Whether your company is losing employees because they’re quitting or because you are terminating them, you need to know why. In this article, we’ll discuss voluntary vs. involuntary employee turnover types and what they mean for your business. Show
The Turnover Calculation FormulaFirst things first: Every HR department should be tracking the data around departing employees, so they know what the most frequent causes of turnover are (and can take action if necessary). Calculating your employee turnover rate can give you that data. Employee turnover rate is the percentage of employees who leave your organization during a certain period of time. Using this formula, you can track total turnover, which includes all terminations and voluntary departures—anyone who has left the company for any reason. However, in order to use this information to make positive changes in your company, you need to be able to sort turnover into two buckets, voluntary turnover vs. involuntary turnover, and calculate the turnover rate for each. Types Of Employee Turnover: Voluntary Vs. InvoluntaryVoluntary employee turnover occurs when employees willingly choose to leave their positions. Involuntary employee turnover occurs when employees are terminated from their positions. Involuntary Turnover ExamplesAt Genesis HR, we classify involuntary turnover into more than a dozen categories for our clients, including the following major types:
Dealing With Involuntary TurnoverAs an HR professional, the presence of a high involuntary turnover rate should compel you to examine the reasons behind it and address what you find. It could mean you’re not looking for the right people from the start, and as a result wasting time and resources on training and recruiting. Voluntary Turnover ExamplesWe classify voluntary turnover into 19 categories, with the most common being:
Dealing With Voluntary TurnoverBecause the cost of re-hiring is so high—plus onboarding and training—a reduction in voluntary turnover is almost always reflected in the bottom line. When dealing with voluntary turnover within an employee’s first 90 days, I first look at their hiring manager (to see if the manager set reasonable expectations) and the training program (to see if it provides the employee with the skills and knowledge they need to be successful in their role). If an employee is leaving for another job, it’s important to do a comparison between your company’s payscale and your competitors to see where you land. What about retirement & internal transfers?You may have noticed that neither retirement nor internal transfers landed on either list. In my mind, these two scenarios don’t qualify as turnover. Here’s why:
A note on functional and dysfunctional turnover:Another aspect to consider when reviewing employee turnover is functional vs. dysfunctional turnover.
Ideally, you have higher numbers of functional turnover and low numbers of dysfunctional turnover. However, calculating this type of turnover can be difficult, because the criteria for determining high and low performers changes depending on managers and supervisors. How much employee turnover is healthy?All turnover is not created equal. While many people think any amount of employee turnover is an ominous sign, I want to encourage business owners and leaders to view a certain amount of employee turnover as a good thing. So what are the numbers you should pay attention to?
The key here is to measure every single termination. Set your parameters of voluntary and involuntary turnover; be consistent in recording and measuring every termination; and think through the data so you can understand it. By analyzing the reasons and trends behind departures and taking corrective action when necessary, you can make your organization a better place to work. Want reduced employee turnover? Consider a PEO like Genesis.Companies that partner with a Professional Employer Organization (PEO) like Genesis HR typically have reduced turnover—as much as 10-14 percent lower annually than that of comparable companies. Here’s why:
With Genesis HR on your side, you’ll be able to hire high-performing employees and keep them from jumping ship. Less turnover means your company will be better positioned to meet its goals instead of getting caught in a rehiring/retraining trap. If that sounds like something you’d be interested in, we’d love to share more about how our PEO might be able to help your company reach its goals. Just contact us today! What is 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. Whether turnover is voluntary or involuntary, you need to get to the bottom of why any employees leaves.
What is an example of involuntary turnover?Involuntary Turnover Examples
Poor performance: The employee didn't perform well at the job, a fact which should be well-documented along with evidence of training. Unsatisfactory background check: This includes falsifying records and failed drug tests.
What is involuntary turnover?Definition of Involuntary Turnover:
Involuntary turnover is one type of turnover that occurs when an employee is terminated from a position. Employees may be let go for a wide range of reasons, including unsatisfactory job performance or inappropriate behavior, often called counterproductive work behavior (CWB).
Which of the following occurs when employees leave an organization for better opportunities?Voluntary turnover is any instance in which an employee actively chooses to leave. This can happen as a result of better job opportunities elsewhere, conflict within the workplace, disengagement, and more.
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