Turnover

Employee turnover, or employee turnover rate, is the measurement of the number of employees who leave an organization during a specified time period, typically one year. While an organization usually measures the total number of employees who leave, turnover can also apply to subcategories within an organization like individual departments or demographic groups.

turnover

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Divide the sum total of the number of employees that leave within a specific period of time (month, quarter, year, etc.) by the average number of employees that work within the selected time frame. Multiply that number by 100 to calculate the employee turnover rate.

Do not include temporary hires or employees who go on temporary leave in either factor of the equation. Incorporating these kinds of temporary shifts in workforce numbers will skew your turnover rate higher than it really is.

Involuntary turnover is when an employer chooses to terminate an employee or remove them permanently from the group in question, possibly because of poor performance, toxic behavior, or other reasons.

The case of Panera Bread shows just how deep the employee turnover issue is for restaurant companies. Panera loses close to 100% of workers every year, and by fast-food industry standards that's considered good.

"In the restaurant industry, turnover is 130%, turning over more than a full workforce every year," said Panera bread CFO Michael Bufano at CNBC's @Work Human Capital + Finance conference in July. "We are a little under 100%, but still a huge number."

"Now turnover is absolutely excessive, and some chains are beginning to put numbers on the cost of turnover. I know some chains that are focused on it," Batt said. "Because turnover is getting so serious and because chains have the ability to do the HR analytics, they can begin to cost out turnover and say, 'This is not a cost we have taken seriously, because historically we were counting on high turnover model as acceptable.'"

"If people get beyond 90 days, turnover really drops, and so that's why we make investments in technology and training in those first 90 days. It has a huge return," the Panera CFO said at the CNBC event in Chicago. "Turnover and recruiting costs you money and is felt in the guest experience."

Robin B. DiPietro, director of the International Institute for Foodservice Research and Education at the University of South Carolina's School of Hotel, Restaurant and Tourism Management, says that six years ago, when she was in touch with Burger King, the average cost of turnover was about $600 per employee.

The cost per employee now is estimated by the National Restaurant Association at $2,000 per employee. Those figures will vary by restaurant type as fast-food employees are still less expensive to turn over than those in upscale dining. Restaurant research firm TDn2K calculated replacement costs at $2,100 to $2,800. But all operators feel the pinch of the deepening turnover crisis, especially with a higher minimum wage, and higher recurring business costs.

Panera declined to offer any additional details on its plans to reduce employee turnover beyond what its CFO said at the CNBC event. A spokesman said there was reticence to "share details on more of the secret sauce and statistical success."

Low wages, lack of career paths and an overwhelming belief among the working public that fast-food jobs should only ever be temporary all contribute to the worsening turnover issues. "You talk to an employee here in the U.S. and it is nothing to be proud of," he said. "It's a job until I graduate or until I'm back on my feet," he said. "No one who thinks of a job as temporary is motivated."

There are no other job segments in the U.S. that have higher turnover than the fast-food and fast-casual segments of the restaurant industry, according to DiPietro at the University of South Carolina's School of Hotel, Restaurant and Tourism Management. "Not even retail."

It's a devil's bargain for the companies to accept the status quo in turnover, Pizam said, with lower wages justified by their limited ability to pass along price increases to consumers, but in turn, restaurant operators paying the price through the expense of training and retraining of personnel multiple times a year.

She said the labor problems can be solved by methods other than robots, such as chains putting more effort into hiring better managers and treating workers with more respect. That requires companies being willing to give workers more hours and more predictable scheduling. "That is not very costly for HR to invest in. It just takes managers to be frankly more competent and pay more attention to the issue. ... Maybe they won't optimize labor costs to the extent they want to, but it will pay off in lower turnover and more satisfies workers and better operations. That should not be hard problem to fix."

Objective: The novel coronavirus disease (COVID-19) has drastically impacted the provision of mental health services. Changes required of providers were substantial and could lead to increased burnout and, subsequently, increased turnover intentions. This study examined burnout experienced by mental health services providers in the context of COVID-19 and through the lens of the job demands-resources (JD-R) model. We examined the effects of work changes on burnout and subsequent turnover intentions, and how job and personal resources may have buffered the extent to which work changes due to COVID-19 impacted burnout. Methods: Service providers (n = 93) from six community mental health centers (CMHCs) in one Midwestern state in the United States completed surveys as part of service contracts to implement evidence-based practices. Path analysis tested the unconditional indirect relations between work changes and turnover intentions through burnout. Moderated mediation determined whether the indirect effect of work changes on turnover intentions via burnout varied in strength by job and personal resources. Results: Work changes had a significant indirect effect on turnover intentions through burnout ( β ^ = .140, 95% CI = .072, .217). This indirect effect varied as a function of two job resources, organizational trust and perceived organizational support. Conclusions and Implications for Practice: Burnout was relatively low only when work changes were low and job resources levels high. When work changes were high, burnout was similarly high across levels of job resources. To minimize burnout, organizations should limit task, setting, and team-related work changes to the extent possible. (PsycInfo Database Record (c) 2021 APA, all rights reserved).

Correlational evidence links higher teacher turnover to poorer-quality child-teacher relationships (Phillips, Austin, and Whitebook 2016). In addition, a recent study of Head Start participants found that kids who experienced higher teacher turnover during the school year had smaller gains in vocabulary and literacy and higher levels of parent-reported behavior problems than peers who had more continuity with their caregivers (Markowitz 2019).1

To determine where teacher turnover is most likely to occur, we examined teacher turnover rates at ECE centers, by program type and by whether a center receives public reimbursement payments, using microdata from the 2019 National Survey of Early Childhood Education (NSECE). We found that staff turnover is higher in centers with lower wages. (See Figure 1.) Among centers with average wages below $10 per hour, 23.1 percent of staff working with children ages zero to five years leave over the course of a year. By contrast, centers with average wages at or above $25 per hour have average turnover of 7.5 percent.2

Next, we examine staff turnover rates and teacher wages by four center types: school-sponsored, Head Start, public pre-K-funded, and all other centers. (See the sidebar for center type definitions.) These types are substantively different in ways that likely matter for teacher experiences, making it important to consider them separately. For example, school-sponsored centers are more likely to offer health and retirement benefits than other center types (Johnson, Martin, and Schochet 2020).

We applied a variety of analytical methods to disentangle the roles of center type and center wage. As noted above, the results cannot be interpreted as the impact of changes in compensation, but they may still be illuminating. We found that both average wages and center type continue to have statistically and economically significant associations with teacher turnover when considered simultaneously.

Importantly, our results align with those of researchers using the 2012 wave of NSECE data, which showed a negative association between turnover and teacher wages (Caven et al. 2021; Johnson, Martin, and Schochet 2020). Other research also shows that teacher wages are associated positively with program quality and negatively with turnover rates (Whitebook, Phillips, and Howes 2014).

Perhaps the most convincing evidence comes from an experiment that offered $1,500 in bonus payments to teachers over an eight-month period. Turnover fell from 41 percent to 18 percent among assistant teachers and from 20 percent to 14 percent among lead teachers working in child care centers (Bassok et al. 2021). While bonus payments reduced turnover rates, the rates remained quite high compared to the turnover rate of only 4 percent among school-based teachers.

Our analysis shows that teacher turnover is a particular issue for ECE centers that serve lower-income families and that higher turnover is generally associated with lower teacher compensation. In combination with other evidence suggesting that children from low-income households are negatively affected by turnover, this presents a challenge for the ECE sector and for policymakers.

Background: There is a large body of research related to nursing retention; however, there is little information specific to newly licensed registered nurse turnover. Incidence rates of turnover among new nurses are unknown because most turnover data are not from nationally representative samples of nurses. 041b061a72