Turnover: what it is, how to calculate it and how to combat it
Turnover, also known as turnover, is the rate that measures the flow of employees in and out of a company. When this index is high, it can be harmful to the internal environment and impact results as well.
One of the main reasons that turnover is becoming more and more frequent is precisely because the paycheck is no longer the only reason to decide whether or not a person will stay in the company.
In this sense, managers have increasingly created strategies to retain their talents. Since this fee can become fatal to the organization’s costs as well.
Learn what Turnover is, its impacts on the internal environment, its types, how to calculate it and also some tips to apply in your company!
What is Rotation Turnover
Turnover, staff turnover or also, in English, turnover . Its meaning concerns the mathematical relationship, in percentage terms, between the number of admissions and dismissals in a given period.
Turnover, it can refer to the proportion of old workers replaced by new ones within the company. In practice, it’s that feeling you must have had at some time in your professional life of arriving at the company every day and frequently encountering new faces.
In this case, there is a high chance that the company will be dealing with a high turnover rate, which can gradually compromise the productivity and engagement of the team.
In sum, it informs about the professionals’ interest in being in the company and the lack of talent retention . Sometimes employee turnover is caused by external factors such as the economy.
But often these problems are directly linked to the organization, its processes and its management model. Examples of this are:
- Lack of a good recruitment and selection process or cultural fit ,
- Unpleasant organizational climate ,
- Below market pay and benefits
- Lack of recognition and any other problem within performance management .
- Impacts of high turnover on companies
- There are many reasons why high turnover can impact both the company and the employees themselves, check it out:
More expenses with labor charges
This is conflictual territory by nature. When the company decides to fire the professional, the labor charges will be borne by the company itself. Except in cases of dismissal for just cause.
On the other hand, when the employee himself asks for termination, it is right, not to mention the inconvenience of replacing that vacancy in a satisfactory way, in addition to the time spent.
Although the labor reform somehow preserves the bosses from the costs of labor charges through outsourcing, it is a cost to be avoided by the organization.
The more so if this cost happens frequently, as in cases where the turnover rate exceeds the acceptable threshold of good management.
Abrupt drop in productivity
As we anticipated in the previous topic, the loss, often sudden, of an employee results in a bucket of cold water for those who remain in the company, fatally generating a decrease in productivity and motivation, especially when this replacement is not carried out correctly. immediate.
Hence the expenses with new recruitment and training processes, which not only tend to burden the company, but also wear out the team until the pace of activities is resumed as before, with all employees aligned with each other.
Deterioration of the organizational climate
The “psychological” impact of turnover is usually the most serious consequence, and at the same time, the most neglected by managers in general.
It’s just that, when we work in a company with high turnover , uncertainties and insecurities automatically arise regarding our own permanence in that organizational environment.
As well as doubts about the procedures of leaders, directors and presidents. In fact, this generalized insecurity ends up harming the health of workers, culminating in absenteeism .
Countless studies show that, lately, depression, burnout and chronic anxiety – which often result in burnout syndrome – have been the main causes of absence from work.
Not to mention that, when an organization strives for the unfair dismissal of employees, the climate of apprehension inevitably tends to shift the focus away from results to give vent to rumours, fights and complaints.
Which leads to a favorable scenario for employees to already sit at the table with the thought of other types of jobs or companies, turning turnover into a huge and irreparable snowball.
The 3 types of turnover
As you can see, turnover happens in many ways and for various reasons. In this context, we can classify some types. Check it out:
Voluntary turnover occurs when the professional resigns or commits absenteeism from work.
This type of situation is indicative of management problems and it is necessary to have more than good remuneration for this employee to want to remain in the company.
How to: implement good management of goals , have a variable remuneration according to the achievement of goals and performance , emotional salary, plan of positions and careers, among other types of challenges.
Involuntary turnover happens when the company makes the decision to terminate the employee.
In this case, dissatisfaction comes from the manager himself in relation to low performance or conflicts between teams (or leadership).
The tip here is to know how to identify these problems, perform performance evaluations and establish good KPIs to evaluate the results of the employee.
Functional or dysfunctional
The functional is when the turnover is linked to the low performance of the professional. In this aspect, the person himself is the one who chooses to leave the company, without any demands on his performance.
In the dysfunctional, the employee is recognized for their excellent skills, potential and good income, but chooses to leave the company.
In these cases, there is one of the biggest problems to retain talents, motivate them and also to strengthen the feeling of belonging to the internal environment.
How to calculate turnover
As simple as this equation is, the best managers tend to ignore the need to put it into practice before planning the direction of the company.
Turnover also involves subjective factors, or not so much, such as mediocre leadership, confusing hiring policy, low pay, lack of training, that is, items that the manager is not always willing to face in order to significantly reduce turnover .
Here’s how to prevent this evil from growing and becoming a kind of cancer in your company:
Number of employees hired + Number of employees laid off = X divided by 2
X divided by the total number of employees on the last day of the month before the measured one = Y
Y x 100 = % turnover