[IPAC-List] calculating turnover

[Shekerjian, Rene (CS)]

In general, I like the approach that is simple and allows the number to be greater than 100%. For example, if there are 100 positions and  200 people leave in the course of one year, you would have 200% turnover. Intuitively satisfying and easy to comprehend. If 50 people left, there would be 50% turnover. Both numbers paint a picture that is easy to understand, and depending on the industry, may be shocking or encouraging. 

The problem I see when the approach leads to 50/100 yielding turnover of 30% is that it requires mental adjustments. In one sense it is accurate, but it hides the fact that 50% of the total number of people working there have left. They may have each been in a different position or been from a small number of the positions (such as when a manager is unbearable), but the overall effect is easily understood. 

Following Mark's line of thought, I think you would want the more sophisticated approach if you were trying to compute the effect on productivity, output, profits, etc. But for a general measure of churn, I think the simple approach is better.

René


René Shekerjian
Director, Testing Services Division

Department of Civil Service
Empire State Plaza, Agency Building 1, Albany, NY 12239

(518) 402-2660 | Rene.Shekerjian at cs.ny.gov      

www.cs.ny.gov





-----Original Message-----
From: mhammer at 295.ca [mailto:mhammer at 295.ca] 
Sent: Monday, October 09, 2017 8:47 PM
To: IPAC-List at ipacweb.org
Subject: Re: [IPAC-List] calculating turnover

What is the particular measurement objective here?  Is the desired index for the purposes of simply calculating annual organizational staffing needs?  Is it to determine where there are retention issues?

I would think that the manner of calculating both denominator AND numerator would depend somewhat on the purpose of the analysis.  For instance,one may wish to consider something a departure ONLY if the incumbent leaves the organization entirely, but not if they simply move from one unit to another.

Mark Hammer
Ottawa

> I'm exploring different ways of calculating turnover and I'm puzzled 
> by
the typical approaches to defining the denominator. I'm starting with the
> assumption that turnover is about what proportion of employees have 
> left
the organization (or job, region, etc.). To arrive at that, it seems to me
> that you need to know the number of employees that left the 
> organization
in a given period of time, which should then be compared to the number of
> employees who could have left the organization in that same time period.
Almost every recommendation or practice out there, however, includes a denominator that is a) some form of headcounts and b) for a point in time
> or multiple points in time. The most common is to create an average of
the
> number of employees at the beginning of the period and the number of
employees at the end of the period. I see two limitations to this typical
> approach: 1) counting the number of employees only gets at the number 
> of
filled positions, regardless of who occupies them and b) data for a point
> in time shouldn't substitute for data for a time period. Static
headcounts
> don't represent the total number of people that could have left in a
time
> period. If you have 100 employees at the beginning of the year and 100
at
> the end of the year, the typical formula says the denominator is 100. 
> If
50 left, the turnover rate is 50%. But if 50 left and have been replaced,
> then the total number that could have left is actually 150 (the 100 
> that
started and the 50 more that were hired and are still there), which is really just a turnover rate of 30%. The only number that seems like a truly accurate denominator would be the number of employees at the beginning of the time period plus any new hires in the time period. The only challenge I see with this approach is that there is a ceiling of 100%, which makes sense on the one hand (you shouldn't have more people leaving than there are people) but can be misleading on the other, since an annual rate of 100% turnover could have been reached in the first quarter. To me, the solution is to qualify the number just like that--say
> the time period within which 100% is reached.
>
> So, given the divide between the common practice and my logic, can 
> folks
help me bridge the gap? What am I missing?
>
> Thanks in advance,
> Megan Paul
>
>
>
> Megan E. Paul, Ph.D.
> Research Assistant Professor
> University of Nebraska-Lincoln
> Center on Children, Families, and the Law
> 206 S. 13th Street, Suite 1000
> Lincoln, NE 68588-0227
>
> (402) 472-9812 Office
> (402) 472-8412 Fax
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