Turnover Ratio - Management Effectiveness and Organisation Health

Description

Turnover Ratio calculates turnover by division, department, manager and job role/function.  Voluntary separation and involuntary separation are reported separately.

Business Case

Turnover Ratios for different departments, divisions and managers can be compared internally to assess management effectiveness and overall organisational health.  Turnover Ratios for different job roles and functions can be compared to that of industry peers to assess the company's competitive position.

Required Data

Employment Start Date   Example: 3-12-2001
Employment End Date   Example: 7-24-2005

Sample

Implementation Considerations

There are many considerations that can be taken into account when defining the turnover ratio calculation.  In fact, multiple turnover ratio metrics may be desirable.  Some metrics are listed below.  Your HumanConcepts Professional Services Consultant can work with you to define calculations that take into account the available data and your business needs.

Division, Department, Manager

Example: Aerospace Division, Supply Chain Department, John Smith
Turnover Ratios become significantly more useful if turnover numbers can be associated with a Division, Department or Manager.  This level of granularity makes it easier to analyze the data and create programs that could affect the rate of turnover.  Turnover Rate is a significant measure of Senior Management performance; thus, most companies choose to report this metric in a way that relates directly to individuals managing particular departments or divisions.

Job Role, Job Function

Example: Manager, Business Analysis
Job Role and Job Function information make it easier to compare turnover rates for same or similar roles at different divisions, departments or geographies.  Companies that have standardized Job Role and Job Function names can take advantage of research reports that show average turnover for similar positions in a given industry or geography.

Separation Reason

Example: Voluntary, Involuntary
Turnover is usually reported as voluntary or involuntary.  Some companies also track involuntary separation as individual actions or layoffs.  Review of voluntary separation calculation is especially important for high-performing employees and Executives.

Employment Status

This data is necessary to distinguish between employees who left the company and those who moved to other positions or retired.