Turnover

Turnover rates are showing a slight increase according to Employers Council’s recently published 2017 HR Metrics Survey (formerly titled Personnel Pulse Survey). This survey tracks HR metrics such as turnover, tenure, job absence rates, compensation expense, cost of benefits, and executive benefits this year.

It is important for employers to look at benchmark turnover trends within their industry and geographic area. In our 2017 survey, Arizona, Colorado, and Wyoming respondents reported higher 2016 turnover rates for All Employees versus 2015 rates. Utah was the only area in the survey that reported a slight decrease in All Employee Turnover from 22 percent versus 20 percent in 2016. The trend of higher turnover rates in 2016 versus 2015 is the same for the West region of the country. Following is a chart showing the turnover rate for All Employees for the last five years.

 

The turnover rates in the above chart for Arizona, Colorado, Utah, and Wyoming are from Employers Council’s HR Metrics Surveys, unless noted otherwise. The West region and U.S. figures are from the Bureau of Labor Statistics’ Job Openings and Labor Turnover Report, published March 2017.

* Utah data from 2012-2014 are from the Quarterly Turnover Surveys.

** The West region includes Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming.

Does the average age of the workforce in the organization affect turnover rates? In our 2017 HR Metrics Survey, we found that employers with an average workforce age between 25 and 35 years had a higher turnover rate than employers whose workforces had a different average age. The chart below shows organizations with an average workforce age of 25 to 35 years reported 30.4 percent turnover, which is down from 32.4 percent in 2015. This turnover rate is significantly higher versus other average workforce ages as shown in the graph below. Employers with an average workforce age between 25 and 35 years might want to focus on organizational programs/policies designed specifically for that age demographic to reduce turnover.

Sometimes turnover can be a positive outcome for an employer if the employee who left the organization was a poor performer. We call this “desirable” turnover. According to survey results, the majority of turnovers in 2016 in each geographic area were “neutral” turnover events. Colorado respondents reported lower “undesirable” turnover rates at 16 percent versus the other geographic areas surveyed. Employers might want to consider focusing efforts on reducing the “undesirable” turnovers in their organization to retain those high-performing and/or key employees in the organization.

 

What can organizations do to reduce turnover, especially undesirable (regrettable) turnover?

Understanding turnover trends allows employers to focus attention on hiring the right people for the job, onboarding new employees, and retaining high performers to avoid “undesirable” turnover. If turnover is high in your organization—don’t worry! You can begin to implement or enhance policies/programs to reduce unwanted turnover and create a workplace where people want to stay.

The 2017 HR Metrics Survey also includes data on Tenure Rates, Job Absence Rates, Compensation Expense, Cost of Benefits, and Executive Benefits. For more information on these topics, please visit our website at EmployersCouncil.org to download the full report. Utah Grandfathered members interested in purchasing a copy of the survey, please email surveys@EmployersCouncil.org or call 800.884.1328.