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Is Your Employee Turnover Rate Acceptable?

employee turnover rate

For any organizations of any size, it is required to take staff turnover into account. This is to calculate the cost of doing business. Basically, it is a calculation of wastage whereby you take the number of employees who leave the company, to the total number of employees in one company.

For example,
Company Y: Employed 1,000 persons in January 2010. By January 2011, 300 had left. This gave a high turnover of
staff turnover

Just imagine that if the cost of turnover; finding, interviewing, training a new hire is at minimum RM1,500 per headcount. Although RM1,500 may not really sound like a lot of money but if you factor in that nearly 4 out of every 10 new employees leave for whatever reason. Then, it may need one store to recover that cost. The calculation: If a store’s net margin is 3%, the store has to sell RM50,000 worth of items to recover the cost of losing a single employee!

So, the turnover rate should be kept as low as possible and it must reach the acceptable level in modern large organizations in order to remain competitive in the industry.

My personal advice is try to employ the right candidate and potential to continue develop their careers. Company can always look for investment in upgrading the workforce in order to provide ongoing career development program. Besides that, they can also develop an attractive compensation package which includes long-term incentive compensation, bonus and profit-sharing plans to bring more benefits to employee.

Tags: , , , November 30th, 2011 Posted in Economic Analysis | 5,208 views

One Response to “Is Your Employee Turnover Rate Acceptable?”

  1. Arden Says:

    Can you tell us more about this? I’d love to find out some additional information.



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