The turnover rate: concept, calculation and evaluation– Employee Turnover Spreadsheet

Business organizations are subject to staff variations: retirement, death, dismissal, voluntary termination of workers … These changes in the workforce are measured by the staff turnover rate; A Human Resources indicator that provides us with important information about the job satisfaction of professionals and the renewal of human capital.

However, for its correct application it is necessary to understand what the turnover is, how it is calculated and, above all, how this data should be interpreted.

The turnover rate
When we talk about staff turnover, we refer to the volume of professionals who enter a company and leave it for different reasons. As Idalberto Chiavenato says in Human Resources Administration, this concept refers to “the fluctuation of personnel between an organization and its environment”.

Therefore, the turnover rate is defined by Gabriel Jiménez, in his work Personnel Rotation, as “the percentage relationship between admissions and withdrawals in relation to the average number of workers in the organization, over the course of a certain period . ”

In similar terms, José Castillo Aponte explains in Personnel Administration: an approach to quality, who points out that the turnover rate “is determined by the number of workers entering and leaving an organization, in relation to the total amount average staff in the organization, over a period of time. ”

How this parameter is calculated (IRP)
The calculation of the turnover rate is based on the percentage relationship between the volume of entries and exits, and the resources available in the organization over a certain period.

The turnover rate (IRP) can be calculated using the following mathematical formula:

Staff turnover rate = (A + D) / 2 * 100 / PE

Being A, the number of people hired during the period considered; D, the unlinked persons during the same period; PE, is the »effective average» of the period considered. It is obtained by adding the number of employees existing at the beginning and end of the period, and the result is divided by 2

Staff turnover rate evaluation
Now, how should we interpret the results? As Chiavenato points out, “staff turnover is not a cause but an effect, a consequence of certain phenomena located inside (salary policy, social benefits, leadership …) or abroad (supply and demand of Human Resources, economic situation, employment opportunities…) of the organization that condition the attitude and behavior of the staff ”.

Therefore, staff turnover does not have to be understood as something negative. The key is to know how to analyze these data and infer what are the causes that cause them, their impact on the organization and implement the appropriate talent management strategies, if necessary.

For example, if the turnover rate is too high, it is likely that the company has not been able to generate a sufficient sense of belonging and job satisfaction among its workers. This result is linked to negative and unstable work climates, low productivity and efficiency of the equipment, and negative impact of the corporate image. On the other hand, if the turnover rate is too low, it can also lead to aging and stagnation of the organization that curbs innovation and enthusiasm of professionals.

What would be ideal? The optimal staff turnover rate would be the one that reflects a dynamic and constant balance through the control mechanisms that self-regulate this employee turnover, allowing to retain professionals who add value to the company and replace those others that harm the work. and business development.

Among these mechanisms are personnel evaluations, such as those carried out by the P&A Group, with which we can obtain a deep understanding of the behaviors, capacities, competencies and interests of a worker, so that we can select and retain professionals more suitable

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