View source for Employee turnover

{{Short description|Act of replacing an employee with a new one}}
{{Globalize|date=March 2015}}

In [[human resources]], '''turnover''' refers to employees who leave an organization. The ''turnover rate'' is the percentage of the total [[workforce]] who leave over a certain period.<ref>{{Cite web |title=CIPD {{!}} Employee turnover and retention {{!}} Factsheets |url=https://www.cipd.org/uk/knowledge/factsheets/turnover-retention-factsheet/ |archive-url=https://web.archive.org/web/20240423093602/https://www.cipd.org/uk/knowledge/factsheets/turnover-retention-factsheet/ |archive-date=23 April 2024 |access-date=2024-04-23 |website=CIPD |language=en}}</ref> Organizations and wider industries may measure their turnover rate during a fiscal or calendar year.<ref name="ok.gov" /> 

Reasons for leaving include [[termination of employment|termination]] (i.e. involuntary turnover), [[retirement]], [[death]], transfers to other sections of the organization, and [[resignation]]s.<ref name="ok.gov">Trip, R. (n.d.). Turnover-State of Oklahoma Website. Retrieved from www.ok.gov: http://www.ok.gov/opm/documents/Employee%20Turnover%20Presentation.ppt</ref> Factors external to the organization, such as employees seeking to meet financial needs, work-family balances, economic crises, etc. may also contribute.<ref>{{Cite journal |last1=Wynen |first1=Jan |last2=Op de Beeck |first2=Sophie |date=2014-07-02 |title=The Impact of the Financial and Economic Crisis on Turnover Intention in the U.S. Federal Government |url=http://dx.doi.org/10.1177/0091026014537043 |journal=Public Personnel Management |volume=43 |issue=4 |pages=565–585 |doi=10.1177/0091026014537043 |issn=0091-0260 |s2cid=155008012}}</ref>

[[Turnover (employment)#Causes of high or low turnover|Turnover rates may vary]] due to time and industry. If an [[employer]] has a high turnover rate relative to its [[competitor]]s, this means that employees of that company have a shorter average tenure than those of other companies in the same [[Industry (economics)|industry]].{{Necessary?|date=April 2024}}

High turnover may be particularly harmful to a company's productivity if it cannot easily retain or replace skilled workers. Companies may track turnover internally across departments, divisions, or [[demographic groups]] such as turnover of women versus men.{{Why|date=April 2024|reason=This may be improved by clarifying and citing why a company would choose to track differing turnovers between groups. E.g., "a company may seek to identify if it has prejudicial practices by contrasting the turnover rates of men and women."}} Companies may seek to better understand voluntary turnover by surveying leavers on their motivations. Many organizations have discovered that turnover is reduced significantly when issues affecting employees are addressed immediately and professionally.{{Citation needed|date=April 2024}} Companies may try to reduce employee turnover rates by offering benefits such as [[paid sick days]], [[paid holidays]] and [[flextime|flexible schedule]]s.<ref>Beam, J. (2014, December 25). What is Employee Turnover? Retrieved from WiseGeek: http://www.wisegeek.org/what-is-employee-turnover.htm</ref> 

== Terminologies ==
Employee attrition, employee turnover, and employee churn all refer to an employee quitting the job, and are often used as synonyms. For the first two terms, the difference is due to the context, i.e., the reasons for the employee leaving. While attrition is usually voluntary or natural, like retirement or resignation, turnover refers to both voluntary and involuntary departures. While turnover includes employees who leave of their own volition, it also refers to employees who are involuntarily terminated or laid off. In the case of turnover, HR's role is to replace employees, while positions vacated through attrition may remain unfilled. Employee churn refers to the total number of attrition and turnover cases combined.

==Types of turnover==
There are five categories into which turnover can be classified.<ref>Aregay, A. G. M. (2021). An Assessment of the Causes and Effects of Employees’ Turnover: the Case of Defense Construction Enterprise [Master dissertation, St. Mary’s University]. St. Mary’s University Institutional Repository. http://hdl.handle.net/123456789/5931</ref>

* '''Voluntary vs Involuntary turnover:''' '''voluntary''' '''turnover''' occurs when an employee voluntarily chooses to resign from the organization. Voluntary turnover could be the result of a more appealing job offer, staff conflict, or lack of advancement opportunities.<ref name="ok.gov" /> '''Involuntary turnover''' occurs when the employer makes the decision to discharge an employee and the employee unwillingly leaves their position.<ref name="ok.gov" /> Involuntary turnover could be a result of poor performance, staff conflict, an [[at-will employment]] clause, etc.
* '''Functional vs Dysfunctional turnover:''' '''functional turnover''' occurs when a low-performing employee leaves the organization.<ref name="ok.gov" /> Functional turnover reduces the amount of paperwork that a company must file in order to rid itself of a low-performing employee.  Rather than having to go through the potentially difficult process of proving that an employee is inadequate, the company simply respects their own decision to leave. '''Dysfunctional turnover''' occurs when a high-performing employee leaves the organization.<ref name="ok.gov" /> Dysfunctional turnover can be potentially costly to an organization, and could be the result of a more appealing job offer or lack of opportunities in career advancement. Too much turnover is not only costly, but it can also give an organization a bad reputation. However, there is also good turnover, which occurs when an organization finds a better fit with a new employee in a certain position. Good turnover can also transpire when an employee has outgrown opportunities within a certain organization and must move forward with their career in a new organization.<ref>Academy, A. B. (Director). (2013). Episode 128: The Different Types of Employee Turnover [Motion Picture].</ref>
* '''Avoidable vs Unavoidable turnover: avoidable turnover''' occurs in avoidable circumstances that the organization can change to make employees change their minds and not quit, such as lower pay and rewards or poor working conditions.<ref name=":0">Akinyomi, O. J. (2016). Labour Turnover: Causes, Consequences and Prevention. ''Fountain University'' ''Journal of Management and Social Sciences'' ''(Special Edition), 5''(1), 105-112.</ref><ref name=":1">Mezmur B. A. (2016). Assessment of the Causes for Employees’ Turnover in Anbessa City Bus Service Enterprise. [Master dissertation, St. Mary’s University]. St. Mary’s University Institutional Repository. http://hdl.handle.net/123456789/3743</ref> '''Unavoidable turnover''' occurs under unavoidable circumstances, such as a family move, serious illness, or death.<ref name=":0" /><ref name=":1" /> 
* '''Internal vs External turnover:''' '''internal turnover''' occurs when employees leave their current position and obtain a new job within the same company. It is related to internal recruitment, in which companies fill vacancies through their employees. '''External turnover''', on the other hand, refers to cases in which the worker and employer separates, whether voluntary or involuntary.<ref>Tuji, A. (2013). An Assessment of the Causes of Employee Turnover in Oromia Public Service Organizations. [MBA dissertation, Addis Ababa University].</ref>
* '''Skilled vs Unskilled turnover: uneducated and unskilled employees''' often have a high turnover rate, and they can generally be replaced without the organization or company suffering a loss of performance. The fact that these workers can be easily replaced provides little incentive for employers to offer generous labor contracts; conversely, contracts can greatly benefit the employer and lead to increased turnover as workers seek and eventually find more favorable employment. On the other hand, '''skilled and educated positions''' can pose a risk to the company if they leave, thereby leading to replacement costs as well as competitive disadvantages for the company.<ref name=":0"/>

== Evolution ==
[[File:Job seekers ratio.webp|thumb|300px|Job seekers ratio
{{legend|#0714FF|Cold job market}}
{{legend|#2A9B00|Balanced job market}}
{{legend|#BA3117|Hot job market}}
]]
As the turnover data in the United States show, the turnover rate has been rising for the past 9 years. The only period that is an exception, as expected, is when the first wave occurred due to the Covid-19 pandemic, in which people had no opportunity to change their work. After this period, the phenomenon undergoes a major acceleration in growth (Great Resignation).<ref>{{Cite journal |last=Serenko |first=Alexander |date=2023 |title=The Great Resignation: the great knowledge exodus or the onset of the Great Knowledge Revolution? |url=https://www.emerald.com/insight/content/doi/10.1108/JKM-12-2021-0920/full/html |journal=Journal of Knowledge Management |volume=27 |issue=4 |pages=1042–1055 |language=en |doi=10.1108/JKM-12-2021-0920 |s2cid=249652534 |issn=1367-3270}}</ref> Possible causes include desire to work for companies with better work policies (i. e. work-life balance, autonomy, smart working), the desire to have a more satisfying job and career advancement opportunities, and safety concerns related to the COVID -19 pandemic.<ref>{{Cite web |last=Queryo.com |title=The Great Resignation: What is it and what are the causes - MBE |url=https://blog.mbe.it/en/l460-great-resignation |access-date=2022-09-21 |website=MBE Blog |language=en}}</ref><graph>{
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}</graph>''Attrition trends over the past 9 years. On the x-axis are shown the years, and on the y-axis the annual quits (%). Source: U.S. Bureau of Labor Statistics'' <ref>{{Cite web |title=Table 18. Annual quits rates by industry and region, not seasonally adjusted - 2022 M01 Results |url=https://www.bls.gov/news.release/jolts.t18.htm#jolts_table18.f.1 |access-date=2022-09-21 |website=www.bls.gov |language=en-us}}</ref>

Following the [[COVID-19 pandemic]] and the [[Great Resignation]], it has become commonplace for professional employees to voluntarily quit within a year of employment, known as "quick quitting."<ref>{{cite news |last1=Stajduhar |first1=Tony |last2=Search |first2=Jackson Physician |title=Quick Quitting Is Especially Common Among Younger Workers: Why Are They Lea |url=https://www.newsweek.com/quick-quitting-especially-common-among-younger-workers-why-are-they-leaving-what-can-we-do-1868697 |access-date=6 July 2024 |work=Newsweek |date=12 February 2024 |language=en}}</ref><ref>{{cite news |last1=Hoff |first1=Madison |title=Waves of workers are 'quick quitting' as the clock runs down on the Great Resignation |url=https://www.businessinsider.com/what-is-quick-quitting-reasons-why-it-may-happen-2022-11 |access-date=6 July 2024 |work=Business Insider |date=Nov 20, 2022}}</ref><ref>{{cite news |last1=Castrillon |first1=Caroline |title=Why Quick Quitting Is Gaining Momentum In The Workplace |url=https://www.forbes.com/sites/carolinecastrillon/2022/10/09/why-quick-quitting-is-gaining-momentum-in-the-workplace/ |access-date=6 July 2024 |work=Forbes |date=Oct 9, 2022 |language=en}}</ref><ref>{{cite news |last1=Anders |first1=George |last2=Moore |first2=McKenna |title=LinkedIn News on LinkedIn: 'Quick quitting' is on the rise, and it's not just entry-level employees… {{!}} 365 comments |url=https://www.linkedin.com/posts/linkedin-news_quick-quitting-is-on-the-rise-and-its-activity-6986068366155206656-Ati_ |access-date=6 July 2024 |work=LinkedIn News |publisher=LinkedIn |date=2023 |language=en}}</ref><ref>{{cite news |last1=Tilo |first1=Dexter |title='Quick quitting': Why are your employees leaving so soon? |url=https://www.hcamag.com/us/specialization/employee-engagement/quick-quitting-why-are-your-employees-leaving-so-soon/441148 |access-date=6 July 2024 |work=www.hcamag.com |date=March 29, 2023 |language=en}}</ref>

== Costs ==
When accounting for the costs (both real costs, such as time taken to select and recruit a replacement, and also [[opportunity cost]]s, such as lost productivity), some estimates on the cost of employee turnover in for-profit organizations range from  30% to 200% of the employees' salary.<ref name="SchlesingerHeskett1991">{{cite journal |first=Leonard A. |last=Schlesinger |author2=James L. Heskett  |date=1991-04-15 |title=Breaking the Cycle of Failure in Services |url=http://sloanreview.mit.edu/the-magazine/articles/1991/spring/3232/breaking-the-cycle-of-failure-in-services/ |journal=[[MIT Sloan Management Review]] |volume=33 |issue=3 |pages=17–28 |access-date=2009-01-21}}</ref><ref>{{Cite web |title=Understanding and calculating the cost of employee turnover |url=https://www.cultureamp.com/blog/cost-of-employee-turnover |archive-url=https://web.archive.org/web/20230913171706/https://www.cultureamp.com/blog/cost-of-employee-turnover |archive-date=2023-09-13 |access-date=2023-09-13 |website=Culture Amp |language=en-us}}</ref><ref>{{Cite web |last=Sears |first=Lindsay |date=2017 |title=2017 RETENTION REPORT |url=https://cdn2.hubspot.net/hubfs/478187/2017%20Retention%20Report%20Campaign/Work%20Institute%202017%20-Retention%20Report.pdf?__hstc=163589856.e8b28694f709b5fa1db1aee5022f38ba.1694520838140.1694520838140.1694520838140.1&__hssc=163589856.1.1694520838141&__hsfp=1938065535&hsCtaTracking=05469671-5605-483d-a6d1-774bb9f011c9%7C05585d67-df2d-4aa2-a7f7-1534bbf92f6d |access-date=13 Sep 2023}}</ref><ref>{{Cite web |date=February 2014 |title=The Cost of Brain Drain |url=https://www.oxfordeconomics.com/wp-content/uploads/2023/05/cost-brain-drain-report.pdf |url-status=live |archive-url=https://web.archive.org/web/20230913171938/https://www.oxfordeconomics.com/wp-content/uploads/2023/05/cost-brain-drain-report.pdf |archive-date=13 Sep 2023 |access-date=13 Sep 2023 |website=oxfordeconomics.com}}</ref> There are both direct and indirect costs. Direct costs relate to the leaving costs, replacement costs, and transitions costs. Indirect costs relate to the loss of production, reduced performance levels, defective products,<ref name=":15">{{Cite journal |last=Moon |first=Ken |orig-date=28 April 2020|date=4 Aug 2021 |title=The Hidden Cost of Worker Turnover: Attributing Product Reliability to the Turnover of Factory Workers |url=https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3568792 |journal=SSRN |ssrn=3568792 |archive-url=https://web.archive.org/web/20230913172245/https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3568792 |archive-date=2023-09-13 }}</ref><ref>{{Cite journal |last=Moon |first=Ken |orig-date=25 Sep 2018|date=22 Feb 2023 |title=Manufacturing Productivity with Worker Turnover |url=https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3248075 |journal=SSRN |ssrn=3248075 |archive-url=https://web.archive.org/web/20230913172409/https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3248075 |archive-date=2023-09-13 }}</ref> unnecessary overtime, and low morale. In healthcare, staff turnover has been associated with worse patient outcomes.<ref>[http://eprints.ucl.ac.uk/18978/ Williams ACdeC, Potts HWW (2010). Group membership and staff turnover affect outcomes in group CBT for persistent pain. ''Pain'', '''148'''(3), 481-6]</ref><ref>{{Cite journal |last=Song |first=Hummy |date=9 September 2016 |title=Cohort Turnover and Operational Performance: The July Phenomenon in Teaching Hospitals |url=https://www.hbs.edu/ris/Publication%20Files/16-039_a0651b04-18be-4a91-9bf9-a1d4cb12c540.pdf |journal=Harvard Business School |archive-url=https://web.archive.org/web/20230913172458/https://www.hbs.edu/ris/Publication%20Files/16-039_a0651b04-18be-4a91-9bf9-a1d4cb12c540.pdf |archive-date=2023-09-13 }}</ref><ref>{{Cite journal |last1=Batt |first1=Robert J. |last2=KC |first2=Diwas S. |last3=Staats |first3=Bradley R. |last4=Patterson |first4=Brian W. |date=June 2019 |title=The Effects of Discrete Work Shifts on a Nonterminating Service System |url=https://web.archive.org/web/20230913172549/https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7539758/ |journal=Production and Operations Management |volume=28 |issue=6 |pages=1528–1544 |doi=10.1111/poms.12999 |issn=1059-1478 |pmc=7539758 |pmid=33033425}}</ref> The true cost of turnover may depend on a range of variables including ease or difficulty in filling the position and the nature of the job itself. Estimating the costs of turnover within an organization can be a worthwhile exercise, especially since such costs are unlikely to appear in an organization’s balance sheets: some of the direct costs can be readily calculated, while the indirect costs can often be more difficult to determine and may require “educated guesses” (though not necessarily, e.g., one study traced defective electronics to the staffing levels at the time and location of their production<ref name=":15" />). Nevertheless, calculating even a rough idea of the total expenses relating to turnover can spur action planning within an organization to improve the work environment and reduce turnover. Surveying employees at the time they leave an organization can also be an effective approach to understanding the drivers of turnover within a particular organization.<ref>The True Costs of Turnover http://www.insightlink.com/blog/calculating-the-cost-of-employee-turnover.cfm</ref>

== Internal versus external ==
Like [[recruitment]], turnover can be classified as "internal" or "external".<ref name="Ruby2002">{{cite journal |journal=Journal of Education for Students Placed at Risk |date=January 2002 |first=Allen M. |last=Ruby |title=Internal Teacher Turnover in Urban Middle School Reform |volume=7 |issue=4 |pages=379–406 |doi=10.1207/S15327671ESPR0704_2|s2cid=145075505 }}</ref> Internal turnover involves employees leaving their current positions and taking new positions within the same organization. Both positive (such as increased morale from the change of task and supervisor) and negative (such as project/relational disruption, or the [[Peter Principle]]) effects of internal turnover exist, and therefore, it may be equally important to monitor this form of turnover as it is to monitor its external counterpart. 
Internal turnover might be moderated and controlled by typical HR mechanisms, such as an internal recruitment policy or formal [[succession planning]].

Internal turnover, called internal transfers, is generally considered an opportunity to help employees in their career growth while minimizing the more costly external turnover. A large amount of internal transfers leaving a particular department or division may signal problems in that area unless the position is a designated stepping stone position.

== Skilled vs. unskilled employees ==
Unskilled positions often have high turnover, and employees can generally be replaced without the organization or [[business]] incurring any loss of performance. {{citation needed|reason=This is an important assertion that needs to be backed up with a source.|date=September 2015}} The ease of replacing these employees provides little incentive to employers to offer generous employment contracts; conversely, contracts may strongly favour the employer and lead to increased turnover as employees seek, and eventually find, more favorable employment.

== Voluntary versus involuntary ==
Practitioners can differentiate between instances of voluntary turnover, initiated at the choice of the employee, and involuntary turnover initiated by the employer due to poor performance or reduction in force (RIF).

The [[Bureau of Labor Statistics|US Bureau of Labor Statistics]] uses the term "Quits" to mean voluntary turnover and "Total Separations" for the combination of voluntary and involuntary turnover.
[[File:Jobs and quits rate.webp|thumb|800px|center|{{legend-line|#AA4643 solid 3px|[[Unemployment in the United States|Total unemployed people]]}}
{{legend-line|#89A54E solid 3px|Total job openings}}
{{legend-line|#4572A7 solid 3px|Total quits}}]]

== Causes of high or low turnover ==
Turnover can vary significantly based on time and industry. For example, the US 2001 - 2006 annual turnover rate for all industry sectors averaged 39.6% prior to seasonal adjustments,<ref>U.S. Department of Labor, Bureau of Labor Statistics, total non-farming separations (not seasonally adjusted), Series ID JTU00000000TSR, http://data.bls.gov/cgi-bin/surveymost?jt "'' Openings and Labor Turnover Survey''"</ref> while the leisure and hospitality sector experienced an average annual rate of 74.6% during this same period.<ref>U.S. Department of Labor, Bureau of Labor Statistics, total separations Leisure and Hospitality (not seasonally adjusted), Series ID JTU70000000TSR, http://data.bls.gov/cgi-bin/surveymost?jt "''Job Openings and Labor Turnover Survey''"</ref> The average total of non-farm seasonally adjusted monthly turnover was 3.3% for the period from December 2000 to November 2008.<ref name="jolt2008">{{cite web |year=2008 |title=Job Openings and Labor Turnover Survey |url=http://data.bls.gov/PDQ/servlet/SurveyOutputServlet?data_tool=latest_numbers&series_id=JTS00000000TSR |access-date=2009-01-21 |publisher=[[Bureau of Labor Statistics]]}}</ref>{{Non sequitur|date=April 2024|reason=This last point to contrast uses seasonally adjusted adjusted data when the prior points use *non*-seasonally adjusted: so it may be an inappropriate comparison. 

Note this paragraph was originally in the intro but moved here (on 23 April 2024) to avoid excessive detail.}}

High turnover often means that employees are dissatisfied with their jobs, especially when it is relatively easy to find a new one.<ref>{{cite journal | last1 = Carsten | first1 = J. M. | last2 = Spector | first2 = P. E. | year = 1987 | title = Unemployment, job satisfaction, and employee turnover: A meta-analytic test of the Muchinsky model | journal = Journal of Applied Psychology | volume = 72 | issue = 3| pages = 374–381 | doi = 10.1037/0021-9010.72.3.374 }}</ref> It can also indicate [[occupational safety and health|unsafe or unhealthy]] conditions, or that too few employees give satisfactory performance (due to unrealistic expectations, inappropriate processes or tools, or poor candidate screening). The lack of career opportunities and challenges,<ref>{{Cite web |url=https://www.apa.org/pubs/reports/work-in-america/2024 |access-date=2025-02-02 |website=www.apa.org}}</ref> dissatisfaction with the job-scope, ability to balance work and personal life, and conflict with the management have been cited as predictors of high turnover.

Each company has its own unique turnover drivers so companies must continually work to identify the issues that cause turnover in their company. Further the causes of attrition vary within a company such that causes for turnover in one department might be very different from the causes of turnover in another department. Companies can use [[exit interview]]s to find out why employees are leaving and the problems they encountered in the workplace.

Low turnover indicates that none of the above is true: employees are satisfied, healthy and safe, and their performance is satisfactory to the employer. However, the predictors of low turnover may sometimes differ than those of high turnover. Aside from the fore-mentioned career opportunities, salary, corporate culture, management's recognition, and a comfortable workplace seem to impact employees' decision to stay with their employer.

Many psychological and management theories exist regarding the types of job content which is intrinsically satisfying to employees and which, in turn, should minimise external voluntary turnover. Examples include [[Frederick Herzberg|Herzberg]]'s [[two factor theory]], [[David McClelland|McClelland]]'s [[Need theory|theory of needs]], and Hackman and Oldham's [[Job characteristic theory|job characteristics model]].<ref name="HackmanOldham1976">{{cite journal |first=J. Richard |last=Hackman |author2=Greg R. Oldham  |date=August 1976 |title=Motivation through the design of work: test of a theory | journal=Organizational Behavior and Human Performance |volume=16 |issue=2 |pages=250–279 |doi=10.1016/0030-5073(76)90016-7|s2cid=8618462 }}</ref>

=== Stress ===
{{Main|Occupational stress}}
Evidence suggests that distress is the major cause of turnover in organizations.<ref name=NIOSH_Stressatwork>NIOSH (1999). [https://www.cdc.gov/niosh/docs/99-101/ Stress at Work.] U.S. National Institute for Occupational Safety and Health, DHHS (NIOSH) Publication Number 99-101.</ref>

=== Bullying ===
{{Main|Workplace bullying}}
A number of studies report a positive relationship between bullying, intention to leave and high turnover. In some cases, the number people who actually leave is a “tip of the iceberg”. Many more who remain have considered leaving. In O’Connell et al.’s (2007) Irish study, 60% of respondents considered leaving whilst 15% actually left the organisation.<ref name=Effects>Helge H, Sheehan MJ, Cooper CL, Einarsen S "Organisational Effects of Workplace Bullying" in Bullying and Harassment in the Workplace: Developments in Theory, Research, and Practice (2010)</ref> In a study of public-sector union members, approximately one in five workers reported having considered leaving the workplace as a result of witnessing bullying taking place. Rayner explained these figures by pointing to the presence of a [[climate of fear]] in which employees considered reporting to be unsafe, where bullies had “got away with it” previously despite management knowing of the presence of bullying.<ref name=Effects/>

One can rather easily spot an office with a bullying problem - there is an exceptionally high rate of turnover. While not all places with high personnel turnover are sites of workplace bullying, nearly every place that has a bully in charge will have elevated staff turnover and [[absenteeism]].<ref>Robert Killoren (2014) The Toll of Workplace Bullying - Research Management Review, Volume 20, Number 1</ref>

=== Narcissism and psychopathy ===
{{Main|Narcissism in the workplace|Psychopathy in the workplace}}
According to Thomas, there tends to be a higher level of [[Occupational stress|stress]] with people who work or interact with a [[narcissist]], which in turn increases absenteeism and staff turnover.<ref>Thomas D Narcissism: Behind the Mask (2010)</ref> Boddy finds the same dynamic where there is a corporate [[psychopath]] in the organisation.<ref name=Boddy>Boddy, C. R. Corporate Psychopaths: Organizational Destroyers (2011)</ref>

=== Investments ===
Low turnover may indicate the presence of employee "investments" (also known "side bets")<ref name="TettMeyer1993">{{cite journal |first=Robert P |last=Tett |author2=John P. Meyer  |year=1993 |title=Job Satisfaction, Organizational Commitment, Turnover Intention, and Turnover: Path Analyses Based on Meta-Analytic Findings |journal=Personnel Psychology |volume=46 |issue=2 |pages=259–293 |doi=10.1111/j.1744-6570.1993.tb00874.x |url=http://www3.interscience.wiley.com/journal/119295540/abstract |archive-url=https://archive.today/20130105111033/http://www3.interscience.wiley.com/journal/119295540/abstract |url-status=dead |archive-date=2013-01-05 |access-date=2009-01-21}}</ref> in their position: certain  may be enjoyed while the employee remains employed with the organization, which would be lost upon resignation (e.g.,&nbsp;health insurance, discounted home loans, redundancy packages). Such employees would be expected to demonstrate lower intent to leave than if such "side bets" were not present.

=== Perceptions of injustice and unfairness ===
{{Main|Organizational justice}}
Research suggests that organizational justice plays a significant role in an employee’s intention to exit an organization. Perceptions of fairness are antecedents and determinants of turnover intention, especially in how employees are treated, outcomes are distributed fairly, and processes and procedures are consistently followed.<ref>{{cite journal |first=James B |last=DeConinck |author2=C. Dean Stilwell|year=2004 |title=Incorporating Organizational Justice, Role States, Pay Satisfaction and Supervisor Satisfaction in a Model of Turnover Intentions |journal=Journal of Business Research|volume=57 |issue=3 |pages=225–231 |doi= 10.1016/S0148-2963(02)00289-8}}</ref>

== Consequences ==

=== Negative consequences ===

* '''Direct costs of turnover:''' replacement and recruiting costs (advertising, interviewing, testing…), training time and costs <ref name=":7">{{Cite journal |last=Bacha |first=Semu |date=2016-11-12 |title=Antecedents and Consequences of Employee Attrition: A Review of Literature |url=https://papers.ssrn.com/abstract=2868451 |language=en |location=Rochester, NY |doi=10.2139/ssrn.2868451|ssrn=2868451 |s2cid=168450952 }}</ref><ref name=":6"/><ref name=":2">Prabakaran, P., & Vetrivel, D. T. (2017). Conceptual Paper on Workforce Attrition: Causes, Consequences and Prevention. ''Star International Journal, 5''(2). ISSN: 2321-676X</ref><ref name=":8">{{Cite book |last=Zylka |first=Matthäus P. |title=Proceedings of the 2016 ACM SIGMIS Conference on Computers and People Research |chapter=Putting the Consequences of IT Turnover on the Map |date=2016-06-02 |chapter-url=https://doi.org/10.1145/2890602.2890618 |series=SIGMIS-CPR '16 |location=New York, NY, USA |publisher=Association for Computing Machinery |pages=87–95 |doi=10.1145/2890602.2890618 |isbn=978-1-4503-4203-2|s2cid=10579921 }}</ref><ref name=":9">{{Cite journal |last1=Zylka |first1=Matthäus P. |last2=Fischbach |first2=Kai |date=2017-04-24 |title=Turning the Spotlight on the Consequences of Individual IT Turnover: A Literature Review and Research Agenda |url=https://doi.org/10.1145/3084179.3084185 |journal=ACM SIGMIS Database: The DATABASE for Advances in Information Systems |volume=48 |issue=2 |pages=52–78 |doi=10.1145/3084179.3084185 |s2cid=42298087 |issn=0095-0033}}</ref><ref name=":3">Varadharaj, A. & Irfan, EC. (2019). A Study Report on Causes and Effects of Employee Turnover in Construction Industry. International Research Journal of Engineering and Technology (IRJET), 6(5), 2371-2382. e-ISSN: 2395-0056</ref><ref name=":4">Getachew, Y. (2017). The Causes and Impact of Employee Turnover on Project Performance. The Case of Ethiopia Sugar Corporation Projects. [Master dissertation, St. Mary’s University]. St. Mary’s University Institutional Repository. http://hdl.handle.net/123456789/3224</ref><ref name=":10">Workagegn, S. (2017). An Assessment of The Causes of Employee Turnover. A Case of Tikur Abay Shoe S.C. [Master dissertation, St. Mary’s University]. St. Mary’s University Institutional Repository. http://hdl.handle.net/123456789/3502</ref><ref name=":5">Balcha, S. M. (2019). Causes and Consequences of Employee Turnover in International Medical Corps Ethiopia Mission. [Master dissertation, St. Mary’s University]. St. Mary’s University Institutional Repository.</ref><ref name=":11">Staw, B. M. (1980). The Consequences of Turnover. Journal of Occupational Behaviour, 1(4), 253–273.</ref><ref name=":13"/><ref name="hdl.handle.net">Imani, Z. (2013). Assessment of the Causes of Labour Turnover in Organizations in Tanzania: a Case of National Bank of Commerce (NBC). [Master dissertation, Mzumbe University]. Unimib Digital Repository. http://hdl.handle.net/11192/1950</ref>), leaving costs – payroll and HR administration,<ref name=":5" /> selection and placement costs, orientation costs, lost wages/salaries, administrative costs, loss of human capital, and customer satisfaction problems,<ref name=":7"/> time of the newer employee to be easy with the new system, with the co-employee, to be familiar with the new environment etc, vacancy problems,<ref name=":6">AlSayyed, B., & Braiki, F.A. (2015, March 3–5). Employee turnover, causes, the relationship between turnover and productivity and recommendations to reduce it. ''Proceedings of the 2015 International Conference on Industrial Engineering and Operations Management Dubai, United Arab Emirates (UAE)''.</ref> loss of productivity and performance <ref name=":7"/><ref name=":6" /><ref name=":2" /><ref name=":3" /><ref name=":4" />), cost of inefficiency of the new staff.<ref name=":2" />
* '''Indirect costs of turnover:''' operational disruption, demoralization of employees (who remain),<ref name=":7" /><ref name=":8" /><ref name=":9" /><ref name=":3" /><ref name=":11" /><ref name=":12">Hussein, A. H. Al-A. (1989). Labour turnover in the West Bank: an analysis of causes of turnover in the industrial sector. [Doctoral dissertation, University of Glasgow]. Glasgow Theses Service. http://theses.gla.ac.uk/id/eprint/2850</ref><ref>Ayuure, A. A. (2013). Causes and Effects of Employee Turnover in the Commission on Human Rights and Administrative Justice in the Upper East Region of Ghana. [Master dissertation, University of Cape Coast]. University of Cape Coast Institutional Repository.</ref><ref name=":13">Abeble, G. (2016). Causes and Consequences of Employee Turnover. The Case of Kolfie Keranio Sub-City. [Master dissertation, St. Mary’s University]. St. Mary’s University Institutional Repository. http://hdl.handle.net/123456789/3780</ref><ref name="hdl.handle.net"/> increased work-load,<ref name=":13" />  negative image on the organization, employee development plans fail,<ref name=":7"/> unfulfilled daily functions,<ref name=":3" /> hidden costs (instead of an organization expending substantial amount of money and time trying to find replacements for disengaged employees, it could have dedicated such resources and energy in productive activities that will contribute towards moving the organization in achieving its objectives),<ref name=":2" /> relationships with co-workers negatively affected;<ref name=":8" /><ref name=":9" /> interpretation of the departures of a former colleague as a rejection of the job (begin to realize the possibility that better job opportunities exist),<ref name=":8" /><ref name=":9" /> loss of confidence (in the project),<ref name=":4" /> unexpected leaves and remaining co-workers have to compensate by,<ref name=":9" /> customer service;<ref name=":3" /><ref name=":13" /> management frustration,<ref name=":3" /><ref name=":13" /> distractions,<ref name=":3" /> loss of experiences and skilled personnel/loss of knowledge,<ref name=":4" /><ref name=":12" /><ref name=":13" /> loss of output (from those leaving before they are replaced, because of delays in obtaining replacements, while new starters are on their learning curve).<ref name=":5" />

=== Positive consequences ===

* '''Enhance individual and organizational work performance:''' better job skills and more motivation/productivity of the new employee.<ref name=":8" /><ref name=":11" /><ref name=":9" />
* '''Reduction of entrenched conflict:''' resolve conflicts (when a conflicting supervisor or co-worker leaves an organization) '''<ref name=":8" /><ref name=":9" /><ref name=":11" />'''.
* '''Increasing mobility and morale''': the turnover may open positions in an otherwise impenetrable hierarchy, being a creator of promotion opportunities <ref name=":14">{{Cite journal |last=Negassa |first=Semu Bacha |date=2016 |title=Antecedents and Consequences of Employee Attrition: A Review of Literature |url=http://www.ssrn.com/abstract=2868451 |journal=SSRN Electronic Journal |language=en |doi=10.2139/ssrn.2868451 |s2cid=168450952 |issn=1556-5068}}</ref><ref name=":8" /><ref name=":9" />); “resolve deep-seated conflicts” between the conflicting parties and contributes to organizational morale,<ref name=":8" /> termination of bad matches,<ref name=":10" /> creating opportunities for advancement.<ref name=":12" />
* '''Positive attitudes:''' job satisfaction, organizational commitment.<ref name=":8" /><ref name=":9" />
* '''Social capital gain:''' the newly arrived employee increases his or her social capital and experiences socialization through the new employment.<ref name=":8" /><ref name=":9" />
* '''Setting the culture right (innovation and adaptation):''' import new type of knowledge, ideas, experience and skills <ref name=":14" /><ref name=":10" /><ref name=":11" /> introduction of change.<ref name=":12" />
* '''Cost savings:''' leave of relatively expensive employees,<ref name=":14" /><ref name=":10" /> coping mechanism for individuals under stress and invite absenteeism, carelessness, sabotage, and other non-productive behaviours.<ref name=":12" />

== Prevention ==
{{Tone|date=April 2024}}
Employees are important in any running of a business; without them the business would be unsuccessful. However, more and more employers today are finding that employees remain for approximately 23 to 24 months, according to the 2006 Bureau of Labor Statistics{{Citation needed|date=August 2010}}. The Employment Policy Foundation states that it costs a company an average of $15,000 per employee, which includes separation costs, including paperwork, unemployment; vacancy costs, including overtime or [[Temporary work|temporary employees]]; and replacement costs including advertisement, interview time, relocation, training, and decreased productivity when colleagues depart. Providing a stimulating workplace environment, which fosters happy, motivated and empowered individuals, lowers employee turnover and absentee rates.<ref name="GAM2005">Employee Pride Goes Wide. (2005, February 2). Graphic Arts Monthly, Retrieved February 23, 2009, from Academic Search Premier database.</ref> Promoting a work environment that fosters personal and professional growth promotes harmony and encouragement on all levels, so the effects are felt company wide.<ref name="GAM2005" />

Continual training and reinforcement develops a work force that is competent, consistent, competitive, effective and efficient.<ref name="GAM2005"/> Beginning on the first day of work, providing the individual with the necessary skills to perform their job is important.<ref name="Costello2006">Costello, D. (2006, December). Leveraging the Employee Life Cycle. CRM Magazine, 10(12), 48-48. Retrieved February 23, 2009, from Academic Search Premier database.</ref> Before the first day, it is important the interview and hiring process expose new hires to an explanation of the company, so individuals know whether the job is their best choice.<ref name="Testa2008">{{cite journal | last1 = Testa | first1 = B | year = 2008 | title = Early Engagement, Long Relationship?. | journal = Workforce Management | volume = 87 | issue = 15| pages = 27–31 }}</ref>  Networking and strategizing within the company provides ongoing performance management and helps build relationships among co-workers.<ref name="Testa2008"/> It is also important to motivate employees to focus on [[customer success]], profitable growth and the company well-being .<ref name="Testa2008"/> Employers can keep their employees informed and involved by including them in future plans, new purchases, policy changes, as well as introducing new employees to the employees who have gone above and beyond in meetings.<ref name="Testa2008"/> Early engagement and engagement along the way, shows employees they are valuable through information or recognition rewards, making them feel included.<ref name="Testa2008"/>

When companies hire the best people, new talent hired and veterans are enabled to reach company goals, maximizing the investment of each employee.<ref name="Testa2008"/> Taking the time to listen to employees and making them feel involved will create loyalty, in turn reducing turnover allowing for growth.<ref name="Skabelund2008">{{cite journal | last1 = Skabelund | first1 = J | year = 2008 | title = I just work here | journal = American Fitness | volume = 26 | issue = 3| pages = 42 }}</ref>

== Calculation ==
Labour turnover is equal to the number of employees leaving, divided by the average total number of employees (in order to give a percentage value). The number of employees leaving and the total number of employees are measured over one calendar year.

<math display="block">\mbox{Labour Turnover} = \frac{\mbox{NELDY}}{\mbox{(NEBY + NEEY)/2}}</math>

Where:
* NELDY = Number of Employees who Left During the Year
* NEBY = Number of Employees at the Beginning of the Year
* NEEY = Number of Employees at the End of the Year

For example, at the start of the year a business had 40 employees, but during the year 9 staff resigned with 2 new hires, thus leaving 33 staff members at the end of the year.  Hence this year's turnover is 25%. This is derived from, (9/((40+33)/2)) = 25%. However the above formula should be applied with caution if data is grouped. For example, if attrition rate is calculated for Employees with tenure 1 to 4 years, above formula may result artificially inflated attrition rate as employees with tenure more than 4 years are not counted in the denominator.

More precise calculations of turnover have also been developed. For example, instead of averaging the headcounts from the beginning of the year and the end of the year, we can calculate the denominator of Labour Turnover by averaging the headcount from each day of the year. An even better approach is to avoid the several issues inherent to traditional labour turnover rates<ref name="Stanek 314–319">{{Cite journal|last=Stanek|first=Kevin C.|date=September 2019|title=Starting with the basics: Getting turnover rates right|url=https://www.cambridge.org/core/product/identifier/S175494261900052X/type/journal_article|journal=Industrial and Organizational Psychology|language=en|volume=12|issue=3|pages=314–319|doi=10.1017/iop.2019.52|s2cid=210540811|issn=1754-9426}}</ref> by employing more advanced and accurate methods (e.g., event history analysis,<ref>{{Cite journal|last1=McCloy|first1=Rodney A.|last2=Purl|first2=Justin D.|last3=Banjanovic|first3=Erin S.|date=September 2019|title=Turnover modeling and event history analysis|url=https://www.cambridge.org/core/product/identifier/S1754942619000567/type/journal_article|journal=Industrial and Organizational Psychology|language=en|volume=12|issue=3|pages=320–325|doi=10.1017/iop.2019.56|s2cid=210485802|issn=1754-9426}}</ref> realized turnover rates<ref name="Stanek 314–319"/>).

== Models ==
Over the years there have been thousands of research articles exploring the various aspects of turnover,<ref name="Morrell, Loan-Clarke and Wilkinson, 2001">Morrell, K. Loan-Clarke J. and Wilkinson A. (2001) Unweaving leaving: The use of models in the management of employee turnover,  International Journal of Management Reviews, 3(3), 219-244.</ref> and in due course several models of employee turnover have been promulgated. The first model, and by far the one attaining most attention from researchers, was put forward in 1958 by March & Simon. After this model there have been several efforts to extend the concept. Since 1958 the following models of employee turnover have been published.
* March and Simon (1958) Process Model of Turnover
* Porter & Steers (1973) Met Expectations Model
* Price (1977) Causal Model of Turnover
* Mobley (1977) Intermediate Linkages Model
* Hom and Griffeth (1991) Alternative Linkages Model of Turnover
* Whitmore (1979) Inverse Gaussian Model for Labour Turnover
* Steers and Mowday (1981) Turnover Model
* Sheridan & Abelson (1983) Cusp Catastrophe Model of Employee Turnover
* Jackofsky (1984) Integrated Process Model
* Lee et al. (1991) Unfolding Model of Voluntary Employee Turnover<ref>{{cite journal | last1 = Lee | first1 = T. H. | last2 = Gerhart | first2 = B. | last3 = Weller | first3 = I. | last4 = Trevor | first4 = C. O. | year = 2008 | title = Understanding voluntary turnover: Path-specific job satisfaction effects and the importance of unsolicited job offers | journal = Academy of Management Journal | volume = 51 | issue = 4| pages = 651–671 | doi=10.5465/amr.2008.33665124}}</ref>
* Aquino et al. (1997) Referent Cognitions Model
* Mitchell & Lee (2001) Job Embeddedness Model
* Laulié & Morgeson (2021) Turnover Events Theory.<ref>{{cite journal | last1 = Laulié | first1 = L. | last2 = Morgeson | first2 = F.P. | year = 2021 | title = The end is just the beginning: Turnover events and their impact on those who remain | journal = Personnel Psychology | volume = 74 | issue = 3| pages = 387–409 | doi = 10.1111/peps.12422 }}</ref>

==See also==
* [[Adaptive performance]]
* [[Employee retention]]
* [[Human resource metrics]]
* [[Job satisfaction]]
* [[Realistic job preview]]

== References ==
{{Reflist|2}}

==Further reading==
* {{cite book |last=Colvin |first=Fred H. |author-link=Fred H. Colvin |title=Labor turnover, loyalty and output: a consideration of the trend of the times as shown by the results of war activities in the machine shops and elsewhere |publisher=[[McGraw-Hill]] |year=1919 |location=[[New York City]] |url=https://books.google.com/books?id=sZo2AAAAMAAJ |oclc=512539 |lccn=19006158}}

{{Employment}}
{{Workplace}}
{{Authority control}}

{{DEFAULTSORT:Turnover (Employment)}}
[[Category:Industrial and organizational psychology]]
[[Category:Human resource management]]
[[Category:Workplace]]
[[Category:Demographic economics]]