Post by moon125 on Nov 5, 2024 22:23:38 GMT -7
According to a report by The Society for Human Resource Management, constant staff renewal is expensive for companies. Business losses when an employee is fired can reach 50%, or even 200% of their annual salary. This includes downtime, expenses for finding and adapting new specialists, etc. Impressive numbers, aren't they? That's why most large companies regularly monitor staff turnover rates.
In this article, we will talk about how to calculate the turnover rate, why employees quit, and most importantly, how to prevent them from leaving.
What is employee turnover?
First, a little terminology. Employee turnover is the rate at which employees leave a company, either voluntarily or by the employer's decision. This shopify website design is a natural and normal process as long as the rate does not exceed 3 to 7% per year. Higher turnover is a sign of problems.
Employee turnover analysis
Employee turnover rate by industry 2022
It is also important to pay attention to the company's field of activity and age. For example, if it has recently entered the market, the turnover rate is about 20%, for restaurant services this rate can reach 26%, and for retail sales even up to 48%.
How to Calculate Employee Turnover
In order to find out whether the turnover rate is within the normal range, it needs to be measured correctly. This can be done in several ways. The simplest is to use the formula: the number of employees fired per year must be divided by the average number of employees and this ratio multiplied by 100 % .
Employee turnover rate
Calculation of the turnover rate
The number of dismissed includes all those who left the organization for any reason. It does not matter whether this happened on the employee's own initiative or by decision of the management.
Types of employee turnover in a company
There are four main types of employee turnover:
1. Natural
This type of turnover promotes natural staff renewal. Some people find a new job, while others retire. New specialists, full of ideas, with a fresh outlook on business processes come to the company. This process of personnel replacement does not bring losses and has a positive effect on the development of both the company and the product. Therefore, this type of turnover can even be called useful if it remains in the range of 3 to 7% per year.
2. Adaptive
Adaptive turnover is the departure of people during the probationary period, when they try on the corporate culture and values of the company. As a rule, newcomers leave during the adaptation period if they understand that they do not like the schedule, working conditions, workload or team. Normally, adaptive turnover can be up to 40%.
3. Active
Active turnover is when people leave at their own request. Employees may leave a company, for example, due to family circumstances, relocation, a change in activity, or if they received a more advantageous offer. People may also leave due to an unsuitable corporate culture, low wages, communication problems, or a lack of career growth opportunities. If the active turnover rate is high, it means that working in the company is not so comfortable, and the management has failed to create attractive conditions.
Types of employee turnover
Active staff turnover
4. Passive
Displays the percentage of turnover caused by dismissal of employees by the employer's decision. For example, during layoffs due to a crisis in the company. Passive turnover can also be caused by the employer's dissatisfaction with a specific employee, the employee's inadequacy for the position held, failure to fulfill their duties, or violation of labor discipline. It is necessary to strive to ensure that a large share of turnover is passive.
5. Hidden
In this case, employees do not physically leave the company. However, they are disconnected from work activities and can sabotage management decisions. Most often, this type of turnover is similar to a form of employee opposition to management. Many employers do not take hidden turnover seriously. However, with a large number of oppositionists, overall productivity, discipline and product quality decrease. This has a huge impact on the company's business performance.
In this article, we will talk about how to calculate the turnover rate, why employees quit, and most importantly, how to prevent them from leaving.
What is employee turnover?
First, a little terminology. Employee turnover is the rate at which employees leave a company, either voluntarily or by the employer's decision. This shopify website design is a natural and normal process as long as the rate does not exceed 3 to 7% per year. Higher turnover is a sign of problems.
Employee turnover analysis
Employee turnover rate by industry 2022
It is also important to pay attention to the company's field of activity and age. For example, if it has recently entered the market, the turnover rate is about 20%, for restaurant services this rate can reach 26%, and for retail sales even up to 48%.
How to Calculate Employee Turnover
In order to find out whether the turnover rate is within the normal range, it needs to be measured correctly. This can be done in several ways. The simplest is to use the formula: the number of employees fired per year must be divided by the average number of employees and this ratio multiplied by 100 % .
Employee turnover rate
Calculation of the turnover rate
The number of dismissed includes all those who left the organization for any reason. It does not matter whether this happened on the employee's own initiative or by decision of the management.
Types of employee turnover in a company
There are four main types of employee turnover:
1. Natural
This type of turnover promotes natural staff renewal. Some people find a new job, while others retire. New specialists, full of ideas, with a fresh outlook on business processes come to the company. This process of personnel replacement does not bring losses and has a positive effect on the development of both the company and the product. Therefore, this type of turnover can even be called useful if it remains in the range of 3 to 7% per year.
2. Adaptive
Adaptive turnover is the departure of people during the probationary period, when they try on the corporate culture and values of the company. As a rule, newcomers leave during the adaptation period if they understand that they do not like the schedule, working conditions, workload or team. Normally, adaptive turnover can be up to 40%.
3. Active
Active turnover is when people leave at their own request. Employees may leave a company, for example, due to family circumstances, relocation, a change in activity, or if they received a more advantageous offer. People may also leave due to an unsuitable corporate culture, low wages, communication problems, or a lack of career growth opportunities. If the active turnover rate is high, it means that working in the company is not so comfortable, and the management has failed to create attractive conditions.
Types of employee turnover
Active staff turnover
4. Passive
Displays the percentage of turnover caused by dismissal of employees by the employer's decision. For example, during layoffs due to a crisis in the company. Passive turnover can also be caused by the employer's dissatisfaction with a specific employee, the employee's inadequacy for the position held, failure to fulfill their duties, or violation of labor discipline. It is necessary to strive to ensure that a large share of turnover is passive.
5. Hidden
In this case, employees do not physically leave the company. However, they are disconnected from work activities and can sabotage management decisions. Most often, this type of turnover is similar to a form of employee opposition to management. Many employers do not take hidden turnover seriously. However, with a large number of oppositionists, overall productivity, discipline and product quality decrease. This has a huge impact on the company's business performance.