How can you use HR metrics to identify departments with high turnover rates?

1 Turnover rate definition and calculation

Turnover rate is the percentage of employees who leave an organization within a given period, usually a year. It can be measured in different ways, such as voluntary turnover (employees who quit), involuntary turnover (employees who are fired or laid off), or total turnover (both voluntary and involuntary). To calculate turnover rate, you need to divide the number of employees who left by the average number of employees during the period. For example, if 20 employees left and the average number of employees was 100, the turnover rate would be 20%.

2 Turnover rate benchmarking

Turnover rate can vary depending on the industry, size, location, and nature of the organization. Therefore, it is important to benchmark your turnover rate against relevant industry standards to understand how your organization is performing. You can use sources such as the Bureau of Labor Statistics, industry associations, or HR surveys to find the average turnover rate for your sector and region. For example, according to the BLS, the average annual turnover rate for the private sector in the US was 57.3% in 2020.

3 Turnover rate analysis

Once you have calculated and benchmarked your turnover rate, you can analyze it by department, role, and demographic to identify patterns and trends. You can use HR software, dashboards, or reports to track and visualize your turnover data. For example, you can use a turnover matrix to compare the turnover rates of different departments and roles. You can also use a turnover histogram to show the distribution of turnover by tenure, age, gender, or other factors. These tools can help you spot which departments or groups have higher or lower turnover rates than others.

5 Turnover reduction strategies

The final step is to implement strategies to reduce turnover and improve retention in each department or group. Your analysis can be used to design and execute action plans that target the specific drivers of turnover. Additionally, HR metrics can be used to monitor and evaluate the impact of your interventions. Examples of strategies include enhancing employee engagement and satisfaction, improving compensation and benefits, providing training and development, creating career paths and succession plans, strengthening feedback and recognition, and fostering a positive culture and values. By utilizing HR metrics to pinpoint departments with high turnover rates, you can make improvements to your HR operations and outcomes. Adhering to these steps can help diagnose the root causes of turnover, design effective solutions, and increase employee retention and loyalty.