TURNOVER

TURNOVER FORMULA

  • Determine how many employees left the department during a given period of time.

  • Divide this number by the total number of people employed in the department during that same period of time

  • Express the result as a percentage

Excessive turnover may be an indication of deeper problems within an organization. Supervisors should know what constitutes an unacceptably high turnover rate and what can be done to keep it in check. Research has shown that employees leave their jobs for reason that are more complicated that just being not being paid enough.

In the 1990’s employment was at an all time high causing fewer qualified people to be looking for jobs. A certain amount of turnover is good. It helps to weed out problems and freshen up staff. Very low turnover can result in a lack of creativity and a resistance to change and new ideas.

Some turnover is inevitable. If turnover gets out of hand, it can undermine the company’s success and survival. The challenge is to know how much turnover is too much, and what to do before it becomes a serious drain on your company’s resources. Better recruitment, hiring, and orientation procedures can head off a significant amount of turnover. Many employees end up leaving because the job turns out to be different from what they were led to expect.

Turnover costs the organization money. Think about how much it costs to find, hire, and train a new employee to replace one that quits. There are indirect costs, such as decreased productivity among the departing employee’s co-workers, who may be demoralized by his/her decision to leave, or important projects that are stalled because a key worker has dropped out.

Organizations need to take time to determine the reason for turnover. Exit interviews can provide valuable information about voluntary separations that might have been avoided. Questionnaires may be sent to former employees asking them to comment on their reasons for leaving the organization or department.

Attitude surveys can be conducted among existing employees. These surveys should be anonymous and include specific questions:

  • The employees orientation (beginning initiation) experience

  • Attitudes toward compensation and benefits plans

  • Feelings about supervision

  • Feelings about the work environment

  • Intention to stay or leave the organization in the near future

After analyzing the responses to the attitude surveys and the exit interviews, a turnover reduction strategy can be developed. A successful strategy will depend on what reasons are uncovered. But turnover can usually be reduced by taking one or more of the following steps:

  • Give job applicants a realistic idea of what the job is like

  • Improve job interviewing skills

  • Provide adequate orientation

  • Provide adequate training for the job

  • Consider implementing a mentoring system for new arrivals

  • Improve working conditions

  • Look for ways to enrich jobs and increase job satisfaction

  • Increase opportunities for career advancement

  • Build a sense of camaraderie on the job