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Calculating Turnover
Life in Workforce Management
Calculating Turnover
Share your stories of workforce-management success in contributing to your business' bottom line, as well as your tales of business bloopers and blunders.
I have seen so many different ways and theories about calculating turnover that I'm about exhausted, but I wanted to get at least an idea from some professionals about how you do your calculations. Fu
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Forums » Topic Forums » Life in Workforce Management » Calculating Turnover
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Calculating Turnover
posted at 6/9/2005 6:50 AM EDT
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Posts: 42
First: 8/7/2000 Last: 11/16/2010 |
I have seen so many different ways and theories about calculating turnover that I'm about exhausted, but I wanted to get at least an idea from some professionals about how you do your calculations. Full time v part time. Retail v support staff. Voluntary v involuntary separations. How do these all play into your calculations?
Additionally, if you are willing to share, what information is reported to your Board of Directors??? Thanks so much for any help! |
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Calculating Turnover
posted at 11/22/2005 8:59 AM EST
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Posts: 7
First: 11/22/2005 Last: 2/25/2006 |
I've developed a method that goes beyond measuring turnover, which can produce a very narrow view of the future. I can forecasts the change in workforce demographic, accounting for age and years of service. This is achieved by developing and charting talent pathways, which includes talent losses, aquisitions and internal employee movements from and to various jobs.
Like you, I became very frustrated with some conventional tools to forecast retirements. I'm an engineer and was asked estimate the impact of an aging workforce. Fortunately, I have some background in equipment and system forecasting, which allowed me to look at the workforce as a system. Based on these projections, you can identify talent bottlenecks. The process is not difficult to understand. However, it is a bit too wordy for this posting. Please contact me at tapin-neilthib@cox.net if you would like additional information. |
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Calculating Turnover
posted at 7/12/2006 9:02 AM EDT
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Posts: 103
First: 3/26/2001 Last: 8/8/2006 |
As the above post suggests, a turnover calculation doesn't necessarily tell a story, and a small number isn't necessarily good and a big number necessarily bad. Regardless of how you calculate, I think that being able to paint the picture around this statistic is important, particularly if the Board wants it reported. For example, if turnover has increased dramatically over the prior year, could it be that the organization was turning over an underperforming sales team with better skilled professionals who will drive revenue? Or, has the company's benefits or comp packages become so uncompetitive that you are losing talent? These are important things to dive into via your exit interviews.
All that said, I would run the stats in the different ways you have mentioned. I would run full-time, part-time (if the number of part-time employees is significant) and combined. I would run voluntary, involuntary and combined. You can then compare the data and see if it gives you more angles to your company's story. Hope this helps, good luck! |
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Calculating Turnover
posted at 8/28/2006 11:27 PM EDT
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Posts: 1
First: 8/28/2006 Last: 8/28/2006 |
Two dimensions are essential for you in classifying turnover and for calculating its impact on the company: the value of the talent lost and the cost of replacement. You can build a typology of these two dimensions that would help you focus on the main issues, instead of other dimensions that are less important. |
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Calculating Turnover
posted at 8/29/2006 12:22 AM EDT
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Posts: 8
First: 12/19/2002 Last: 8/29/2006 |
I'm in the process of writing an article for the Employer's Advantage newsletter on this topic, and am interested in other points of view. I maintain that turnover calculations, as usually constructed, are a blunt sword at best, and dangerous misdirection at worst. A raw turnover number indicates the effect of hundreds of variables acting independently and in concert over the entire timespan of your most senior employee's tenure. How do you tease something useful out of so confused a dataset?
I suggest tracking new-hire failures as 30, 60, 90, 180, and 365 day rates, so you can look for effects of changes in time to react appropriately. As another post suggested, the more meaningful subcategories (fulltime, part, etc.) you can track, the better your chances of understanding what's really going on. If you're going to evaluate programs and effects, you need to know what hires and failures are costing you, again in whatever subcategories you can make sense of. If you'd like a very basic tool to get started, we have a free cost of hire and raw turnover calculator (excel) for download at http://www.prol.ws/costbenefit_jobanalysis.htm If you have data from these type of measurements, and are willing to share it for the article, or want the article when it publishes, send to turncalcs@prol.ws. |
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Calculating Turnover
posted at 8/29/2006 1:11 AM EDT
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Posts: 2
First: 7/6/2001 Last: 8/29/2006 |
We combine turnover calculations, where we analyze full time voluntary resignations against headcount. However, we also combine that data with the results of exit interviews, and cut the data by various segments of the population - job group, salary grade, male female, location, years of service, and so on. So if you are trying to use this as a diagnostic, it's much more than a simple formula. I did some research and it seems that the industry norm is full time voluntary separations divided by average headcount over a period of time. |
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Calculating Turnover
posted at 8/29/2006 1:49 AM EDT
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Posts: 3
First: 11/15/2001 Last: 8/29/2006 |
Keep it simple. We in HR have a penchant for overcomplicating every simple task (i.e. calculating turnover). 1. Determine what business value various turnover stats will provide. Will they tell you cost of turnover? Will you be able to better predict future hiring needs? Will you be able to track loss of high potentials? 2. Identify the 3 to 4 turnover statistics that are most meaningful to the business leaders you support. 3. Report them monthly with a 3 month trend line to smooth out any variations.
Just generically, Id suggest you should track: High potential turnover (should be 1% or less), turnover in your key business groups (no, theyre not all key), and overall turnover. |
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Calculating Turnover
posted at 8/29/2006 2:00 AM EDT
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Posts: 1
First: 8/29/2006 Last: 8/29/2006 |
Wow - so many responses. This should point out to you that there is no one right answer. I do agree with the one post about tracking your high potentials and key business groups - whatever else you do, those are critical. I also think it is valuable to run turnover by tenure. This helps identify at which stage in their career people are leaving. Turnover in <2yrs is indicative of onboarding problems. Problems in the 2-5 year window likely point out challenges with management... each set of data will point you in a direction but only with broad understanding of the culture of the company can you turn this turnover data into useful information - so the short answer is that there is no easy answer |
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Calculating Turnover
posted at 8/29/2006 2:11 AM EDT
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Posts: 1
First: 8/29/2006 Last: 8/29/2006 |
Does someone have any data on calculating turnover of contract employees. As a staffing firm we fill positions with Client companies with contract employees. An example is a one year contract -- if the Client or contractor does not wish to renew the contract for another length of time, would this departure count in the turnover calculations. I would think it would not but I cannot find info that would support my idea. Also what is the thought about contractors being let go by the Client prior to contract end date. We vetted the candidate and submitted for Client interview, the Client manager made the final hiring decision after evaluation. Once the contractor is terminated is that counted against our staffing company turnover or the client company turnover. Any comments would be appreciated. |
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Calculating Turnover
posted at 8/29/2006 2:43 AM EDT
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Posts: 1
First: 8/29/2006 Last: 8/29/2006 |
We have put together a couple of formulas that we share with our clients, if you are interested, I can send them over to you so you can actually see the formulas as well as the thought process that goes along with them. Please let me know! |
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