Part 1 of 2 Series: Understanding Turnover in Your Organization

Most organizations report turnover as a simple percentage within a job, department, division or the entire organization.  However, HR should realize that providing only a simple percentage provides little information to executives regarding the impact of turnover throughout the organization.

Throughout my work with many organizations struggling with turnover issues, I have recommended additional metrics to measure turnover that provide much more useful information and help drive the action necessary to reduce turnover.    A comprehensive "turnover dashboard" is the best method for reporting turnover within your organization.

Some of the key metrics we would recommend including on a turnover dashboard include:  

Critical Position Turnover:  This means measuring turnover that occurs within key positions, as identified by executive leadership.

Weighted Performance Turnover: This involves weighting voluntary turnover using the latest performance ratings for the employee.

High-Performer Turnover:  This means tracking turnover among the number of well-known employees who are considered high-performers.

Turnover by Manager: Because turnover issues may be localized to a few managers, it is important to identify exactly who in the organization is responsible for turnover.  The organization should also examine the correlations between employee engagement or organizational climate scores and turnover by manager.

Turnover by Division, Department, Functional Area:  Because turnover in high-profit, high-growth units may have a bigger impact on organization performance, it is critical to identify benchmark turnover across these key units.

Competitor Turnover: Although sometimes more difficult to measure, turnover rates for both average performers and top-performing competitors in your industry should be reported to put your organization’s turnover rates in perspective.

Internal “Cross-Lines” Turnover:  Even though employees may not be leaving the organization, high or low internal transfers between departments, divisions or functional areas can indicate serious problems with individual managers or the requisition system within the organization.

In addition to the critical measures listed above, additional turnover metrics that are beneficial to monitor include: 

• The correlation between turnover rates and organization profitability (division, business unit, etc.)
• The hard-costs associated with losing an average performer
• The hard-costs associated with losing a high performer in a key position
• What companies or competitors your organization is losing key employees to
• Exit interview data should be collected from voluntary terminations in order to identify any internal management or organizational issues
• Employee engagement or organizational climate survey data should be regularly correlated with turnover data by manager, department, division, organization, etc. 

Stay tuned: Part 2 of this series will address how to Reduce Turnover in Your Organization

To report turnover only as a simple percentage provides little information to executives regarding its impact throughout the organization.