We explain what employee turnover is, its causes, consequences and types. In addition, the staff turnover rate formula.
What is employee turnover?
In the business and administrative field, staff turnover is the measure of how long employees remain in the organization , that is, the flow of workers who enter and leave it for various reasons. It is called “rotation” because the people who occupy the positions change but the jobs remain relatively equal.
Personnel turnover has different causes and can be interpreted in different ways. There is a necessary and natural replacement margin for workers, as time goes by.
However, when the same position is repeatedly empty, that is, when it has a high turnover, there must be some reason why workers do not last. Its correct detection, analysis and resolution can strengthen the Human Resources (HR) of the company .
In addition, a company with high turnover will notice that it invests time, money and effort to train its workers for the position, and then they leave, so a replacement should be sought to be re-trained. This creates a cycle of loss of capital and human resources that must be studied and corrected as soon as possible.
Causes of employee turnover
The causes of staff turnover can be extremely diverse. Some are personal, that is, they depend on unpredictable events in the worker’s life, and others are due to the company’s own dynamics.
In any case, the causes must be sought when the rotation covers numerous jobs or when a single position fails to retain its employee for sufficient time. That is, when people do not want to stay in a company, or the company fails to find the person who will hold the position.
Usually this situation is due to problems of personnel selection (the right workers for the position are not arriving), of organizational structure (the position is excessively demanding or impossible to perform) or of direct supervision (a boss who dismisses all his employees). employees), etc.
Effects of employee turnover
A turnover of staff that is too high can mean the loss of material and human resources before the company can recover what it has invested in training its employees. In the long term, it is an inefficient management of your monetary resources.
In addition, this impacts the work environment , since from time to time there is a new person to get used to and generates a loss of confidence in the employer by employees. It also allows leaks of corporate information and little sense of belonging.
Types of employee turnover
There are two types of staff turnover: involuntary and voluntary.
Rotation of involuntary personnel . It refers to the departure of workers for reasons beyond their control, such as retirement, dismissal by a superior, etc. It is usually an indicator of problems in the mechanism of selection or evaluation of personnel.
Rotation of volunteer staff . It occurs when the worker renounces work consciously, that is, when it is he who makes the decision to leave. Obviously in this case the reasons for the rotation can be very diverse, but if it is recurring, in general it accuses some type of failure in the organization, since the workers leave for specific reasons:
- The pay is below the market average.
- The work environment is physically or emotionally harmful.
- Labor requirements are not set in advance or are unreachable.
- The organizational structure is not adequate for a harmonious performance of the position.
According to other classifications, one can speak of avoidable and inevitable rotation (in the same terms); or of the functional and dysfunctional rotation, where the first term measures skilled workers with high performance, while the second with very low performance.
Employee turnover rate calculation formula
The turnover rate is a calculation that is carried out to know how high or low the turnover of an organization or company is. This index is determined based on the number of workers linked and disconnected during a given period of business operations, in relation to the total average number of staff. This is:
Personal Rotation Index (IRP) = [(A + D) / 2 x 100] / (F1 + F2) / 2
- A is the number of people hired in the period of time.
- D is the number of people disconnected in the same period.
- F1 is the number of workers at the beginning of that period of time.
- F2 is the number of workers at the end of that period of time.
How to interpret the results
- Low index: If it gives you a low result, it can indicate that you are doing a great job of loyalty of your employees or that your workforce is “stagnant”. If it is too low or directly 0% you should think that attracting and hiring new people will give a new look to both your business and your team.
- High rate: If the effect is the opposite, the consequences that we have talked about before, such as loss of productivity or increased costs, can occur , and this could be a problem for the company and the team.
How to minimize staff turnover
The key is in an efficient management of the selection processes. It is important to hire the ideal candidate and avoid that the selection of profiles is incorrect and that you have to go through successive processes until you find the worker who fits perfectly. This would mean a significant waste of time and money for your company , so keep in mind the purpose of your company, the talent you already have within and the culture you want to achieve and maintain .
Where is this? At Talent Clue we are very clear that salary is no longer enough to attract and retain the best talent. So what do you have to do to build loyalty among your employees? Today, the purpose of a company and its reason for being are a determining factor. He thinks that each person has reasons to work in a certain company at a certain point in his life, and that they are not only the salary or the opportunities to promote. According to a survey conducted by Adecco, more than 42% of candidates think that their dream job has to be motivating.
According to Adecco, 42% of employees want their work to motivate them. #RRHH
How do you motivate your employees?
If they feel identified with the objectives of your company and the mission, you will have a lot to win and your turnover rate will be low with all the good consequences that this entails. It is important that you define your purpose, the objective that moves you and that is going to be the one shared by all the members of the company. A From there, you should know transmit inside and outside your company.
Attract, hire and fall in love with all your candidates
To reduce staff turnover you must make your employees fall in love and retain them as much as possible. To achieve this, you must start from the precise moment your company is new to them, that is, when they are candidates. The Inbound Recruiting Methodology allows you to attract, hire and fall in love with all your candidates. In this guide we give you all the details to start the machinery and identify what elements you need to create and maintain a motivated and happy team.