DECISIONS AND ORGANISATION

The cost of employee turnover: what to measure before choosing a solution.

A percentage says something is happening. The decision comes from segmentation, from the reasons learned in conversations, and from choosing a first action.

THE HUMX TEAM
~2 MIN READ

Before retention programmes, two things are worth having: a clear measurement and a few conversations. They help you choose where an intervention is worthwhile.

What you measure and how

The basic formula: voluntary leavers in a period, divided by the average headcount in the same period, multiplied by 100. What matters is using the same interval in both terms and separating departures at the employee's initiative from the rest.

Two separations help more than one global figure: departures in the first months after hiring, which say something about selection and onboarding, and departures by role, which show where the issue concentrates.

A hypothetical example: 3 voluntary leavers and an average headcount of 60 people, within one quarter, give 5% for that quarter. Do not automatically turn it into an annual rate; the annual calculation uses the departures and the average headcount of the whole year.

The cost components, kept separate

COMPONENT WHAT IT COVERS

Direct costs The actual replacement spend: advertising the role, assessments, fees, paperwork.

Internal capacity The team's hours for selection, handover and onboarding, as a measure of the attention consumed.

Opportunity What was not done while the role was uncovered, estimated on written assumptions.

Only distinct components are added up: the same hours or the same postponed delivery do not belong in two categories. We prefer components calculated on the company's own situation, not salary multiples borrowed from other contexts.

Segmentation, with care for confidentiality

The same figure becomes useful when you split it by role, by site and by tenure. When a segment holds very few people, the result is reported in aggregate or commented on qualitatively: very small groups can make individuals identifiable and call for care in interpretation.

The percentage alone is not a cause. Alongside it you need the exit conversations, the conversations with the remaining team, and operational data: working hours, workload, recent changes in supervision. The factsheet from CIPD on turnover and retention supports the same idea: the value comes from understanding why people leave, not from tracking a single indicator.

The decision sheet, on one page

A structure you fill in your own spreadsheet, with the company's data.

The period analysed and the average headcount for the same period.

The voluntary leavers, separated from the rest, and those in the first months.

The segments with the most departures and those with too little data.

The reasons that keep coming up in conversations, noted as themes, not as quotes.

The cost components, each with the assumption it rests on.

The first action, its owner and the review date.

One action at a time, on the clearest segment. That is how you see whether it changed anything.

The practical step

Calculate the rate for the last quarter, segment by role and choose a single action, with an owner and a review date. If the action touches selection, see what to compare in a recruitment offer; if it touches the first months, start from the onboarding plan.

Let's choose the first step.

We look at the figures, the segments and what people say, then choose one action. See how we work on training and management development.

Let's choose the first step →