By Dr. John Sullivan, Head and Professor of Human Resource Management College of Business, San Francisco State University

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There are many opinions about what is the "ideal" turnover rate. Here is how a CEO might look at it.

• Voluntary turnover should be zero for the top 10% of our best performers.
  
  
• Turnover should be 100% for the bottom 10% (our Worst performers).
  
  
• Voluntary turnover should be zero for the key jobs and key competencies that we have identified.
  
  
• Our voluntary turnover should be 10% or more below that of our closest competitors and 10% lower than our firms rate of last year.
  
  
• Managers that have a turnover rate (for top performers and key jobs) that is 10% below our corporate average should be rewarded. All employees of low (voluntary) turnover departments should get a bonus.
  
  
• Managers that have a turnover rate (for top performers and key jobs) that is 10% above our average should be given special consulting and training help from HR.
  
  
• The turnover rate for HR people that worry too much about turnover numbers and not about worker and departmental productivity (and it's causes) should be 100% :-).

Real company turnover rates are available through the Saratoga Institute and in the Jan. issue of Fortune Magazine

Other possible retention measures

T/O = Turnover Rate

1. Performance turnover - Voluntary t/o rate of top 25% of a companies performers as measured by performance. appraisal.
   
   
2. Key position turnover - Voluntary t/o rate for each identified "essential/ hard to hire" position.
   
   
3. Key competency turnover - Voluntary t/o of individuals that possess skills/competencies essential to the company.
   
   
4. Competition turnover - % of voluntary t/o that immediately go to work for our direct competitors.
   
   
5. Retention turnover - % of "targeted for retention" EE's who leave anyway.
   
   
6. Exempt turnover - % of all exempt employees who leave each year.
   
   
7. Retention ranking by manager - Ranking of managers by the voluntary t/o rates in their divisions/ depts.
   
   
8. Benchmark turnover - Our t/o rate compared to: - our industry average - our key competitor - last years rate.
   
   
9. "Positive/Good (involuntary) turnover" - % of identified "low performers' (or those lacking key competencies) who leave each year.
   
   
10. Other - Turnover's impact on our customers, image, recruiting and the performance of other employees.

© April, 1998

by Dr. John Sullivan

Click here to email Dr. Sullivan
Head and Professor of Human Resource Management
College of Business, San Francisco State University

Click here to go to Dr. Sullivan's Index Page