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    Measuring Turnover: Internal vs. External Turnover

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    Roshan Jha
    Voluntary and involuntary turnover are the two main types of employee turnover. Voluntary turnover occurs when an employee leaves by choice for reasons like lack of challenge, better opportunities elsewhere, pay, or supervision. Involuntary turnover is when an employee is fired. Turnover rate is calculated by dividing the number of employee separations during a period by the total number of employees and multiplying by 100. While some turnover is undesirable when lower performing employees leave, high turnover rates can be problematic for organizations and are influenced by both external market factors and internal workplace issues.

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    Measuring Turnover: Internal vs. External Turnover

    Uploaded by

    Roshan Jha
    61 views1 page
    Voluntary and involuntary turnover are the two main types of employee turnover. Voluntary turnover occurs when an employee leaves by choice for reasons like lack of challenge, better opportunities elsewhere, pay, or supervision. Involuntary turnover is when an employee is fired. Turnover rate is calculated by dividing the number of employee separations during a period by the total number of employees and multiplying by 100. While some turnover is undesirable when lower performing employees leave, high turnover rates can be problematic for organizations and are influenced by both external market factors and internal workplace issues.

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    types of turnover

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    Voluntary and involuntary turnover are the two main types of employee turnover. Voluntary turnover occurs when an employee leaves by choice for reasons like lack of challenge, better opportunities elsewhere, pay, or supervision. Involuntary turnover is when an employee is fired. Turnover rate is calculated by dividing the number of employee separations during a period by the total number of employees and multiplying by 100. While some turnover is undesirable when lower performing employees leave, high turnover rates can be problematic for organizations and are influenced by both external market factors and internal workplace issues.

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    Measuring Turnover: Internal vs. External Turnover

    Uploaded by

    Roshan Jha
    Voluntary and involuntary turnover are the two main types of employee turnover. Voluntary turnover occurs when an employee leaves by choice for reasons like lack of challenge, better opportunities elsewhere, pay, or supervision. Involuntary turnover is when an employee is fired. Turnover rate is calculated by dividing the number of employee separations during a period by the total number of employees and multiplying by 100. While some turnover is undesirable when lower performing employees leave, high turnover rates can be problematic for organizations and are influenced by both external market factors and internal workplace issues.

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    Turnover often is classified as voluntary or involuntary.

    The involuntary turnover occurs when an


    employee is fired. Voluntary turnover occurs
    when an employee leaves by choice and can be caused by many factors. Causes include lack of
    challenge, better opportunity elsewhere, pay, supervision, geography, and pressure. Certainly, not
    all turnover is negative. Some workforce losses  are quite desirable, especially if those workers who
    leave are lower-performing, less reliable individuals.

    MEASURING TURNOVER
    The turnover rate for an organization can be computed in different ways. The following formula from
    the U.S. Department of Labor is widely used. (Separation means leaving the organization.)

    Number of employee separations during the month X 100


    (Total number of employees at mid month)

    For example, in a business with an average of 300 employees over the year, 21 of whom leave,
    labour turnover is 7%. This is derived from (21/300)*100.

    Facts [+]

    Employee turnover is calculated by dividing the number of annual terminations by the average
    number of employees in a given work force. The average employee turnover rate in the U.S. is about
    12% to 15% annually. At the high end, fast food retailers experience up to 300% employee turnover.
    At the low end, advanced, market leading technology companies experience turnover of less than 8%.

    Internal vs. External turnover


    Like recruitment, turnover can be classified as 'internal' or 'external'. Internal turnover involves
    employees leaving their current positions and taking new positions within the same organization.
    Both positive (such as increased morale from the change of task and supervisor) and negative [such
    as project/relational disruption, or the Peter Principle (Peter Principle: Observation that in an
    hierarchy people tend to rise to "their level of incompetence." Thus, as people are promoted, they
    become progressively less-effective because good performance in one job does not guaranty similar
    performance in another. Named after the Canadian researcher Dr. Laurence J. Peter (1910-90) who
    popularized this observation in his 1969 book 'The Peter Principle.')] effects of internal turnover exist,
    and therefore, it may be equally important to monitor this form of turnover as it is to monitor its
    external counterpart. Internal turnover might be moderated and controlled by typical HR
    mechanisms, such as an internal recruitment policy or formal succession planning.

    Employee turnover is caused by external and internal factors. External influences include local
    economic conditions and labor market conditions. Internal causes include such things as non-
    competitive compensation, high stress, poor working conditions, monotony, sub-par supervision,
    dysfunctional job fit, inadequate training, poor communications, and loose organization practices.

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