All Turnover Is Not Created Equal: Gaining Insight Into How Employee Departures Affect Organizational Units

Abstract

[Excerpt] Key Findings: Traditional turnover ratios–the number of employees leaving versus the total number in a unit—may not accurately describe how employee departures affect business unit performance. Traditional measures of turnover focus primarily on the quantity of employee exits, but fail to measure important qualities of turnover events. Some turnover scenarios tend to be more damaging than others, such as if a unit loses proficient workers, loses workers all at once, gains relatively less proficient workers, or loses workers from core functions rather than peripheral ones. To effectively link turnover to performance, metrics should account for when employees leave and from which positions, and accurately reflect the capabilities of exiting, remaining, and entering employees. The authors propose a new measure of “capacity” that targets both the quantity and qualities of turnover, allowing practitioners to improve the information value of attrition-related metrics.