ISO/TS 30421:2021 pdf – Human resource management — Turnover and retention metrics

ISO/TS 30421:2021 pdf – Human resource management — Turnover and retention metrics.
1 Scope This document describes the elements of workforce turnover and retention and provides comparable measures for internal and external reporting. This document also highlights issues that need to be considered when interpreting the turnover and retention data, especially when deciding on the appropriate intervention internally and when reporting this to external stakeholders (e.g. regulators, investors). 2 Normative references The following documents are referred to in the text in such a way that some or all of their content constitutes requirements of this document. For dated references, only the edition cited applies. For undated references, the latest edition of the referenced document (including any amendments) applies. ISO 30400:2016, Human resource management — Vocabulary 3 Terms and definitions For the purposes of this document, the terms and definitions given in ISO 30400 apply. ISO and IEC maintain terminological databases for use in standardization at the following addresses: — ISO Online browsing platform: available at https://www.iso .org/obp — IEC Electropedia: available at http://www.electropedia .org/ 4 Turnover 4.1 General In order to understand the turnover situation, an organization shall establish the level of turnover, the cost of this turnover and the reasons for it. 4.2 Description Turnover is the rate at which employees leave a workforce and are replaced within a defined period. 4.3 Purpose of measuring turnover 4.3.1 Internal benchmarking Refers to the practice of comparing turnover in different parts of the organization to: a) track trends over time; b) compare the current year ’s level with the previous year ’s level; c) target turnover hotspots;d) monitor the success of retention initiatives. 4.3.2 External benchmarking Refers to the practice of comparing turnover level in the company with national industry averages or with levels of turnover with companies in the same area: a) using published survey data; b) accessing and forming benchmarking clubs for data exchange purposes. Both put the organization’s turnover information into context. 4.3.3 Understanding why people leave In order to reduce the level of dysfunctional turnover, it is necessary to understand why people leave. The first important distinction is whether turnover is unavoidable or avoidable. Unavoidable turnover relates to circumstances outside management ’s control, for example ill health, moving to a new house or personal circumstances. Avoidable turnover relates to departures that are caused by some form of dissatisfaction that is potentially within management ’s control. Rather than making assumptions about the causes of turnover, several qualitative sources may be used: exit interviews; staff satisfaction surveys; online review sites. These sources of information can help an organization highlight potential sources of satisfaction and dissatisfaction to target retention initiatives appropriately for the entire workforce. Other approaches include post-departure surveys of ex-employees, analysis of stayers to see what factors encourage people to remain and last-job-move surveys. 4.4 Formula for turnover rate A variety of quantitative methods are often used to measure the level of turnover rate: a) crude turnover rate calculation; b) stability rate calculation – establishing how long people tend to stay in the organization; c) cohort analysis – establishing the stability rate of one specific group or cohort of employees so that the retention of this staff group or cohort can be tracked over time.
4.6 Turnover trends and impact 4.6.1 General Turnover levels can vary, for example between occupations and industries and from region to region. Users of this metric will possibly wish to track turnover on a month-by-month or year-on-year basis within the firm against industry or sector trends. There is no defined point at which employee turnover has a negative impact on organizational performance. Much depends on the organizational context and the kinds of labour markets in which the organization competes. Some employee turnover can benefit the organization, for example when a poorly performing employee is replaced by a more productive one. Moderate levels of turnover can also reduce staff costs where business activity is unpredictable or volatile. Employers need to be aware of employee turnover rates in their organization and how these affect the organization’s performance and ability to achieve its strategic goals. An appreciation of turnover level across occupations, locations and groups can help inform a comprehensive workforce planning strategy. The organization will possibly wish to examine which work groups are material to its core functions and monitor turnover levels in these accordingly. 4.6.2 Segmentation of turnover The crude turnover rate can be further broken down in many ways, such as by seniority, by job family or by criticality. Each organization, based on what is important to the optimal management of its human resources, has its segmentation priorities. Some segmentation approaches are described in 4.7. 4.6.3 explores segmentation based on criticality.