The document discusses employee turnover, its definitions, calculations, and the importance of measuring it to enhance employee satisfaction and organizational effectiveness. It explains both voluntary and involuntary turnover, provides examples of turnover rates, and outlines the associated costs to companies. Strategies for employee retention, such as fostering a learning environment and offering competitive compensation, are also highlighted as essential for reducing turnover.

1. Understanding
Employee
Turnover
Laura
Moody,
SPHR
G&A
Partners

2. Before
we
get
started…
• I
am
not
an
aDorney
• This
is
not
legal
advice,
nor
should
the
presentaGon
be
subsGtuted
for
experienced
legal
counsel

3. What
to
Expect
• Understanding
employee
turnover
• Calculate
employee
turnover
• Strategies
for
employee
retenGon

4. Employee
Turnover
-­‐
DefiniGon
• Employee
turnover
is
the
number
or
percentage
of
employees
who
leave
a
company
and
are
replaced
by
new
employees

5. End
of
Employment
• Employees
leave
an
organizaGon
for
many
reasons,
including:
• ResignaGon
• ReGrement
• Layoff
• Dismissal
• Leave
of
absence
• Death

6. Turnover
–
Voluntary
&
Involuntary
• Voluntary
–
When
an
employee
chooses
to
leave
the
company
• Involuntary
–
When
the
decision
for
an
employee
to
leave
is
made
by
the
company
and
not
the
employee

7. Why
is
Turnover
Important
to
Measure?
Turnover
can
indicate:
• Employee
saGsfacGon
within
the
organizaGon
• EffecGveness
of
the
recruiGng
process
• Insight
into
how
well
managers
are
interacGng
with
employees
• OrganizaGonal
culture

8. What
is
Employee
Turnover?
• Turnover
is
normally
calculated
using
a
formula
that
tracks
the
number
of
separaGons
and
the
total
number
of
employees
per
measurement
period

9. Employee
Turnover
-­‐
CalculaGon
Turnover
Rate
=
#
of
SeparaGons
X
100
Average
#
of
employees

10. Turnover
-­‐
Example
#1
• For
example,
a
company
has
98
employees
at
the
start
of
the
year
and
102
employees
at
the
end
of
the
year.
During
the
year,
8
employees
quit
and
6
are
laid
off
Voluntary
Turnover:
8.0
%
=
8
X
100
(98+102)/2
Involuntary
Turnover:
6.0%
=
6
X
100
(98+102)/2
Total
Turnover:
14.0%
=
14
X
100
(98+102)/2

11. Turnover
-­‐
Example
#2
• For
example,
a
company
has
100
employees
and
17
employees
quit.
Assume
5
employees
leave
in
February,
3
leave
in
June,
4
leave
in
August
and
5
employees
leave
in
November
Monthly
turnover:
January
0.0%
May
0.0%
September
0.0%
February
5.0%
June
3.0%
October
0.0%
March
0.0%
July
0.0%
November
5.0%
April
0.0%
August
4.0%
December
0.0%
Annual
turnover:
17.0%
=
17
X
100
100

12. New
Employee
Turnover
-­‐
Example
• For
example,
a
company
has
30
employees
who
leave
during
the
measurement
period
and
12
of
them
had
been
with
the
company
for
less
than
one
year
Employees
with
less
than
1
year
X
100
Total
employees
who
terminated
40.0%
=
12
X
100
30

13. What
is
the
Cost
to
the
Company?
• Turnover
is
costly,
disrupGve
and
impacts
the
morale
of
the
remaining
employees

14. Turnover
Cost
as
%
of
Annual
Base
Salary
Posi/on
%
of
Annual
Salary
Entry
Level
Non-­‐skilled
Worker
30
–
50%
Service/ProducGon
Worker
40
–
70%
Skilled
Hourly
75
–
100%
Clerical/AdministraGve
50
–
80%
Professional
75
–
125%
Technical
100
–
150%
Supervisor
100
–
150%
Source:
Taleo
Research
White
Paper
Profitable
Talent
Management

15. Cost
of
Turnover
• SeparaGon
costs
• Replacement
costs
• ProducGvity
losses

16. SeparaGon
Costs
• Severance
pay
• Benefits
conGnuaGon
• Impact
on
unemployment
insurance
• Exit
interviews
• AdministraGon
for
recordkeeping,
payroll,
and
benefits
• Investment
in
employee
for
training
and
development

17. Replacement
Costs
• AdverGsing
• RecruiGng
• Interviewing
• Background
checks/
Drug
tesGng
• OrientaGon
• Training

18. ProducGvity
Losses
• Temporary
labor
• Replacement
training
• Lost
producGvity
• Lost
experGse
• Lost
revenue

19. CombaGng
Turnover

20. Variables
Leading
to
Turnover
• Why
do
employees
leave
or
say
they
would
leave?
• Lack
of
opportunity
and
career
development
• CompensaGon
• Benefits
• Management
style
• Working
condiGons
• Other
variables
affecGng
job
saGsfacGon

21. Ways
to
Learn
Why
Employees
are
Leaving
• Ask
current
employees
• Employee
aotude
surveys
• Focus
groups
• Structured
interviews
• Informal
feedback
• Terminated
employees
-­‐
Exit
interviews

22. Employee
RetenGon
-­‐
DefiniGon
• Employee
RetenGon
–
is
the
ability
to
retain
talented
employees
in
the
organizaGon

23. Employee
RetenGon
Strategies
• Growth
and
potenGal
opportuniGes
• Ensure
you
are
offering
a
compeGGve
compensaGon
and
rewards
package
• Foster
a
learning
environment
• Engage
your
employees
• Promote
diversity

24. Employee
RetenGon
Strategies
Cont’d
• Implement
recogniGon
and/or
reward
programs
at
all
levels
of
the
organizaGon
• Ensure
that
the
performance
management
system
is
working
• Have
fun
at
work

25. Employee
RetenGon
Plan
• Understand
employee
turnover
• Decide
how
to
proceed
• ImplementaGon
• EvaluaGon

26. Summary
• Measuring
and
tracking
turnover
is
valuable
• Reducing
the
cost
of
turnover
through
employee
retenGon
strategies
is
essenGal

27. QUESTIONS?
G&A
Partners
info@gnapartners.com
(800)
253-­‐8562
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