The staff turnover index is a human capital management measure, through which it is possible to identify problems of job dissatisfaction among employees or deficiencies in the selection and hiring processes, among others.
What is staff turnover
Álvarez (p.51) defines staff turnover as the proportion of people who leave an organization, discounting those who do so inevitably (retirements, deaths), over the total number of average people of that company in a a certain period of time - these are usually considered annual periods.
Obando (p.28) defines it as the effect of certain causes or phenomena that may be present inside or outside the organization, and which also determine the attitude of the staff and predispose them to withdraw from said social body in a given moment. Some of the internal causes are as follows:
- Benefits policy Salary policy Type of supervision Opportunities for professional advancement Human relationships in the organization Physical conditions of the work environment Organizational culture Criteria and training programs and performance evaluation criteria Degree of flexibility of the organization's policies. And as causes or external phenomena can be pointed out the supply and demand of human resources in the market, employment opportunities in the labor market and the current economic situation. (Obando, p.28)
How the staff turnover rate is calculated
According to Castillo (p.68) the turnover rate is determined by the number of workers who join and leave in relation to the total average number of personnel in the organization, in a period of time. The personnel turnover rate (IRP) is expressed in percentage terms using the following mathematical formula:
Where:
- A: Number of people hired during the period considered. D: Persons separated during the same period. F1: Number of workers at the beginning of the period considered F2: Number of workers at the end of the period.
Cagigas and others (p.191) note that some more specific ones are derived from this basic index:
- Unwanted turnover rate. Total number of employees in critical or high potential positions leaving per month among the average number of employees. It can also be calculated by taking the total number of outputs as the denominator. Voluntary versus involuntary turnover rate. Voluntary rotation refers to those employees who leave on their own initiative compared to those whose cause for termination is dismissal, of any kind and for any reason. Avoidable versus unavoidable turnover rate. Inevitable turnover is one that occurs due to causes beyond the control of the company. For example: the husband or wife who follows their spouse in his professional destination to another city; pregnant women who do not return to the company after giving birth; the people who leave to start a new career of a different nature; etc. Distinguishing between these types of exits and those that we could have avoided is very useful. Dysfunctional versus functional rotation index. The functional rotation refers to that of people with high performance and high performance, compared to people with lower performance. Complementary turnover indicators. It is useful for enlightening to carry out a detailed study of these indices taking into account different segmentation criteria such as: workplace, age groups, hierarchical levels, seniority in the position, etc. It also provides information to follow its evolution over time. Finally, it is convenient to compare them with data from other organizations.
Problems generated when there is a high rate of staff turnover
Reyes (p.163) mentions as main drawbacks:
- high costs of selection and training of new employees, added to their low efficiency; little generation of a sense of belonging and low coordination of constantly changing employees; cracking of the company's image, which will be perceived as a place where employees employees are uncomfortable; potential leaks of valuable corporate information.
Chapman and White (p.33), on the other hand, indicate that beyond the visible costs (costs of termination of employment, recruitment, selection, hiring and training, among others), a high turnover rate produces hidden costs such as: the vacant position until the new hire arrives, the temporary loss of production, the erosion of morale and stability of those who remain, the loss of efficiency and the effect on customer relationships until the new hire acclimates to your post. For this reason, they place staff turnover as one of the most significant causes of the decline in productivity and the decline in morale in both the public and private sectors and explain that, as those employees with the most talent are those who have greater probability of exiting,the company that manages to retain them will be generating a competitive advantage over its competitors.
In the following interview, Mr. José Luis Aliaga, an expert in talent management, raises some of the most common causes that generate high rates of staff turnover in organizations. (2 videos, 23 minutes)
Bibliography
- Álvarez Orozco, Marcos. Retail Dashboard: The key indicators of highly effective stores. Profit Editorial, 2013.Cagigas, Jorge and others. Silvia's ten challenges. Header Books, 2011, Castillo Aponte, José. Personnel management: a focus on quality. ECOE Ediciones, 2006.Chapman, Gary and White, Paul E. The 5 languages of appreciation at work: How to motivate staff to improve their Company. Editorial Portavoz, 2011. Obando Millán, María Patricia Del V. Staff turnover in the company SIGO SA Undergraduate Work, 2009. Reyes Ponce, Agustín Personnel administration. Human relations. First part. Editorial Limusa, 1991.
