Turnover and retention are closely linked to employee engagement. High turnover and low retention rates signal problems with aspects of the organization’s culture and employee experience. This includes whether it is paying competitive salaries, providing training and opportunities for advancement and offering a good work/life balance for employees, as well as how effective management is. And if it can’t attract more people with new and specialized skills, it can’t innovate or execute on growth plans.Įmployee turnover and retention rates provide strong indicators about how well the business is taking care of its people. If a business doesn’t have the right people with the right skills, it can’t deliver its products and services. Why Measuring Employee Retention & Turnover Matters Monthly turnover rates are added together to calculate and compare annual turnover rates. This provides a more accurate and actionable view of departures that are the result of, for instance, seasonal layoffs and give more accurate long-term insights into that rate. Turnover rates provide important snapshots of employee movement and are, for that reason, calculated and viewed by month or quarter. Given that it’s a measure of the company’s stability, retention rates are most often calculated over a longer period of time, typically annually. ![]() Involuntary turnovers are departures that result because of an employer’s decision when the employee is still capable of and willing to perform his or her job duties and includes terminations that are the result of performance, behavioral issues, seasonal layoffs and reductions in force (RIFs).
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