.
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Refers to the total number of employees in the company at the beginning of the month, which is used as the base for calculating the turnover rate.
factor.explanation
Net employee turnover reflects the changes in a company's human resources and can provide supplementary information beyond traditional financial statements. Employee mobility is closely related to the company's operating conditions and market sentiment: potential employees will evaluate the company's prospects and salary levels before joining the company; current employees will decide whether to stay based on the company's operating conditions and personal development opportunities. Therefore, net employee turnover may reflect changes in the company's fundamentals or changes in market expectations of the company's prospects. In addition, empirical studies have shown that the negative correlation between employee resignation and stock returns is usually stronger than the positive correlation between employee recruitment and stock returns, indicating that employee resignation may contain more negative information. This factor can be used as a reference for stock selection, risk management, and market sentiment analysis.