[IPAC-List] calculating turnover
Kevin Stanek
stane040 at umn.edu
Tue Oct 10 14:07:37 EDT 2017
To reiterate, dividing the number of terminations by the average headcount
does not always give a good indication of the "% of the total number of
people working there who have left", which is what makes it misleading for
many users. Consider the illustrative example below of a recently created
division/company:
Headcount at the End of Each Month (including new hires) Terminations in
Each Month
January 5 0
February 5 0
March 5 0
April 5 0
May 5 0
June 5 0
July 4 1
August 4 0
September 4 0
October 4 0
November 4 0
December 100 10
The total number of terminations in the year is 11 and the average
headcount is 12.5, which leads to a turnover rate of 88% by the typical
calculation, but that doesn't mean that 88% of the total number of people
working there left. It means that 88% of the *average* number of people who
worked in this division left, which is not usually what the
leader/organization actually cares about, in my limited experience.
Kind regards,
Kevin
On Tue, Oct 10, 2017 at 8:27 AM, Shekerjian, Rene (CS) <
Rene.Shekerjian at cs.ny.gov> wrote:
> 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
> > _______________________________________________________
> > IPAC-List
> > IPAC-List at ipacweb.org
> > https://pairlist9.pair.net/mailman/listinfo/ipac-list
> >
>
>
>
>
>
> _______________________________________________________
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