In human resources, turnover refers to the employees who leave an organization. The turnover rate is the percentage of the total workforce that leave over a given period. Organizations and industries typically measure turnover for a fiscal or calendar year. Employee turnover can occur for a number of reasons, including termination, resignation, retirement, death, and transfers to other sections of the organization . External factors—such as financial pressures, work-family balance, or economic crises—may contribute to both individual decisions regarding turnover, as well as the overall turnover rate of an organization. High turnover can be particularly harmful to a company's productivity, as skilled workers are often hard to replace. Companies may track turnover internally by department, division, or demographic group. Such comparisons can help reveal whether disproportionate departures are occurring on certain teams or among certain demographic groups, alerting leadership to potential systemic problems that may require correction. Organizations often survey departing employees to understand the reasons for voluntary turnover, and many find that promptly addressing identified issues significantly reduces departures. Common retention measures include benefits such as paid sick days, paid holidays, and flexible schedules.
Terminologies Employee attrition, employee turnover, and employee churn all refer to an employee quitting the job, and are often used as synonyms. For the first two terms, the difference is due to the context, i.e., the reasons for the employee leaving. While attrition is usually voluntary or natural, like retirement or resignation, turnover refers to both voluntary and involuntary departures. While turnover includes employees who leave of their own volition, it also refers to employees who are involuntarily terminated or laid off. In the case of turnover, HR's role is to replace employees, while positions vacated through attrition may remain unfilled. Employee churn refers to the total number of attrition and turnover cases combined.
Types of turnover There are five categories into which turnover can be classified.
Voluntary vs Involuntary turnover: voluntary turnover occurs when an employee voluntarily chooses to resign from an organization. Voluntary turnover could be the result of a more appealing job offer, staff conflict, or a lack of advancement opportunities, among other causes. Involuntary turnover occurs when the employer makes the decision to discharge an employee and the employee unwillingly leaves their position. Causes of involuntary turnover may include poor performance, staff conflict, or organizational downsizing. Functional vs Dysfunctional turnover: functional turnover occurs when a low-performing employee leaves the organization. Functional turnover reduces the amount of paperwork that a company must file in order to rid itself of a low-performing employee. Rather than having to go through the potentially difficult process of proving that an employee is inadequate, the company simply respects their own decision to leave. Dysfunctional turnover occurs when a high-performing employee leaves the organization. Dysfunctional turnover can be potentially costly to an organization, and could be the result of a more appealing job offer or lack of opportunities in career advancement. Too much turnover is not only costly, but it can also give an organization a bad reputation. However, there is also good turnover, which occurs when an organization finds a better fit with a new employee in a certain position. Good turnover can also transpire when an employee has outgrown opportunities within a certain organization and must move forward with their career in a new organization. Avoidable vs Unavoidable turnover: avoidable turnover occurs in avoidable circumstances that the organization can change to make employees change their minds and not quit, such as lower pay and rewards or poor working conditions. Unavoidable turnover occurs under unavoidable circumstances, such as a family move, serious illness, or death. Internal vs External turnover: internal turnover occurs when employees leave their current position and obtain a new job within the same company. It is related to internal recruitment, in which companies fill vacancies through their employees. External turnover, on the other hand, refers to cases in which the worker and employer separates, whether voluntary or involuntary. Skilled vs Unskilled turnover: uneducated and unskilled employees often have a high turnover rate, and they can generally be replaced without the organization or company suffering a loss of performance. The fact that these workers can be easily replaced provides little incentive for employers to offer generous labor contracts; conversely, contracts can greatly benefit the employer and lead to increased turnover as workers seek and eventually find more favorable employment. On the other hand, skilled and educated positions can pose a risk to the company if they leave, thereby leading to replacement costs as well as competitive disadvantages for the company.
Evolution
As the turnover data in the United States show, the turnover rate has been rising for the past 9 years. The only period that is an exception, as expected, is when the first wave occurred due to the Covid-19 pandemic, in which people had no opportunity to change their work. After this period, the phenomenon undergoes a major acceleration in growth (Great Resignation). Possible causes include desire to work for companies with better work policies (i. e. work-life balance, autonomy, smart working), the desire to have a more satisfying job and career advancement opportunities, and safety concerns related to the COVID -19 pandemic.
Following the COVID-19 pandemic and the Great Resignation, it has become commonplace for professional employees to voluntarily quit within a year of employment, known as "quick quitting."
… excerpt ends here. Continue reading the full article.
