Turnover & Retention

What is an exit interview?

An exit interview is a face-to-face discussion conducted by an organization to learn why an employee is quitting.

What is the difference between dysfunctional and functional turnover?

Dysfunctional turnover is harmful to the organization, such as the exit of high performers or employees who have difficult-to-replace skill sets. Functional turnover may not be harmful, such as the exit of employees who are easy to replace, and may even be beneficial, such as the exit of poor performers.

What is employee turnover?

Employee turnover reflects the number of employees who leave an organization during a specified time period, typically one year. While an organization usually measures the total number of employees who leave, turnover can also apply to subcategories within an organization like individual departments or demographic groups.

What is fit?

Fit represents the extent to which an employee sees themself as compatible with their job, organization, and community. It is thus important to hire employees with the proper knowledge and skill set, motivation, and personality characteristics for a particular job and organization. You should also ensure that interests and values align with the broader community to maximize fit.

What are the strongest predictors of turnover?

In addition to job satisfaction and organizational commitment, relatively strong predictors of turnover tend to be: supervisor relationships, coworker relationships, role clarity and role conflict, and promotion opportunities (Allen et al., 2010).

How important is pay in preventing turnover?

It is true that compensation matters for retention, and employees often leave organizations to take higher paying jobs elsewhere. However, when we consider what leads employees to seek out these other opportunities to begin with, pay level and pay satisfaction are relatively weak predictors.

What is job embeddedness theory?

Job embeddedness theory identifies three critical elements that root individuals in organizations. These include: fit, links, and sacrifice. By understanding these key factors in job embeddedness, we can assess to what extent employees are risk of leaving an organization and how best to promote retention.

What are links?

Links are connections with other people or groups. You can develop links through a variety of means, such as encouraging positive interactions between management and employees, providing opportunities to develop cohesion in various groups, and even implementing changes to an organization's physical work environment that allow for increased connections.

What is sacrifice?

Sacrifice represents what would be given up by leaving a job, and it could include financial rewards based on tenure, a positive work environment, retirement income, and promotional opportunities.

What is the unfolding model of turnover?

The unfolding model of turnover identifies four primary paths to turnover—leaving an unsatisfying job, leaving for something better, following a plan, and impulsive quits. Leaving an unsatisfying job One path involves leaving an unsatisfying job. Retention strategies in this case would focus on common retention management activities such as assessing workplace conditions and attitudes and managing common causes of dissatisfaction and turnover. Leaving for something better A second path involves leaving for a more attractive alternative. Because this path may not involve dissatisfaction, it tends to be driven by external market forces. Retention strategies in this case focus on ensuring the workplace is externally competitive in terms of rewards, opportunities, and the work environment, and having a strategy for responding to external opportunities for valued employees. Following a plan A third path involves following a predetermined plan or script. For example, an employee may have a predetermined plan to leave after completing a degree, after a certain length of service, or after once one starts a family. Impulsive quits A fourth path involves leaving after a shock—after an unexpected event. These impulsive quits are typically in response to negative shocks such as being passed over for a promotion or after a major disagreement. Retention strategies in this case focus on investigating the types and frequencies of shocks that are driving employees to leave, making appropriate remedies, and providing necessary support.

How do you calculate employee turnover?

To calculate employee turnover, you divide the sum total of the number of employees that leave within a specific period of time by the average number of employees that work within the selected time frame. Multiply that number by 100 to calculate the employee turnover rate.

What is turnover contagion?

Turnover contagion is the domino effect of one resignation. When key employees resign or are fired, a chain reaction can be set off. Turnover contagion is when employees leave a company en masse, often in a short period of time. Turnover contagion happens when the primary trigger of people leaving their jobs is other people, usually peers, leaving.

What is the difference between voluntary and involuntary turnover?

Voluntary turnover is when an employee chooses to leave an organization by resigning or retiring. Involuntary turnover is when an organization asks an employee to leave.

What are the costs associated with turnover?

When employees leave, it costs the organization time and money. The total costs associated with turnover can range from 90% to 200% of annual salary (Cascio, 2006; Mitchell, Holtom, & Lee, 2001). In addition to the obvious direct costs, such as accrued paid time off and staffing costs associated with hiring a replacement, there are a wide range of other direct and indirect costs. PriceWaterhouse Coopers (2006) estimated that turnover-related costs represent more than 12% of pretax income for the average company, and nearly 40% for companies at the 75th percentile for turnover rate.