THE TURNOVER FACTOR

By Ivan Whitaker

Although turnover is usually measured in a human resources (HR) setting, it is advantageous for communications managers to understand how to evaluate its impact. More importantly, communications managers should understand the implications in regards to the budget, training, scheduling, morale, and meeting the demands of the organization’s goals.

Reasons 

Studies indicate a national turnover rate between 17%–19% in telecommunications. In other words, two out of every 10 telecommunicators leave the profession each year. A telecommunicator’s career averages two to three years.

Reasons for high turnover include: low knowledge, skills, and abilities (KSAs) of applicants leading to costly errors and terminations; the “adjustment factor” or inability to conform to the demands of the profession; disciplinary issues; stress; low pay; scheduling conflicts and rotating shifts; workload; lack of leadership; inefficient training programs; and limited promotional opportunity.

Regardless of the reasons, the impact of turnover must be evaluated.

There are several ways to calculate turnover. For simplicity we will use the W-2 Method.
•   Identify the number of W-2s issued in a particular year
•   For that same year, determine the final number of employees on Dec. 31
•   Divide the number of W-2s issued by the number of employees remaining on Dec. 31 of the year evaluated
•   Subtract 1
•   Multiply by 100

Say you have 60 employees at the end of 2010; however, 70 W-2s were issued. Divide: 70/60 is equal to 1.17. Subtract 1 and you have 0.17. Multiply 0.17 by 100 and 17% is your turnover rate. Ultimately, this means out of 70 employees, 10 were lost in 2010.

Management should primarily focus on turnover types for classification purposes since it is essential to identify the categories in range of the manager’s control. Employee loss due to low job satisfaction or low KSAs must be of primary concern to leadership. Employee loss due to health issues, retirement, childcare, or maternity leave is not under leadership control; however, these reasons are numerically predictable and should be monitored.

There are three factors attributing to an employee’s decision to leave: the perceived desirability of leaving, the perceived ease of leaving, and the alternatives available to the employee. As the desires of an employee change, so does the employee/organization relationship. Members may perceive the current work-based compensation and rewards inadequate. This is especially the case when organizations increase the workload of employees without compensation. The absence of flexible work schedules and limited perks may also cause employee dissatisfaction.

Budget impact

Budgeting is usually a part of a manager’s responsibilities. Line items might include capital, supplies, training, personnel costs, overtime, maintenance, facilities, and certifications. Several line items are directly impacted by turnover. Of course, overtime is easily recognizable. How about training? What is the amount your center actually spends on training each year (the bottom line)? In evaluating a more inclusive cost factor, how much is your center spending per new hire?

The math

To determine the training cost per employee (TCPE) you will need:
•   NHHR: The hourly rate of the new hires—this is not the base hourly rate; include benefits in the hourly rate for accuracy (An employee making $12 per hour may actually cost the agency $16.50 per hour with benefits)
•   TH: The true number of training hours—include certification courses, orientation, and on-the-job-training
•   AOT: The attributed overtime—A new hire placed on the allocation cannot be counted on the daily schedule. A trained member must cover the shift until the new hire finishes training. Although overtime is usually budgeted, capturing this number gives a detailed account of overspending in the overtime line item.
•   I: Incentives paid to the trainer
•   CC: Certification costs

Equation breakdown

Seventeen employees would equate to $312,596. This is an astronomical number. Do you ever wonder why you are always overspent in the overtime line item? In the next column, we will look at controlling turnover as part of the HR process and ways to increase employee retention.

Sources

1. Alderman, J. (2011, Sept.) Turnover rate in line with national average says acting chief of emergency services. Cumberland Times-News

2. Carlson, B. (2012, Oct.) America’s butts are plaguing emergency responders with mistaken calls. The Daily

3. Headsets911: Common stressors for dispatchers. Retrieved Jan. 21, 2013 from http://www.headsets911.com/commonstressors.htm

4. March, J. G., & Simon, H. A. 1958. Organizations. New York: John Wiley

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