Turnover Percentage: Digging Deeper to Gain Insight

How much do you know about turnover in your organization? For many, turnover is just one more percentage heard during quarterly meetings, with a brief explanation of whether that’s “good” or “bad” according to industry standards, but little more. Often, the only time anyone will really sit down and pull that number apart is when it rises into an unacceptable range—and that may be the first time they discover just how complicated turnover issues can be.

In truth, turnover percentage is unlike many other metrics, in that it’s not a sum of various parts; it’s one very limited tally of a complex, multi-layered issue, and by itself, it offers very little insight into the health of your business. For example, if one organization has a yearly turnover rate of 20 percent while a competitor has just five percent turnover, simple math would imply that Company A is doing something wrong.

But what if Company B is losing all of its top performers in that five percent? And what if Company A understands they can hire contracted seasonal workers for heavy warehouse business, while Company B is making existing staff work overtime during the holidays or keeping excess staff idle during lulls? Would you still say Company B is the overall winner?  

A turnover percentage might tell you that you’re hiring as many people as you’re losing, but it can’t tell you where in your organization you are experiencing turnover, who is leaving or staying, or why. If it could, you might understand that 10 percent turnover one year can be a great thing for a company needing to cut overhead in bloated, underperforming departments, while the same number can be cause for worry in an otherwise streamlined organization.   

These and others are the issues hiding behind the simple number of a turnover percentage, and if you have no way to pull in more data and analyze that percentage relative to other factors, you’re not really in any position to say whether that percentage is good or bad. In fact, if you’re not looking deeper into turnover every time you present on important issues, you might as well not even give a number.

Of course, nobody reading this is thinking, “I guess I might as well keep that turnover percentage to myself from now on,” and we aren’t really suggesting anyone do so. We’re simply making the case for deeper analysis of turnover by debunking the notion that one number tells the whole story. And we’re likewise confident that any time spent analyzing turnover in depth will be paid back in spades, by revealing trends and insights that can help you understand the inner workings of your organization.