Most HR departments miss an opportunity when it comes to measuring and reporting turnover. The goal of any HR metric is to provide information on how to improve the measured item. As Peter Drucker said, “what gets measured gets done.” Reporting turnover as simply a percentage of the workforce can be made more meaningful and more useful by diving down into the detail and adding data and information that quantifies the cost and provides insight on root causes and how to make improvements. Some examples of this are:
- Along with your company’s turnover rate, add the turnover rate of competitors, giving a baseline or something to compare against
- Add the percentage of turnover that was top performers or top salespeople, the percent of turnover in each department and for each manager, the percent in high impact jobs and hard to fill jobs
- Add the percentage of turnover in the first year of employment, which can be linked to possible employee dissatisfaction
- Add how long it takes to fill positions, the recruitment cost of filling the positions, and how long before they are up to the minimum productivity level
- Add exit interview information such as how many went to work for competitors and which competitors. Exit interviews may also indicate whether turnover was preventable, which may, in turn, provide managers with information needed for improvement
- Add the dollar impact of lost sales where applicable, i.e., sales turnover, which can be directly linked to revenue and economic impact on the company
The involuntary turnover metric is also important. It can indicate that the company is keeping low performers which can also be costly. With this additional information, conclusions are now more easily drawn and the cost of turnover is more tangible (i.e., the cost of losing individuals in key positions is likely higher than losing individuals in low-impact positions). If losing hard to fill jobs, the job market may be tight and replacing these employees could be expensive. Losing individuals with strong reputations within the industry can impact stock analysts’ assessments of your firm. It can also send negative signals throughout your firm and the industry, which can, in turn, lead to more turnover.
Some additional information that can be helpful when included with the turnover report, include:
- Leading causes of preventable turnover
- Satisfaction or frustration levels of those who left which could impact the company’s external image
- Lowest turnover rates within the firm which can provide a target for managers to aim
- The likelihood that the person that left will take others with them
Today’s world moves fast, and as an employer, you should constantly be monitoring and adjusting your business operations to meet the ever-changing wants and needs of your employees. At WageWatch, we offer accurate, up-to-date salary survey reports and pay practice reports that will allow you to stay current with the times. This information is highly beneficial in creating the best salary and benefits packages that meet or rival the industry standards. For more information on our services, including market compensation data, benefits survey data and salary reports, please call WageWatch at 888-330-9243 or contact us online.