Notes on the Concept of Personnel Turnover

In its broadest sense, turnover means all movements of the workers to and from a firm. The most frequently used formula to calculate turnover rate in S/L.F, that is, total number of separations during a period on the average labor force during the same period. Turnover thus defined can be a useful measure in certain cases. However, this notion is not discriminating enough and renders difficult comparisons among different concerns. In particular, it seems necessary to distinguish between lay-offs and the other separations. As such, lay-offs are directly related to the economic fluctuations of the concern. Furthermore, the laid-off worker does not need to be replaced by a new worker. All separations, other than lay-offs, do demand replacement.

It is thus suggested that the meaning of turnover be restricted to separations demanding replacement. There would be turnover when a worker leaves permanently a concern and when a new worker has to be hired to fill the position left vacant. To calculate the rate of this restricted turnover, one has to know the number of accessions (A) as well as the number of separations (S). Moreover, one has to take into account the slope of the curve of the total number of workers. When the slope is positive, that is, when the concern is expanding, turnover is calculated by S/L.F. When the slope is negative, that is, the number of workers is decreasing, turnover is calculated by A/L.F. Moreover, turnover, when defined by replacement, must be calculated on very short period, preferably on a weekly basis. When, in a concern, there are many departments which have their own job specifications and their own fluctuations, turnover cannot be calculated for the concern as a whole but has to be calculated for each of these departments separately.