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| In [[human resources]] context, '''turnover''' or '''staff turnover''' or '''labour turnover''' is the rate at which an [[employment|employer]] loses employees. Simple ways to describe it are "how long employees tend to stay" or "the rate of traffic through the revolving door". Turnover is measured for individual companies and for their industry as a whole. If an employer is said to have a high turnover relative to its competitors, it means that employees of that company have a shorter average tenure than those of other companies in the same industry. High turnover may be harmful to a company's [[productivity]] if skilled workers are often leaving and the worker population contains a high percentage of novice workers. Companies also often track turnover internally across departments and divisions or other demographic groups such as turnover of women versus turnover of men.
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| In the United States, the average total non-farm seasonally adjusted monthly turnover rate was 3.3% for the period from December 2000 to November 2008.<ref name="jolt2008">{{cite web |url=http://data.bls.gov/PDQ/servlet/SurveyOutputServlet?data_tool=latest_numbers&series_id=JTS00000000TSR |title=Job Openings and Labor Turnover Survey |publisher=[[Bureau of Labor Statistics]] |accessdate=2009-01-21 |year=2008}}</ref> However rates vary widely when compared over different periods of time or different job sectors. For example, during the period 2001-2006, the annual turnover rate for all industry sectors averaged 39.6% before seasonal adjustments,<ref>U.S. Department of Labor, Bureau of Labor Statistics, total non-farming separations (not seasonally adjusted), Series ID JTU00000000TSR, http://data.bls.gov/cgi-bin/surveymost?jt "''Job Openings and Labor Turnover Survey''
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| "</ref> during the same period the Leisure and Hospitality sector experienced an average annual rate of 74.6%.<ref>U.S. Department of Labor, Bureau of Labor Statistics, total separations Leisure and Hospitality (not seasonally adjusted), Series ID JTU70000000TSR, http://data.bls.gov/cgi-bin/surveymost?jt "''Job Openings and Labor Turnover Survey''
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| "</ref>
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| == Costs ==
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| When accounting for the costs (both real costs, such as time taken to select and recruit a replacement, and also opportunity costs, such as lost productivity), the cost of employee turnover to for-profit organizations has been estimated to be between 30% (the figure used by the American Management Association) to upwards of 150% of the employees' remuneration package.<ref name="SchlesingerHeskett1991">{{cite journal |first=Leonard A. |last=Schlesinger |coauthors=James L. Heskett |date=1991-04-15 |title=Breaking the Cycle of Failure in Services |url=http://sloanreview.mit.edu/the-magazine/articles/1991/spring/3232/breaking-the-cycle-of-failure-in-services/ |journal=[[MIT Sloan Management Review]] |volume=33 |issue=3 |pages=17–28 |accessdate=2009-01-21}}</ref> There are both direct and indirect costs. Direct costs relate to the leaving costs, replacement costs and transitions costs, and indirect costs relate to the loss of production, reduced performance levels, unnecessary overtime and low morale. The true cost of turnover is going to depend on a number of variable including ease or difficulty in filling the position and the nature of the job itself.
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| In a healthcare context, staff turnover has been associated with worse patient outcomes.<ref>[http://eprints.ucl.ac.uk/18978/ Williams ACdeC, Potts HWW (2010). Group membership and staff turnover affect outcomes in group CBT for persistent pain. ''Pain'', '''148'''(3), 481-6]</ref>
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| == Internal versus external ==
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| Like [[recruitment]], turnover can be classified as "internal" or "external".<ref name="Ruby2002">{{cite journal |journal=Journal of Education for Students Placed at Risk |date=January 2002 |first=Allen M. |last=Ruby |title=Internal Teacher Turnover in Urban Middle School Reform |volume=7 |issue=4 |pages=379–406 |doi=10.1207/S15327671ESPR0704_2}}</ref> Internal turnover involves employees leaving their current positions and taking new positions within the same organization. Both positive (such as increased morale from the change of task and supervisor) and negative (such as project/relational disruption, or the [[Peter Principle]]) effects of internal turnover exist, and therefore, it may be equally important to monitor this form of turnover as it is to monitor its external counterpart.
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| Internal turnover might be moderated and controlled by typical HR mechanisms, such as an internal recruitment policy or formal [[succession planning]].
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| Internal turnover, called internal transfers, is generally considered an opportunity to help employees in their career growth while minimizing the more costly external turnover. A large amount of internal transfers leaving a particular department or division may signal problems in that area unless the position is a designated stepping stone position.
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| == Skilled vs. unskilled employees ==
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| Unskilled positions often have high turnover, and employees can generally be replaced without the organization or [[business]] incurring any loss of performance. The ease of replacing these employees provides little incentive to employers to offer generous employment contracts; conversely, contracts may strongly favour the employer and lead to increased turnover as employees seek, and eventually find, more favorable employment.
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| == Voluntary versus involuntary ==
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| Practitioners can differentiate between instances of voluntary turnover, initiated at the choice of the employee, and involuntary turnover initiated by the employer due to poor performance or reduction in force (RIF).
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| The US Bureau of Labor Statistics uses the term "Quits" to mean voluntary turnover and "Total Separations" for the combination of voluntary and involuntary turnover.
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| == Causes of high or low turnover ==
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| High turnover often means that employees are unhappy with the work or compensation, but it can also indicate [[occupational safety and health|unsafe or unhealthy]] conditions, or that too few employees give satisfactory performance (due to unrealistic expectations, inappropriate processes or tools, or poor candidate screening). The lack of career opportunities and challenges, dissatisfaction with the job-scope or conflict with the management have been cited as predictors of high turnover.
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| Each company has its own unique turnover drivers so companies must continually work to identify the issues that cause turnover in their company. Further the causes of attrition vary within a company such that causes for turnover in one department might be very different from the causes of turnover in another department. Companies can use [[exit interview]]s to find out why employees are leaving and the problems they encountered in the workplace.
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| Low turnover indicates that none of the above is true: employees are satisfied, healthy and safe, and their performance is satisfactory to the employer. However, the predictors of low turnover may sometimes differ than those of high turnover. Aside from the fore-mentioned career opportunities, salary, corporate culture, management's recognition, and a comfortable workplace seem to impact employees' decision to stay with their employer.
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| Many psychological and management theories exist regarding the types of job content which is intrinsically satisfying to employees and which, in turn, should minimise external voluntary turnover. Examples include [[Frederick Herzberg|Hertzberg]]'s [[two factor theory]], [[McClelland]]'s Theory of Needs, and Hackman and Oldham's Job Characteristics Model.<ref name="HackmanOldham1976">{{cite journal |first=J. Richard |last=Hackman |coauthors=Greg R. Oldham |date=August 1976 |title=Motivation through the design of work: test of a theory | journal=Organizational Behavior and Human Performance |volume=16 |issue=2 |pages=250–279 |doi=10.1016/0030-5073(76)90016-7}}</ref>
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| Thomas suggests that there tends to be a higher level of [[Chronic stress|stress]] with people who work with or interact with a [[narcissist]], which in turn increases [[absenteeism]] and staff turnover.<ref>Thomas D Narcissism: Behind the Mask (2010)</ref>
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| === Investments ===
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| On the other hand, low turnover may indicate the presence of employee "investments" (also known "side bets")<ref name="TettMeyer1993">{{cite journal |first=Robert P |last=Tett |coauthors=John P. Meyer |year=1993 |title=Job Satisfaction, Organizational Commitment, Turnover Intention, and Turnover: Path Analyses Based on Meta-Analytic Findings |journal=Personnel Psychology |volume=46 |issue=2 |pages=259–293 |doi=10.1111/j.1744-6570.1993.tb00874.x |url=http://www3.interscience.wiley.com/journal/119295540/abstract |accessdate=2009-01-21}}</ref> in their position: certain benefits may be enjoyed while the employee remains employed with the organization, which would be lost upon resignation (e.g., health insurance, discounted home loans, redundancy packages). Such employees would be expected to demonstrate lower intent to leave than if such "side bets" were not present.
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| == How to prevent turnover ==
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| Employees are important in any running of a business; without them the business would be unsuccessful. However, more and more employers today are finding that employees remain for approximately 23 to 24 months, according to the 2006 Bureau of Labor Statistics{{Citation needed|date=August 2010}}. The Employment Policy Foundation states that it costs a company an average of $15,000 per employee, which includes separation costs, including paperwork, unemployment; vacancy costs, including overtime or [[Temporary work|temporary employees]]; and replacement costs including advertisement, interview time, relocation, training, and decreased productivity when colleagues depart.
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| Providing a stimulating workplace environment, which fosters happy, motivated and empowered individuals, lowers employee turnover and absentee rates.<ref name="GAM2005">Employee Pride Goes Wide. (2005, February 2). Graphic Arts Monthly, Retrieved February 23, 2009, from Academic Search Premier database.</ref> Promoting a work environment that fosters personal and professional growth promotes harmony and encouragement on all levels, so the effects are felt company wide.<ref name="GAM2005"/>
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| Continual training and reinforcement develops a work force that is competent, consistent, competitive, effective and efficient.<ref name="GAM2005"/> Beginning on the first day of work, providing the individual with the necessary skills to perform their job is important.<ref name="Costello2006">Costello, D. (2006, December). Leveraging the Employee Life Cycle. CRM Magazine, 10(12), 48-48. Retrieved February 23, 2009, from Academic Search Premier database.</ref> Before the first day, it is important the interview and hiring process expose new hires to an explanation of the company, so individuals know whether the job is their best choice.<ref name="Testa2008">Testa, B. (2008, September 22). Early Engagement, Long Relationship?. Workforce Management, 87(15), 27-31. Retrieved February 23, 2009, from Academic Search Premier database.</ref> Networking and strategizing within the company provides ongoing performance management and helps build relationships among co-workers.<ref name="Testa2008"/> It is also important to motivate employees to focus on customer success, profitable growth and the company well-being .<ref name="Testa2008"/> Employers can keep their employees informed and involved by including them in future plans, new purchases, policy changes, as well as introducing new employees to the employees who have gone above and beyond in meetings.<ref name="Testa2008"/> Early engagement and engagement along the way, shows employees they are valuable through information or recognition rewards, making them feel included.<ref name="Testa2008"/>
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| When companies hire the best people, new talent hired and veterans are enabled to reach company goals, maximizing the investment of each employee.<ref name="Testa2008"/> Taking the time to listen to employees and making them feel involved will create loyalty, in turn reducing turnover allowing for growth.<ref name="Skabelund2008">Skabelund, J. (2008, May). I just work here. American Fitness, 26(3), 42-42. Retrieved February 23, 2009, from Academic Search Premier database.</ref>
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| == Calculation ==
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| {{Cleanup|section|date=January 2010}}
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| Labour turnover is equal to the number of employees leaving, divided by the average total number of employees, multiplied by 100 (in order to give a percentage value). The number of employees leaving and the total number of employees are measured over one calendar year.
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| <math>\left ( \frac{Number\ of\ employees\ who\ left\ during\ the\ year} {(Number\ of\ employees\ at\ the\ beginning\ of\ the\ year + Number\ of\ employees\ at\ the\ end\ of\ the\ year)/2} \right ) \times 100</math>
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| For example, at the start of the year a business had 40 employees, but during the year 9 staff resigned with 2 new hires, thus leaving 33 staff members at the end of the year. Hence this year's turnover is 25%. This is derived from, (9/((40+33)/2))*100 = 24.66%.
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| == Models ==
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| Over the years there have been thousands of research articles exploring the various aspects of turnover, and in due course several models of employee turnover have been promulgated. The first model and by far the one attaining most attention from researcher, was put forward in 1958 by March & Simon. After this model there have been several efforts to extend the concept. Since 1958 the following models of employee turnover have been published.
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| * March and Simon (1958) Process Model of Turnover
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| * Porter & Steers (1973) Met Expectations Model
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| * Price (1977) Causal Model of Turnover
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| * Mobley (1977) Intermediate Linkages Model
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| * Hom and Griffeth (1991) Alternative Linkages Model of Turnover
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| * Whitmore (1979) Inverse Gaussian Model for Labour Turnover
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| * Steers and Mowday (1981) Turnover Model
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| * Sheridan & Abelson (1983) Cusp Catastrophe Model of Employee Turnover
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| * Jackofsky (1984) Integrated Process Model
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| * Lee et al. (1991) Unfolding Model of Voluntary Employee Turnover
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| * Aquino et al. (1997) Referent Cognitions Model
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| * Mitchell & Lee (2001) Job Embeddedness Model
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| ==See also==
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| * [[Employee retention]]
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| * [[Adaptive performance]]
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| == References ==
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| {{Reflist}}
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| ==Further reading==
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| ===Historical interest===
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| * {{cite book |last=Colvin |first=Fred H. |authorlink=Fred H. Colvin |title=Labor turnover, loyalty and output: a consideration of the trend of the times as shown by the results of war activities in the machine shops and elsewhere |publisher=[[McGraw-Hill]] |year=1919 |location=[[New York City]] |url=http://books.google.com/?id=sZo2AAAAMAAJ&printsec=titlepage |oclc=512539 |lccn=19006158}}
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| {{Workplace}}
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| {{DEFAULTSORT:Turnover (Employment)}}
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| [[Category:Industrial and organizational psychology]]
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| [[Category:Human resource management]]
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| [[Category:Employment]]
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| [[Category:Labor and demographic economics]]
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| [[Category:Workplace]]
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