# Employee Turnover Rate Calculation - PDF

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```					Volume LVII, Issue 2                       Celebrating 60 Years of Service
Report                    February 2006

Turnover Trends
ers in the US, whether in small             the fundamentals of calculating,
business or Fortune 500 corpora-            understanding, and reducing
the impact of employee turnover             the most recent (and somewhat
on profit, productivity, employee           surprising) national trends.
satisfaction, and customer experi-               Calculating turnover in a way
mented complex methods of                   tion can be a simple mathemati-
measuring turnover, launched                cal calculation. As a starting
creative recruitment and retention          point, you may want to do a
programs, trained managers, sur-            monthly calculation of your
veyed employees, and silently               turnover. To do this calculation,
cursed the problems caused by               you simply divide the number of
turnover.                                   terminated employees by your
Reliable data on the reasons           organization’s headcount (nor-
for employee turnover has been              mally captured on the last day of
collected and analyzed, both on a           the month). For example, if your
national level and within individ-          organization has 55 employees
ual organizations. We have so               and lost 7 employees in January,
items tended to be in the top four
much data, and so many                      your monthly turnover rate was
or five reasons employees stayed
“experts” offering opinions, that           7/55, 12.7%. If you finish the year
at their jobs (or left the job if
it is very easy to get caught up in         at this rate (called annualized
these things did not exist). Issues
the “paralysis of analysis.”                turnover) you will lose and
such as pay and benefits were in
the top ten, but tended to be
Wow!
ranked seventh or lower.
Inside This                                    To discuss more complex
turnover analyses (such as monthly
annualized turnover, rolling twelve
Recently, according to surveys
by two national staffing firms,
issues such as pay and benefits
Issue                                  month turnover, turnover by reason,
turnover by location, manager or
function) please call a SESCO con-
have moved into the top five,
dropping job engagement items
into the bottom of the top ten.
sultant for assistance in setting up a
Turnover Trends...................1                                                     So what do we do with this
meaningful calculation for your
new information? SESCO recom-
organization.
mends that you continue to focus
Constructive Feedback........2                  Up until the last two years,
on the job engagement factors,
statistics showed that employees
they are still in the top ten, and
were most likely to stay at their
Positive Communication.....3               places of employment when they
they still matter a great deal. We
also recommend that great care
felt engaged, appreciated, and
Client Inquiry........................4                                             be taken before pursuing an ini-
had a “great boss.” Year after
year, these “job engagement”                        See TURNOVER, page 2
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The SESCO Report                                                                                  February 2006

Constructive Feedback
Constructive Feedback is          misinterpreta-
responding to an employee’s per-      tions. A way to
formance through positive com-        do this is to sim-
ments, offering specific sugges-      ply ask.
tions for improvement and giving
the person an opportunity to          5. Offer specific
respond to these suggestions.         suggestions.
1. State the constructive purpose     only negative
Indicate what you would like to       the feedback is
cover and why it’s important          not constructive -
it is destructive.
2. Describe specifically what you
Make sure that
have observed.
you offer sugges-
Describe what you have seen -
tions that show
not what someone else has told
you. This allows you to give very
help the employ-
specific examples of the behavior
ee improve their
you wish to discuss.
behavior or per-
3. Describe your reactions.           formance. Do
Tell your employee how you felt       this by providing
about their behavior, or describe     practical, specific
suggestions on how they can          agreed upon by the supervisor
the consequences of their behav-
improve or change their behavior.    and the employee. Do this by
ior to them and others.
reviewing the major points you
4. Give the other person an           6. Summarize and express your        discussed and stress your confi-
opportunity to respond.               support.                             dence in their ability to improve.
Getting the other person’s views      You can avoid misunderstandings
creates an opportunity to check       and misinterpretations by sum-        - Joel Cullum, Senior Vice President
for any misunderstandings or          marizing what was covered and

TURNOVER
(continued from page 1)

tiative to raise wages and            your market. These factors must      and managing employee selec-
enhance benefits. Wages and ben-      also be considered in the context    tion processes, conducting
efits are, in many organizations,     of your organization’s ability to    employee surveys, and facilitat-
the highest variable costs you        pay for any enhancements.            ing management training are all
must manage. Before implement-             In short, SESCO recommends      SESCO core competencies, and
ing changes, it is important to       that any decision regarding your     we stand ready to assist you in
consider factors including wages      compensation and benefits sys-       identifying and reviewing your
and benefits of other employers       tems be implemented only after       need for these approaches in
in your region and industry,          careful consideration- be sure you   combating your organization’s
which employees it is most criti-     are not just “throwing money at      turnover.
cal for you to retain, your current   the problem.”
compensation systems, and the              Compensation systems, bene-                - Clark Phipps. Director-
availability of qualified labor in    fit design and selection, creating              Training & Development

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February 2006                                                                              The SESCO Report

Handling                      Communications
Employee                      Employees Like to Hear
Suggestions                         Some commu-
nications are more
welcome than oth-
1. Take each suggestion            ers. The following
seriously.                      is a list of things
that employees
2. Let employee know you will      like to hear from
consider it.                    their supervisor.
3. Follow up on every sugges-      • Role clarifica-
tion.                           tions: What’s
expected of the
4. Report to employee on your      employee, how
findings. If you have to, do    much authority
research or check with some-    and responsibility
one else.                       the employee has,
and the employ-
5. Thank the employee for the      ee’s job assign-
suggestion.                     ments.

• Praise and
recognition:                          • Information from a supervisor:
Client Feedback                     A supervisor’s compliments on a
job well done, compliments in the        that makes an employee feel
“SESCO is one of the best sup-      presence of third parties, and           important by being “in the
port organizations I have ever      demonstrations of appreciation.          know” or being let in on
dealt with. Our consultant                                                   things.
went out of the way to make         • Constructive criticism and feed-
our training session industry       back: Properly given by a super-         that pertains to departmental
specific.”                          visor, this demonstrates interest        progress, to other work team
and implies a personal and pro-          members, to future plans for
Ashley Bright -    fessional concern.                       the department, and to con
Appalachian Oil Co., Inc.                                            template changes.
• Demonstrations of interest by
the supervisor: Communications           that pertains to the overall
reflecting interest in the employ-       organization in terms of sales,
ee’s professional growth and             forecasts, objectives, future
development, working with the            outlook, and general internal
Congratulations to                 employee to help her or him do a         changes of which the
better job, and full attention dur-      supervisor is aware.
Universal Companies                 ing conversation (as opposed to
lack of eye contact or doing             that pertains to promotions,
selected as Small                 something else).                         merit increases, desirable job
Business Success                  • Request for information or
assignments, and favors that
can be granted by the
Story of the Year -                assistance: A supervisor asking
supervisor.

Southwest Virginia                 or consulting about relevant mat-       - Emmett Bane, Senior Consultant
ters on the job.
Finalist

Page 3
The SESCO Report                                                                                                                        February 2006

P.O. Box 1848
Bristol, TN 37621                                                                                         RETURN SERVICE REQUESTED
(423) 764-4127 • FAX (423) 764-5869
www.sescomgt.com
email: sesco@sescomgt.com

SESCO Client Inquiry - Staff Response                                                                   SESCO Seminar
Schedule/Public Speaking
Question: Under what circum-                       • The participant becomes cov-                                         March 14, 2006
Jump Start to Supervision
stances may we terminate a partici-                ered under any other group                                              Clark Phipps
pant’s COBRA coverage prior to the                 health plan, provided the new                                     Centre at Millennium Park
Johnson City, TN
end of the coverage period?                        plan contains no limitations for
March 28-29. 2006
coverage of any “pre-existing                                     Effective Leader/Manager
Answer: While minimum cover-                       conditions.”                                                             Clark Phipps
Centre at Millennium Park
age periods are set by the COBRA                                                                                         Johnson City, TN
statute, employers are permitted                   • The participant has been grant-                                      March 30, 2006
A Crash Course in Human
to terminate a participant’s cover-                ed the 11-month extension for dis-                                 Resource Management
age before the expiration of an                    ability and is determined by the                                        Clark Phipps
Tennessee Bankers Association
applicable 18, 29 or 36-month                      Social Security Administration to                                       Nashville, TN
period under the following cir-                    no longer be disabled.                                                   April 3 - 4, 2006
cumstances:                                                                                                   Recruitment and Retention: Strategies to
Become an Employer of Choice
• The participant subsequently                                            Clark Phipps
Virginia Association for Home Care Richmond, VA
• The employer ceases to main-                     enrolls in Medicare.
tain any group health plan for                                                                                           April 5-7, 2006
Human Resource Expo
employees.                                             COBRA regulations require                                          Clark Phipps
Johnson City, TN
that the employer or plan admin-
April 25-27, 2006
• The participant fails to make a                  istrator provide notice to each                              Human Resource - The Basic Course
timely payment of any required                     participant of any termination of                                     Clark Phipps
Centre at Millennium Park
COBRA premium. Employers                           continuation coverage that takes                                    Johnson City, TN
must provide at least a 30-day                     effect prior to the end of the max-                                 May 16-17, 2006
grace period for payment before                    imum period of coverage applica-                          Human Resource - The Advanced Course
Clark Phipps
terminating the coverage.                          ble to the qualifying event.                                   Centre at Millennium Park
Johnson City, TN

This publication is designed to provide accurate, authoritative information in regard to the subject matter covered. It is distributed with the under-
standing that the publisher is not engaged in rendering legal service. If legal service is required, the services of legal counsel should be sought.
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