Blog home

11 Metrics for Understanding Employee Turnover

In the journey we’ve collectively navigated through in recent years, the spotlight shone brightly on the need for workforce stability. Now, more than ever, we’re all paying attention to employee turnover and the metrics that help us understand and improve employee retention.

We get it – companies are eager to untangle the trends and reasons behind their team’s changes. And it’s not just about employees leaving; turnover influences company culture, teamwork, and productivity. High turnover rates may signal problems ranging from management issues to workplace culture.

It’s for sure a challenge to quantify drivers that lead to employee turnover and even more so, to have systems that can help predict and proactively address potential issues before they impact organizational stability and employee morale. It’s a challenge, but it’s not impossible.

In this post, we will explore 11 metrics that we recommend tracking to measure and prevent employee turnover.

1. Number of Leavers

The Number of Leavers metric serves as a crucial part in evaluating an organization’s workforce health. Through this metric, by tracking contract terminations people analytics professionals spot trends that could point to underlying problems with the company culture, management practices, or employee satisfaction.

Definition: The number of contract terminations gives a summary of employees leaving the organization. It includes all departures, regardless of whether they resigned or had their contracts terminated by the company.

Insight: This metric provides insight into the attrition of organizational headcount and the workload of offboarding employees. It’s crucial to understand these numbers within a time context and per department, location, and so on, to uncover outliers. Supplement this data with exit surveys for a deeper understanding of the reasons behind these departures.

2. Turnover Rate

The turnover metric is crucial in identifying patterns and issues that could cause employee departures. Comparing turnover rate with industry and competitor data provides insights into the company’s market position. The impact of turnover on morale, productivity, and business performance should also be considered.

Definition: This metric displays the total rate of contract terminations, as well as the annualized turnover rate over time, depending on your view setup. The turnover rate is the percentage of employees who left the company during the observed time period.

Insight: This metric shows attrition trends and the HR effort in offboarding. Understand these numbers in the context of time and demographics to spot turnover anomalies. Combine this with exit surveys for deeper insight into departures and talent loss.

3. New Hire Turnover

Monitoring New Hire Turnover is crucial as it mirrors the efficacy of recruitment and onboarding procedures. A high turnover rate can suggest problems with job expectation alignment, workplace environment, or onboarding methods. This also directly affects recruitment expenses and employee morale.

Comparing New Hire Turnover to overall turnover rates provides insight into how effectively new hires are integrated relative to the broader workforce.

Definition: The First-year Attrition Rate represents the number of employees who left the company before reaching their 12 months of service within a specific period.

Insight: When observed in relation to the Quality of Hire, it can indicate areas for improvement in recruitment and onboarding processes.

4. Experience Loss

Experience Loss is a useful indicator of the effect of employee turnover on the organization’s collective knowledge. Tracking Experience Loss trends over time can reveal patterns and gauge the effectiveness of the organization’s retention strategies. Additionally, comparing Experience Loss to industry standards and competitor data offers valuable context. It can help organizations determine if they face unique problems or if the issues are common across the sector.

Definition: Experience Loss refers to the total loss of organizational tenure within a certain period due to voluntary turnover.

Insight: Experience Loss is related to the costs associated with turnover. The quality of experience is crucial, so consider analyzing this by performance rating and other employee segments.

5. Performance Loss

Quantifying the impact of attrition on performance is crucial for organizations. It helps measure the effect of employee turnover on overall productivity by highlighting the loss of high performers and skilled workers and identifying the areas of business with impaired operational efficiency. By monitoring this metric, companies can understand the direct and indirect costs related to attrition. These costs may include the loss of institutional knowledge, increased workload for the remaining staff, and the resources needed for recruiting and training new hires.

Definition: Performance loss refers to the total productivity decrease of a company (assessed through performance ratings) due to employee attrition. It serves as an indicator to identify if those leaving the company are causing a disproportionate productivity loss.

Insight: This metric offers a comprehensive perspective on the effects of attrition on a company’s efficiency and effectiveness.

6. Diversity Loss

Understanding the impact of turnover on diversity (Diversity Loss) allows organizations to gauge the success of their diversity and inclusion initiatives. This ensures that these strategies effectively attract and retain a diverse talent pool. Monitoring this metric lets companies address factors that lead to higher turnover rates among certain demographic groups proactively. This is crucial for promoting a diverse and inclusive workplace, boosting employee morale, and improving the company’s reputation.

Definition: The diversity structure of those who are leaving a company gives insight into who left the company regarding relevant diversity categories and whether any categories of employees are being retained at lower rates than others.

Insight: The Diversity Loss metric assists companies in identifying whether specific employee groups are leaving at disproportionate rates. This provides insights into potential problems with workplace inclusivity, equity, and cultural dynamics.

7. Avoidable Turnover

Avoidable Turnover points to underlying workplace issues. By monitoring this, organizations can proactively address factors causing employee dissatisfaction, which may lead them to leave the company. This metric measures how efficiently and quickly an organization reacts to employee concerns and considerations about job changes. For effective analysis of Avoidable Turnover, it’s essential to gather data from various sources. These include exit interviews, employee surveys, and one-on-one conversations with managers.

Definition: Avoidable Turnover represents the proportion of employees who have expressed their intentions to leave their job to superiors or the HR team. This metric is often examined in conjunction with Exit Consideration to gauge how proactively the organization responds when an employee begins contemplating departure.

8. Regrettable Turnover

Regrettable Turnover is a metric used by People Analytics professionals, to identify patterns and trends in employee attrition that may adversely affect the organization’s performance and growth. By understanding the reasons behind regrettable departures, organizations can develop targeted retention strategies, and implement interventions that address the underlying causes.

Definition: Regrettable Turnovers refer to instances when an employee’s departure negatively affects the team. This is evaluated based on the direct manager’s willingness to rehire the employee and the perceived loss of competency within the team that needs to be replaced.

Insight: Typically signifying the loss of a high performer, Regrettable Turnovers are undesirable departures. For future retention strategies, HR can analyze the reasons for leaving provided during the exit process.

9. Exit Reasons Analysis

Exit Reasons Analysis offers important insights into the causes of employee turnover within an organization. By identifying the precise reasons for employee departures, organizations can focus their efforts on resolving these issues, fostering a more engaging and supportive work environment. Orgnostic employs a particular method to identify the reasons employees leave a company. It examines aspects where employees anticipate gains or losses with a change of employer.

Definition: Exit Reasons Analysis helps you structure and understand your ex-employees’ self-reported reasons for leaving the company.

Insight: The metric examines what your employees anticipate gaining or losing due to a change in employer.

10. Survival Analysis

Metrics monitoring is vital in HR, but so is predictive analytics. It helps foresee trends and potential problems, aiding in the creation of proactive workforce management strategies. The Survival Analysis method via Orgnostic provides a snapshot of the probability of an employee leaving the organization after a certain period. The analysis relies on historical data and extrapolates probability based on previous events.

Definition: The probability of leaving represents the expected likelihood that an employee will depart from the company during a specific year of their tenure.

Insight: When analyzed across all employees, this data provides insight into general turnover rates in relation to tenure. Examining this information through different filters can identify groups at a more immediate high risk of leaving the company. Further analysis of specific groups can yield insights into the turnover probability of employees within these groups, relative to their tenure.

11. Turnover Drivers

Preventing key employee turnover is vital. Identifying turnover drivers is essential to reduce departures. Orgnostic provides actionable insights that go beyond simple turnover metrics. It helps pinpoint areas of high turnover and identify the underlying causes, enabling effective responses from HR and management.

Definition: The Turnover Insight, an analysis tool by Orgnostic, examines turnover factors across an organization. It uses data from various sources to identify turnover risks and predict potential employee departures. Key factors include age, tenure, recent salary, time since last increase, salary increase trends, bonuses, managerial changes, years in role, and unplanned absences.

Insight: Turnover models assist in identifying employees at high risk of leaving and determining what factors influence their decision to do so. Estimating the cost of turnover aids in creating budgets for retention strategies, which can save money and help shape the future of the workplace.

Get the Employee Turnover Metrics Cheat Sheet

For a broader perspective on these metrics, download our Employee Turnover Metrics Cheat Sheet. Think of it like a guide, helping you navigate through the ups and downs of workforce changes. It’s a handy tool to understand, monitor, and predict employee turnover. Perfect for HR professionals and business leaders alike.

There are many questions you might ask yourself when attempting to navigate the complex topic of employee turnover. What are the primary drivers behind employee turnover in our organization? Which departments or teams are experiencing the highest turnover rates? Can we identify patterns or trends in turnover timing and seasons? … These and many more questions can be answered through the lens of people analytics.

A nuanced strategy is imperative. Understanding proportions is only one aspect of numerical analysis. Digging deeper into the underlying factors and establishing connections can enable a proactive approach, helping to prevent future losses effectively. This is where our services come into play. Explore our Employee Turnover Model use case and see how we can help you determine factors that drive retention and turnover across your organization.

to schedule a Demo