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Turnover : What is it ? How to calculate it? How to reduce it?

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According to a study by Hay Group, the global turnover rate has been continuously rising since 2013 and is now estimated at 23%. With 15.1%, France is far behind this average. However, considering the "invasion" of millennials on the labor market and the need for concrete measures from companies, the situation is likely to get worse. Indeed, a Deloitte study reveals that 66% of the millennials surveyed plan to leave their current company next year. With this in mind, it's time to ask ourselves how to control turnover.

What is company turnover?

Turnover refers to the renewal of personnel (or job rotation) in a company following the departure of employees. These departures can be of different kinds: resignation, dismissal, retirement, mutually agreed contract termination or even non-renewal of the trial period.

In any case, turnover is an important concept because it is an indicator of a company’s well-being and reflects the quality of human resources management.

How do you calculate the turnover rate? 🤔

Contrary to what one might think, having a zero turnover does not mean that the company manages its human resources perfectly. A turnover equal to 0 is not healthy for a company because it means a retention of all its employees: the good ones, whose motivation can suffer from the general lack of engagement, as well as the bad ones that undermine productivity.

On the other hand, a high turnover rate reveals a high number of departures and therefore a problem in the social climate of the company. So the ideal situation is to have a low rate.

To calculate this turnover rate, there are different ways:

   👉 Number of departures / Number of arrivals over a given period 

   👉 (Number of departures - Number of arrivals)/staff at the beginning of the period or over 12 months 

Nothing very complicated in itself! However, while these figures allow the company to situate itself, they do not reveal the deep nature of the problem. 

What are the causes of turnover? 👀

Is it recruitment errors? Are managers doing their jobs well? Does the company manage to attract and retain its talents? Are the talents identified? These are all questions that come to mind in understanding this phenomenon.

According to a study conducted by the service provider Kelly Services, the main factors of turnover are employee unhappiness (social climate, stress...), the successful search for better professional opportunities elsewhere, the imbalance between professional and private life, a lack of real perspective of evolution within the company, salary and other benefits 🤷♀️

Replacing an employee can cost the company the equivalent of 9 cumulative months of their salary, according to Easyrecrue.

And this phenomenon has a cost ‼️ Indeed, turnover (or the renewal rate) generates departure, replacement and integration costs to which you have to add the non-productivity of the new employee during his or her first days. In total, replacing an employee can cost the company the equivalent of 9 months of their salary, according to Easyrecrue. However, the consequences of these departures are not only financial. It impacts the morale of the teams, disorganizes the company and damages the company's employer brand.

How to reduce turnover?

1. Improving the recruitment process

If the majority of departures occur between the signing of the contract and the end of the trial period, take a look at your recruitment process and your onboarding program. A good onboarding program can reduce turnover by 31% according to DLM News.

This is because before the new employee even joins the company, he or she is greeted with personalized messages and information about the company's history and culture. In addition, a good onboarding program gives the new employee a clear vision of his or her role in the company. All these elements create a sense of belonging and make them want to invest themselves more.  

2. Increasing the drivers of well-being

If the majority of departures occur in the first year, ask yourself about the drivers that would make the employee want to commit more to their position and to the company: strong ties between employees, recognition, work-life balance, time management, diverse and empowering missions... 💪

3. Improving perspectives for career development

If the majority of departures are between 4 and 5 years of seniority, ask yourself questions about the experience and evolution perspectives that you offer to your employees.

Turnover : What is it ? How to calculate it? How to reduce it?

According to a study conducted by the recruitment firm Robert Half, 82.5% of HR managers are concerned about the departure of their employees. This is understandable given the reasons outlined above. It is therefore essential to understand the reasons behind your turnover rate, for example by means of a questionnaire or an interview with the employees leaving the company, in order to adjust the recruitment and onboarding processes, for example.

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