BUS209: Organizational Behavior

Employee Turnover

• Turnover
  
  • The process in which employees leave an organization and have to be replaced
    
• Impact of Turnover
  
  • Inability to achieve business goals
    
  • Loss of "image" to attract other individuals
    
  • High costs of turnover and replacement
    
  • Churn - hiring new workers while laying off others
    
    

Types of Turnover

• Involuntary - Lay offs
  
• Voluntary - Leaving for personal reasons
  
• Functional - Retirement
  
• Dysfunctional - Fired
  
• Controllable - Downsizing
  
• Uncontrollable - Personal reasons
  
  

Measuring Employee Turnover

$\dfrac{\text{Number of employee separations during the month}}{\text{Total number of employees at midmonth}} \times 100$

Computing the Turnover Rate:

• Determining Turnover Costs
  
• Separation costs
  
• Vacancy costs
  
• Replacement costs
  
• Training costs
  
• Hidden/indirect costs
  
  

Measuring Employee Turnover (cont’d)

• Ways to Measure Turnover:
  
  • Job and job levels
    
  • Department, units, and location
    
  • Reason for leaving
    
  • Length of service
    
  • Demographic characteristics
    
  • Education and training
    
  • Knowledge, skills, and abilities
    
  • Performance ratings/levels
    
    

Retention of Human Resources

• Myths about Retention
  
  1. Money is the main reason people leave.
  2. Hiring has little to do with retention.
  3. If you train people, you are only training them for another employer.
  4. Do not be concerned about retention during organizational change.
  5. If solid performers want to leave, the company cannot hold them.

Figure 3.2 Drivers of Retention

Managing and Enhancing Retention

Source: Saylor Academy, https://s3.amazonaws.com/saylordotorg-resources/wwwresources/site/wp-content/uploads/2013/02/BUS209-2.2.4-Employee-Turnover-FINAL.ppt
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