Employee turnover: calculation formula. Staff turnover is

2024 Author: Howard Calhoun | [email protected]. Last modified: 2024-01-09 14:06

Browsing job sites, you will notice that the same companies periodically post ads for the same vacancy. Why is this happening? This is due to such a problem of modern labor organization as staff turnover at the enterprise. It would be a big understatement to say that churn negatively affects business building. Moreover, staff turnover is one of the reasons why it is not possible to form a permanent and well-coordinated team, which significantly lowers the corporate spirit of the company. What caused this negative phenomenon and how to deal with it?

The essence of staff turnover

Staff turnover is the movement of personnel (labor force), which is due to the dissatisfaction of employees with their position (job) or the company's dissatisfaction with a particular specialist. This is the rate that shows how often an employee loses and gains a job. Employee turnover rates are also referred to as the “revolving door index” because they make it clearhow long an employee of the company has been in office.

It should be noted that this phenomenon is a kind of "organizational plague" for most modern domestic companies. Staff turnover is also the voluntary official dismissal of an employee from one company, followed by his employment in another organization on the basis of his independent decision. Insufficient consideration of social efficiency factors can cause constant "churn". High turnover rates can also signal a threat to the integrity and stability of a company.

Types of personnel movement

Performing the analysis of staff turnover, there are five main types of it:

1. Intraorganizational - associated with personnel changes within the company.
2. External - labor movements occur between organizations, individual industries and sectors of the economy.
3. Physical - associated with the voluntary departure of an employee from the organization due to various reasons.
4. Psychological (hidden) - occurs when the employee does not physically leave the company, but actually ceases to take part in organizational activities.
5. Natural "turnover" (up to 5% per year) is a natural process in personnel policy, contributes to the renewal of labor potential.

Taking into account the last point, it can be noted that a low level of staff turnover has a beneficial effect on the company, as it brings fresh thoughts and strength to the team. Temhowever, frequent changes in the head of the organization or management staff can lead to stagnation and poor performance. Plus, sometimes this leads to the so-called “ripple effect”, when other employees of the company leave after the management team. Another unpleasant moment is the dismissal of “fresh” personnel if the funds spent on their training have not yet paid off.

Reasons for negative staff movement

Employee turnover is a "disease" of many companies. As you know, you need to fight not with the symptoms, but with the causes that caused this phenomenon. What are the sources of turnover?

1. Poor-quality recruitment often becomes the root cause for an early dismissal. The desire of the head of the company to close the vacancy as soon as possible, the desire of the recruiting agency to get their fee, the desperate attempts of the applicant for the vacancy to find the best position for themselves lead to 99% of cases of early or late dismissal.
2. A failed adaptation process, or the absence of one at all, makes the employee want to quit during the probationary period, in the first weeks of work.
3. Uncomfortable working conditions also often lead to loss of labor force. A person spends most of the daylight hours at his workplace. And on how comfortable he will be, his decision to dismiss or continue to stay in the organization depends.
4. The level of staff turnover also largely depends on the degree of staff satisfactionwith their leadership. Personal dislike, dissatisfaction with management methods quite often become the reason for layoffs.
5. Impossibility of career growth. Any employee who has ambitions and has worked for some time in the company begins to think about moving up the career ladder or about raising wages. In the absence of proper motivation and the possibility of growth and self-development, the employee leaves the company. It should be taken into account the fact that the level of wages is not always the necessary motivator for quality work. It can also be recognition, popularity and other not material, but psychological factors.



6. A person is subject to emotional influence, so situations occasionally occur when one employee leaves after his colleague, relative, friend.
7. And, of course, the incompetence of the employee, his inability to complete his work on time, the inability to work in a team can cause dissatisfaction with the employee on the part of the manager, followed by dismissal.

What contributes to staff care?

Analysis of employee turnover also helps to highlight several factors that have a direct impact on the "turnover" of the workforce:

• age restrictions (it is believed that the most risky is the departure of people under the age of 25 to another job);
• Insufficiently high skill level (the higher the skill level of an employee, the less often he changes jobs);
• the actual place of residence of the employee (the closer a person lives to their place of work, the less risk they leave the company);
• length of service (increased employee turnover is observed in the group of employees whose work experience in the organization is less than three years).

How to eliminate the causes of staff turnover?

There are certain methods to reduce the impact of the main factors of negative labor movement.

1. Competitive wages. It is necessary to revise the rates, sick leave payments, benefits and holidays with the involvement of specialists in this field. Underpayment or overpayment leads to unreasonable economic losses.
2. Implementing a fair pay structure. It is necessary to adequately assess the complexity of the work of each employee in order to identify a possible discrepancy in rates. The bonus system also needs to be analyzed and revised.
3. Stabilization of earnings. Unstable wage payments can lead to high employee turnover.
4. Improve working conditions for workers: flexible hours, comfortable office furniture, a room for rest and eating.
5. Refusing to do unnecessary work. All assignments performed by employees of the company must be really necessary. However, you should not lead people on the principle of a "juicer" - this leads to a rapid depletion of labor potential.



6. Creating a positive company image. Employees more often prefer firms with a good reputation, which can interest job candidates with interesting work, excellent working conditions, career prospects, self-realization opportunities, insurance and bonus systems.

Staff turnover - calculation formula

To find this value, you need to divide the number of employees who have worked for at least one year by the number of employees who got a job last year, and multiply the result by 100%.

The staff turnover formula may also include finding the half-life factor. This allows you to determine how much time passes before half of the employees of a particular group who started working in the company at the same time leave it. The calculation of staff turnover is needed in order to determine what the level of expenses incurred due to the dismissal of novice employees. The departure of employees from the organization can incur serious economic losses for the employer.

Calculation of staff turnover rate

This indicator can be determined based on:

• layoff rate (you can calculate the number of employees who left in one year);
• staff turnover (the number of layoffs for a certain period of time is divided by the average number of staff for the same period of time and multiplied by 100%);
• stable workforce index - based on this formula, you can determine the number of employees working in the company during the year andmore.

The layoff rate is quite widely used, since this phenomenon always causes some loss for the company. This indicator and the calculation of staff turnover helps to determine the company's costs incurred when employees are fired.

Formula for calculating the coefficient

The staff turnover rate is calculated using the following formula:

Ktek=(Xszh + Xdps)100: S, where

- Ktek is, in fact, the staff turnover rate;

- Xszh is the total number of those who left of their own free will for a period;

- Hdps is the number of those dismissed for absenteeism, a criminal record or violation of labor discipline for a specific period; - S is the average number of employees for a specific period (often an independent indicator, since it reflects the dynamics of changes in the composition collective).

Calculation of the average headcount

To find this indicator, it is necessary to mark monthly (on the 1st day) the list number of employees of the enterprise that falls on this day. At the end of the reporting period, it will be possible to determine the average headcount using the formula:

S=((S1 + S2): 2 + (S2 + S3): 2+ … + (Sn + S1n): 2)): n, where

- S is the average headcount;

- S1, …, Sn - headcount on the 1st day of each month up to the reporting month;- S1n - headcount on the 1st day of the month following the reporting month.

Fluctuations in the turnover rate between 3% and 5%considered the norm. A downward deviation can be calculated as stagnation in the team, and an excess - as a decrease in stability and an incorrect approach to personnel management.

What does the cost of turnover consist of?

Every enterprise faces such a problem as staff turnover. The formula for calculating the cost of personnel movement consists of the following indicators:

• volume of production that will be lost in case of dismissal of an employee;
• additional pay for employees who temporarily perform the duties of a retired employee;
• bringing highly skilled workers to easier jobs;
• the cost of waste and marriage received during the development of work by a new employee;
• costs associated with attracting and selecting candidates for a vacancy;
• expenses aimed at training or retraining employees;
• administrative costs associated with removing the employee from the payroll;
• decrease in labor productivity during the training of new employees.

Methods for minimizing staff turnover

Reducing staff turnover is achieved through the following personnel management methods:

• determination of the reasons that caused the dismissal of each of the employees, and statistical accounting of these reasons;
• maintaining general statistics on layoffs;
• introduction of programs for horizontal and vertical movement of personnel;
• development of selection and adaptation methodsemployees, as well as the use of mentoring;
• improving the company's image in the labor market;
• creation of temporary working groups to work on projects;
• formation of personnel reserve;
• engaging HR managers and consultants to work with personnel.

Ways to retain employees

To retain valuable employees at various levels of the career ladder, companies resort to various means and methods. So, for example, various packages of benefits for ordinary employees and management staff can be formed. For example, ordinary workers may be paid for public transport at the expense of the company, medical insurance, free lunches and refresher courses. The benefits package for managers may consist of such items as flexible working hours, provision of loans and credits on favorable terms, remuneration for the implementation of the plan, special promotional offers.