Benchmarking labour turnover, 2006 (1)

Our two-part guide to labour turnover starts with coverage of the business case for managing turnover, the ways of doing so, and how to make benchmarking comparisons. Includes a directory of labour turnover sources.

Key points

  • Part one of our 2006 guide to labour turnover focuses on the business case for measuring and managing retention, how to measure turnover and benchmark it, the sources of benchmarking data, and the ways of investigating the causes of resignations. It also contains our latest directory of labour turnover sources.
  • Far more employers wish to reduce their labour turnover than increase it. Turnover is relatively easily measured, and represents the most widely used HR metric. However, few employers also calculate its cost.
  • Published sources tend to provide overall turnover rates, although resignation rates are more useful. Some employers carefully analyse turnover by region, length of service and other factors.
  • Four in 10 employers who measure their turnover go on to benchmark it against external comparisons. Clubs and networks provide confidential sources of information. Published sources fall into four main groups: national surveys; occupational surveys; industry surveys; and data on individual employers.

"Labour turnover" is a curious concept. Although it represents no more than a term to describe the movement of staff in and out of an organisation, it is often accompanied by a great deal of emotional baggage.

Some employers see it in a positive light, as a safety valve that helps to achieve redundancies through "natural wastage" with the minimum of pain and expense. Turnover is also welcomed because it provides opportunities for fresh blood to enter the organisation from the wider labour market.

For other organisations, labour turnover has negative connotations. It represents the haemorrhage of skilled and experienced staff, and the prospect of high overheads to pay for continual recruitment drives and the induction and training of replacement workers.

Many employers, regardless of whether they welcome or deplore their labour turnover, often view it as a fact of life, an aspect of their people management over which little control can be exerted.

In fact, a great deal can be done to provide the conditions that ensure labour turnover does not run out of control. For most organisations, this means managing it in such a way that its level is reduced, rather than increased.

For example, our latest HR Prospects study found that HR managers are becoming increasingly concerned about their ability to retain staff. More than half of the 475 employers we contacted told us that they were finding it difficult to keep their labour turnover at comfortable levels1.

At much the same time as our own research, the Chartered Institute of Personnel and Development's (CIPD) annual recruitment, retention and turnover survey found that six times as many employers wanted to reduce their labour turnover as wished to increase it (56% compared with just 9%). When the CIPD asked its survey participants about the actual impact of labour turnover on their organisations' performance, almost eight times as many said that labour turnover has a negative impact as said it offers business benefits (69% versus 9%)2.

The business case

Labour turnover is just one of many ways in which the effectiveness of an employer's people management - and its HR function - can be measured. But it often enjoys a greater prominence and credibility than other HR metrics. It can be easier to show the financial impact of labour turnover on the organisation's overheads than for other HR measures. Also, many line managers will appreciate the consequences of high turnover among their own staff. And it is one of the few people-related yardsticks in widespread use, thereby enabling benchmarking to be undertaken.

Although it is possible to decry the mantra of "you can't manage what you don't measure", this is undoubtedly true in the case of labour turnover. Without a clear idea of the patterns of labour turnover and its causes (resignations, dismissals, retirements and so on), it will not be possible to either appreciate that a problem exists or begin to devise a solution to it.

In fact, labour turnover is now widely used as a measure of the HR function's effectiveness, with the inevitable consequence that it is in the HR manager's interest to ensure that it is managed effectively. Our recent research into HR departments' roles and responsibilities showed that turnover is now the most common way in which HR's effectiveness is gauged3.

An in-depth analysis of this research shows that labour turnover is more likely to be used as a measure of HR's effectiveness where the HR department has certain positive attributes, such as:

  • a documented strategy;
  • a greater proportion of its staff with CIPD qualifications;
  • its own budget;
  • representation at a senior level (such as on the main board); and
  • a high perceived level of effectiveness.

Hole in the wall

Interestingly, though, while many HR departments collate data on labour turnover, it seems that not all of them - probably only a minority - translate the figures into hard cash. Were more to do so, the results might give pause for thought.

For example, the latest CIPD recruitment survey, cited above, finds that it costs an average of £3,950 to recruit a new member of staff (see table 1), rising to £4,625 a head when the additional costs associated with leavers are included. Even so, the latter figure could well be an underestimate, in that it does not take into account the lost experience and skills, lower productivity and the difficult transition period when someone leaves and is replaced. Sales could be lower, there could be a reduction in customer care, productivity and output might be hit, and so on.

The CIPD findings also show that the financial impact of labour turnover varies considerably with the individual concerned. A senior manager, for example, will cost 10 times more to replace than a manual or craft worker, based on simple recruitment costs. However, as we shall see in part 2 of this guide in our next issue, labour turnover rates among senior managers and directors tend to be among the lowest of any group. So, what an organisation gains in lower turnover costs per capita in respect of its lower-graded staff, it loses in the higher numbers involved.

Real-life examples

Relating the costs to real-life employers might help to give these figures some meaning. For example, the Compass Group is a major provider of workplace vending and catering facilities, and has a worldwide workforce of some 400,000 people, according to a profile in Personnel Today4. As part of the business case to improve its employer brand, the company calculated that just "a 1% reduction in the annual staff turnover of 40% would save £16 million."

Hospitality and catering businesses, such as Compass, operate in a notoriously high labour turnover climate, and have a strong incentive to quantify and manage their staff wastage. At the Mandarin Oriental Hyde Park hotel in London, a drive to reduce a 60% turnover rate has cut it to 12% in food and beverages and 15% in its kitchens, according to Caterer and Hotelkeeper magazine5, saving an estimated £250,000 a year from the cost of induction and training for replacement members of staff.

The same Personnel Today article that profiled the Compass Group (cited above) also highlights the success of Getty Images, a supplier of photographic and film images, in achieving cost savings through improved retention. To enhance its employer brand, it consulted its staff and senior managers, and developed a range of interlocking initiatives to address the issues raised by their feedback. These included improved communications and recognition processes, a new leadership development programme and an "overhauled" reward system. The changes have helped to reduce its labour turnover by more than one-third (37%), saving £500,000 a year.

The call centre industry shares a reputation with hospitality as a high-turnover sector. In our recent study of recruitment and retention in call centres, we profiled the Glasgow call centre of the Student Loans Company, the organisation providing government-subsidised loans to higher education students.

The company's exacting staffing requirements mean that recruits take around one year to be fully effective, with the result that it has attached a price tag of almost £5,000 to the cost of labour turnover in respect of each of its leavers. Its efforts to reduce staff attrition have focused on improving the quality of selection decisions. It identified the key competencies for call centre roles through an in-depth research project, and then built these into a redesigned application form. These changes have helped to reduce labour turnover from 40% to 25% a year6.

In the less turbulent world of financial services, the Genome project of the Nationwide Building Society is becoming well known. In our latest report of the project, in November 20057, we noted that its analysis of the links between employee commitment and organisational effectiveness has quantified the financial impact of staff retention. John Lenihan, personnel consultant, data modelling, told us that increasing the average length of service by one year across the organisation would raise the value derived from its mortgage sales by £5.6 million.

Doing the sums

The calculation of the costs associated with labour turnover depends on some fundamental administrative systems being in place to ensure that turnover rates and recruitment activities are monitored. In our experience, many organisations have not yet reached this point.

Once such systems are in operation, the HR department can identify the number of leavers and the cost per head to recruit a member of staff and, linking the two, produce a rough estimate of the financial impact of labour turnover.

The potential to refine these calculations is almost endless. Labour turnover does not necessarily lead to a recruitment need - a post may be abolished or restructured, for example - so the cost could be linked to instances of turnover where recruitment is involved. Turnover will also vary by such factors as job/role, grade and location, and it may be more or less expensive to replace a leaver accordingly.

Turnover costs can also be refined by going beyond the simple calculation of recruitment expenditure, and take into account any use of temporary staff or overtime payments for existing members of staff to cover for a vacancy while it is being filled, and the costs of inducting and training the leaver's replacement. It is much more difficult, however, to quantify the impact of turnover in terms of reduced productivity, lost sales, and similar factors. It will be easiest to do so where the role is already covered by a framework of targets and measurements that lend themselves to this purpose, such as much call centre work or sales activities.

To sum up, the costs of labour turnover could potentially encompass the following major cost heads:

The cost of replacing the leaver

  • recruitment advertising;
  • agency fees;
  • search and selection fees;
  • fees paid to test providers for any psychometric tests;
  • the costs of other recruitment and selection methods;
  • selectors' time in shortlisting, interviewing and appointing replacements;
  • induction costs; and
  • training costs for the replacement member of staff.

Transition costs

  • agency staff to cover for the vacant post; and/or
  • overtime payments to existing staff to provide cover.

(both while the leaver is being replaced and afterwards, when their replacement is getting experienced in the role)

  • lost sales;
  • reduced output or productivity in general; and
  • reduced customer-care levels.

As well as global figures, these costs could be broken down by the major categories of most significance to the organisation concerned, such as grade (management, support staff, frontline staff, etc); role (sales, back office, etc); and location.

Measuring labour turnover rates

A couple of years ago, we obtained feedback from 102 employers about the ways in which they benchmark their labour turnover rates. Our findings were reported in full in Measuring and managing labour turnover: part 1. This research found that personnel and HR staff have the prime responsibility for measuring labour turnover, and that they often do so in a detailed way. The records they keep cover not only resignations, but, in the majority of cases, also departures caused by dismissal, retirement, ill-health retirement and death in service.

For the majority of employers, data on leavers are accompanied by details of their department, length of service and type of job. However, fewer than three in 10 employers also include details of gender, location, age, full- or part-time status, salary, ethnicity or whether they have a disability.

The data broken down by details such as these are rarely exploited to the full, unfortunately. One in three employers that track labour turnover do not analyse their data according to any of these factors. That is, they rely on headline results for "crude wastage" (turnover of all types, lumped together) across the organisation as a whole. The remaining two in three employers undertake some analyses by some of the factors listed in the previous two paragraphs, but few organisations (only one in four) cross-tabulate the results by all of the factors concerned.

Taken together, these findings imply that few organisations will be able to use their labour turnover data at the level of detail required to help them identify potential retention problem areas with any accuracy.

Crude wastage

The most basic form of labour turnover calculation is known as the "crude wastage" rate, and does not distinguish the reasons why individuals leave the organisation.

It is computed by taking the number of all types of leavers in a specified period (usually 12 months), and expressing it as a percentage of the number of people employed during that period (this is usually based on the average of the number employed at the beginning of the period and those employed at its close).

In general, voluntary resignations make up by far the largest proportion of leavers. For example, in our recent study of employers' arrangements for managing employee departures, we found that more than two-thirds (68.8%) of separations involve employee-instigated resignations8. And, for most HR managers, it is the voluntary separations that interest them. Not only do they represent the single largest loss of staff each year, but they are also often the least predictable (in contrast to normal retirements or redundancy exercises) and are, therefore, potentially the most damaging form of staff attrition to organisational activities.

Many sources of labour turnover data rely on crude wastage, as our accompanying directory of labour turnover sources indicates. These include the national survey conducted each year by the CBI, the recent EEF survey of smaller manufacturing firms, the Skills in Scotland survey, and some of the data in the CIPD's survey. In all, just over half of all the sources in our directory do not provide analyses of labour turnover by resignation rates.

The lack of precise turnover data poses two problems for would-be benchmarkers. First, it is important to compare like with like. So, surveys should explain the basis on which their rates have been calculated; many do not. And the findings of those that do provide such details should be compared with data in the organisation of a similar nature: crude wastage with crude wastage, or resignation rates with resignation rates, for example.

Second, crude wastage rates do not include a fixed and predictable proportion of resignations; they can vary significantly. If an employer is primarily interested in measuring and managing voluntary separations, then it can be difficult to guess the underlying resignation rate within an external source's crude wastage figure.

For example, the Remuneration Economics and Computer Economics series of salary surveys (details are in the accompanying directory) provide careful breakdowns of turnover by leavers' destinations. They show that resignations make up just under one half of crude wastage among managers, at one extreme, but account for more than 80% of leavers in its survey of actuaries and actuarial students. The company's other surveys fall between these two poles.

Frankly, the crude-wastage turnover rate is of little use as a measurement method. Some of the survey compilers have told us that their use of it is simply a pragmatic response to the fact that many employers are unable to provide more precise statistics.

Voluntary turnover rate

The calculation of the resignation rate of labour turnover involves much the same process as crude wastage: the number of leavers for voluntary reasons in a specified period (usually 12 months), expressed as a percentage of the average number employed during that period.

Even if an organisation's record-keeping is not sophisticated enough to provide resignation figures, it may be possible to reach an approximation of them. Statistics can usually be obtained for many of the major exceptions to voluntary turnover - such as redundancies, dismissals and retirements - because the figures have to be kept for legal or financial reasons. Their total can then be deducted from the overall number of leavers to produce a fair estimate of voluntary turnover.

However, even the resignation rate is rarely adequate as a diagnostic tool when produced for the organisation as a whole, because it will gloss over any crucial differences between departments, business units, sites, occupational groups and other key variables. For example, a voluntary resignation rate of 5% for an organisation might conceivably include rates that range from 0% for senior managers to 20% for sales staff. The overall rate suggests that no action is required, while a more detailed analysis would reveal that there are serious problems in retaining the organisation's main source of revenue.

It may also be worth taking into account the typical patterns of turnover's peaks and troughs prevalent among employers in general. According to the Office for National Statistics' Labour Force Survey, it is highest among new recruits - stabilising after two years' service - among younger staff, and among those in semi- and unskilled clerical and manual work (as well as among some skilled occupations where skills shortages exist).

Some examples of employer practice include: transport operator the Go-Ahead Group measures labour turnover by region (source: Annual review for the year ended 2 July 2005); medical-devices company Smith & Nephew's labour turnover figures include an analysis of resignations among employees with less than two years' service (source: 2004 summary financial statement); supermarket chain Asda focuses even more closely on the problem of high turnover among new recruits by compiling staff turnover rates for those with less than six months' service9; and fast-food firm McDonald's narrows this to turnover within the first 90 days after appointment10, and also computes the average length of service of its branch managers.

Other indices

As well as analysing resignation rates by such factors as service, grade and age, some employers calculate a stability index, which shows the extent to which the turbulence caused by labour turnover permeates their workforce.

For example, even in the hospitality industry, where high turnover rates are prevalent, some employers have found that the same posts have a succession of recruits and leavers during the course of a year, while much of the workforce is unaffected. This can provide useful information when plans are being drawn up to manage retention, and the areas where action is most needed.

A stability index is calculated by expressing the number of employees who have a specified length of service (one year, two years, etc) as a percentage of the workforce, or relevant work group, as a whole. (As with the resignation rate, this can be broken down by department, grade and so on.)

A related method of computing turnover uses a survival rate. This is useful in focusing on the effectiveness of the recruitment, training and management of particular groups of staff - often, new graduates. Alternatively, it can be a means of gauging the impact of a change in recruitment and selection practices on retention rates, comparing survival rates before and after the modification.

The survival-rate calculation involves expressing the number of people who are still employed at a certain date as a percentage of those who were recruited in a particular year (for example, 75% of those recruited in 2000 were still employed by the end of 2005).

Finally, resignation rates can be calculated according to the destination of leavers. This is a method that is much favoured in parts of the public sector, where turnover rates are often broken down into those moving within the same area (within maintained schools, or the NHS, for example) and those going elsewhere.

Some worked examples of labour turnover calculations can be found in the Acas advisory booklet Absence and labour turnover (free from www.acas.gov.uk).

Benchmarking labour turnover

Note: further details of the sources mentioned below, and details of others not mentioned in the text, can be found in the directory at the end of this article.

Many organisations find it useful to compare their labour turnover rates using external yardsticks, such as the rates of direct competitors, the going rate in their industry or the overall national average. In our research study two years ago, cited above, we found that just over four in 10 employers that collate turnover rates also benchmark them externally. They told us that the main ways in which they do so involve using published sources of labour turnover data, personal contacts and informal networks.

Benchmarking is used in several different ways by organisations. HR managers often use external turnover indices to provide additional information to help them judge whether their own rates are acceptable or require action. Should the benchmarks show that their rates are too high relative to others, then this information is also used in their business case to win support, and resources, for the implementation of retention-related initiatives.

Increasingly, in our view, benchmarks are also being used for PR purposes in organisations' annual reports, corporate social responsibility reports and other communications. Their own attrition rate is quoted and, where relevant, compared favourably with a chosen external comparator.

While benchmarking is often considered to be purely an external process, labour turnover in particular lends itself to internal comparisons as well - between business units, departments and work groups and, probably more importantly, over time.

All forms of benchmarking should be based on issues that are relevant to the organisation - specifically, the particular calculation method to compute labour turnover and the choice of comparators.

Typically, the benchmarking process is one of extremes; comparisons are made against a large data-set of statistics, or against just a few, carefully chosen, comparators. The published sources of labour turnover data lend themselves to the former approach, particularly where they are based on relatively large sets of statistics, while informal methods - such as benchmarking clubs, employers' networks and direct approaches - are more suited to the latter method.

Clubs and networks

There are several organisations offering benchmarking services to employers, most of which use labour turnover as one of the indices measured. The operation and use of such services have been greatly aided by the advent of the internet and email. Many of these benchmarking services have a strong presence on the web, and are set up for members to provide benchmarking data online, conduct online searches of databases and make contact with other members via email.

Some of the services provide large sets of statistics, often customised to a limited extent by sector, occupation or size, but most provide the more in-depth, bespoke type of service. Many offer several tiers of membership, based on the amount of support provided by the benchmarking agency. At their most intensive, some will provide full consultancy services where benchmarking is simply the initial phase of a tailored solution to an organisation's retention and other problems.

Published sources

Benchmarking data on labour turnover that are available in a published format fall into four main groups: national surveys; occupational surveys; industry surveys; and individual employers.

National surveys provide good headline results, but they have three main drawbacks. First, many of them only provide crude-wastage figures, as we noted above. Second, none of them uses a matched sample of employers. This means that trends from year to year cannot be reliably plotted. And third, they rarely have sufficiently large numbers of participants to enable the computation of turnover rates at high levels of detail, such as rates for specific industries.

Occupational surveys (see also part two of our guide in the next issue) cover one or more related occupations; often, the labour turnover data are included in a salary survey of pay and conditions. Provided they are carefully conducted and analysed, these publications often provide the best source of published data on specific jobs - coverage is incomplete, however, and such sources are often expensive.

Industry surveys cover one or more industries or a whole business sector. These are often conducted by membership organisations for the industry concerned, such as employers' associations, professional bodies and some Sector Skills Councils. These surveys do not always provide as much detail as the occupational ones, and may not be conducted as frequently as the annual cycle of many national and occupational surveys.

Unfortunately, the People Skills Scoreboard surveys, which used to be a valuable source of industries' turnover rates, have been discontinued by most of their sponsors, while some of the survivors are being conducted less frequently than before.

Individual employers are increasingly disclosing their labour turnover rates, either through their own publications - such as annual reports and accounts, and special corporate social responsibility reports - or in media coverage and other publications. IRS's own journals and our company's XpertHR online service are a good source of such information.

In addition, a search through the online archives of Personnel Today (also included in XpertHR) and People Management as part of the research for this guide revealed several articles and news items that include information about particular organisations' labour turnover rates. Other HR publications and the trade press for the industry concerned are also sources of this information, as are the occasional items that appear in national, regional and local newspapers. The Sunday Times 100 Best Companies to Work For annual awards also includes labour turnover data for each of its 100 winning employers in the employer profiles it publishes.

Investigating labour turnover

A worryingly high labour turnover rate can be likened to a distress flare. It sends a signal that something is wrong, but does little more than that. Search parties will then need to be assembled to seek out who set off the flare and why they did so. With employee attrition, HR will need to investigate the reasons for the unacceptably high levels of staff losses and use the information to develop solutions.

Just as with someone in distress, there will be an immediate reason for their predicament, but there may also be an underlying or long-term cause that should also be addressed.

With labour turnover, investigative methods such as exit interviews and leavers' surveys deal with the problem as it stands, while longer-term measures, such as attitude surveys among the workforce as a whole, could help prevent turnover becoming a problem in the future.

It is important to obtain fairly objective and reliable information about the causes of turnover, because the time, money and effort required to develop and implement solutions to address them should be put to best use. Objectivity and reliability are particularly important because there are many misconceptions about the reasons for employees' departure.

In almost every survey that asks managers and employers - rather than the employees themselves - about the reasons for staff attrition, pay and promotion feature prominently as being perceived as the major causes of resignations. In high-turnover, lower-paying sectors, such as hospitality and retail, these explanations certainly hold some truth. But this is far less the case elsewhere.

In fact, surveys of employees themselves reveal that "push" factors - the quality of line management, lack of training or career opportunities, and working arrangements such as inflexible hours - tend to be more important reasons for leaving than "pull" factors, such as higher pay, promotion or the allure of fresh surroundings.

Even employee-centred techniques such as exit interviews are not immune from bias, however. In particular, individuals may not want to give negative feedback about their current employer, especially regarding troubled relationships with managers and other staff, in case this might affect the provision and content of references supplied to their new, or subsequent, employer.

Exit interviews and leavers' surveys ("separation questionnaires") tend to be attributed - the source of the information is named - and to be managed by internal personnel. Contrast this approach with that usually taken by employers' attitude surveys of their workforces, where the surveys are anonymous and are often managed externally by an independent agency, accompanied by a code of good practice about confidentiality.

At present, three times as many organisations use exit interviews as employ a confidential, anonymous alternative, such as their employee attitude survey or a non-attributable exit survey (90%, 30% and 24%, respectively), according to the CIPD's recruitment, retention and turnover survey.

As an example of the challenges involved in getting to the real reasons for leaving, Krystal Wilkinson and Stephen Taylor told the June 2005 CIPD Professional Standards Conference about confidential research with 50 NHS nursing staff who had resigned voluntarily from an NHS trust. Each of the leavers had taken part in the trust's exit interview process, and were later contacted by the researcher and asked several of the same exit questions.

Of the reasons for leaving originally given at exit interview, two-thirds were altered by the nurses when interviewed later. Significantly, almost 90% of the reasons changed from "pull" to "push" factors, while none changed in the other direction11.

  • More information on exit interviews, separation questionnaires and attitude surveys can be found in "Tackling the retention challenge" in IRS Employment Review 750, pp.35-40, and Don't leave us this way in IRS Employment Review 757.

1 Recruitment and retention: yesterday, today and tomorrow, IRS Employment Review 825.

2 Recruitment, retention and turnover, Chartered Institute of Personnel Development, 2005, www.cipd.co.uk.

3 Roles and responsibilities 2006: benchmarking the HR function, IRS Employment Review 839.

4 "Capgemini Award for Excellence in Employer Branding", Personnel Today, 9 August 2005.

5 "Better training is vital", Caterer and Hotelkeeper, 3 November 2005.

6 Recruitment and retention in call and contact centres, IRS Employment Review 839.

7 Banking on performance in the financial services sector, IRS Employment Review 835.

8 Fond farewells? How employers deal with employee departures, IRS Employment Review 836.

9 "Hays Human Resources Award for Innovation in Recruitment and Retention", Personnel Today, 27 September 2005.

10 HR challenges ... I'm lovin' it , Personnel Today, 6 September 2005.

11 "Are exit interviews of any value - do leavers really tell the truth?", Krystal Wilkinson and Stephen Taylor, People Management, 29 September 2005.

Note: The mention or omission of a particular product or service does not imply an endorsement or criticism. Other products and services are available.

Table 1: The costs of labour turnover

Few organisations were able to give the CIPD estimates of the broader costs associated with replacing a leaver, so this table also shows its larger-scale findings about recruitment costs.

OCCUPATIONAL GROUP COSTS OF RECRUITMENT COSTS OF LABOUR TURNOVER
Senior managers/directors £10,000 £8,000
Managers/professionals £5,000 £5,000
Administrative, secretarial and technical £2,000 £3,500
Services (customer, personal, protective and sales) £1,745 £3,000
Manual/craft workers £1,000 £4,000
All employees £3,950 £4,625
n = 240 14

Median costs per head in 2004.
Source: "Recruitment, retention and turnover", Chartered Institute of Personnel and Development, 2005, www.cipd.co.uk.

Box 1: T-Mobile's take on turnover

Mobile communications company T-Mobile takes a keen interest in staff retention, and sees it as an integral part of its overall resourcing strategy. The company carefully monitors staff turnover and retention rates, and has implemented a consistent measurement framework. This includes the regular dissemination of a range of management reports, such as monthly "flash" reports to departments as well as more in-depth analyses. Different metrics are used to produce statistical overviews, such as breakdowns by voluntary and involuntary leavers, and by department and business area, and the use of stability indices. Those employees who leave early on in their employment - referred to collectively as "premature attrition" - are also monitored as a distinct category. Qualitative data is collected on the reasons why people move on, for example by analysing the results of online exit interviews.

However, identifying why people stay with T-Mobile rather than focusing solely on why they leave is seen as equally important. The company has done extensive work in this area. It is now a strategic imperative that employee engagement levels across the business must be increased. T-Mobile is taking a holistic approach, believing that there is no universal solution. It includes consideration of a raft of organisational factors at a strategic level, including leadership, people management and culture, as well as more concrete practices and policies such as flexible working.

See Leading-edge resourcing at T-Mobile for more.

Table 2: Directory of labour turnover sources, 2006/07

General
Source: "Recruitment, retention and turnover", CIPD, 2005, available free, tel: 020 8612 6200, www.cipd.co.uk.
Scope: Public and private sectors in UK, covering most sectors
Technical details: Annual survey. Rates are analysed by industry (crude wastage and resignations) and occupation. Analyses labour turnover costs by job. Also contains other survey findings about labour turnover.
Latest info: June 2005, relating to 2004 calendar year (303 employers).
Main findings: Resignation rate in UK in 2004 was 9.7%.
Source: "Who cares wins: absence and labour turnover, 2005", CBI with AXA, 2005, from CBI Publications, tel: 020 7379 7400, www.cbi.org.uk, price £75.
Scope: Public and private sectors in UK, covering most sectors
Technical details: Annual survey. Analyses crude wastage by industry, region and workforce size. Plus trends over time, and employers' satisfaction with their turnover levels.
Latest info: May 2005, relating to 2004 calendar year (528 employers).
Main findings: Overall rate is unaltered for third year at 15.7%.
Source: "Labour Force Survey", Labour Market Statistics Helpline, tel: 020 7533 6094, basic queries are free, complex surveys are charged for.
Scope: Individuals in UK aged 16+
Technical details: Quarterly, nationally representative sample of people aged 16 and over living in private households. Spring survey includes data on labour turnover (employees not with same employer as a year ago). Each quarter's survey has data on length of time with current employer (tenure), reasons why employees left previous job in past three months and the proportion wishing to leave current job - and the reasons why. All of these findings can be cross-tabulated by sex, age, occupation, etc (sample sizes permitting). No published labour turnover data, apart from irregular coverage in Labour Market Trends magazine1 and annual Social Trends compilation (both free from www.statistics.gov.uk). Other findings must be obtained from helpline, databases or bureau services.
Latest info: Representative sample of 60,000 households.
Main findings: At June 2004, 44% of employees had been in their jobs for at least five years.
Source: "The Sunday Times 100 best companies to work for", Sunday Times, 2005, free from www.business.timesonline.co.uk.
Scope: 100 UK employers
Technical details: The profiles of the top 100 companies give overall labour turnover rates for "leavers" (not defined).
Latest info: Year to September 2004 (100 employers).
Main findings: "Leaver" rates range from 3% (Lindum Group) to 78% (Ann Summers).
Source: "Absence and labour turnover survey", EEF, 2005, free from www.eef.org.uk.
Scope: England, Wales and NI
Technical details: Covers members of EEF: mainly smaller firms, mainly in engineering and manufacturing sectors. Crude wastage analysed by workforce size, sector and manual/non-manual.
Latest info: November 2005, covering 2004 calendar year (701 employers).
Main findings: Crude wastage rates of 14.8% (manuals), 11.1% (non-manuals) and 13.6% overall.
Source: "Skills in Scotland", Futureskills Scotland, free from www.futureskillsscotland.org.uk.
Scope: Scotland
Technical details: Third of the series of "Scottish employers' skills survey", analysing crude wastage by workforce size and industry.
Latest info: January 2005, relating to year to 2004 (7,507 workplaces).
Main findings: Crude wastage rate of 24%.
Source: "The benchmark index", Department of Trade and Industry, information from nearest Business Link, or tel: 08700 111 143, www.benchmarkindex.com.
Scope: Benchmarking service
Technical details: Publicly sponsored benchmarking service for small- and medium-sized enterprises. Its metrics include total crude wastage and leavers within six months of recruitment.
Latest info: -
Main findings: -
Source: "HR benchmarker", DLA Piper Rudnick Gray Cary, tel: 0161 235 4545, www.hrbenchmarker.com, by annual subscription.
Scope: Benchmarking service
Technical details: Joint benchmarking venture between DLA Piper Rudnick Gray Cary and Personnel Today magazine. Data collection includes labour turnover; findings are made available through annual "Workforce performance indicators report" (£395 pa plus VAT) and other services. Some labour turnover findings are published irregularly in Personnel Today.
Latest info: -
Main findings: Labour turnover rates of 15% (all employers), 13.1% (private sector firms with up to 1,000 employees) and 20.4% (more than 1,000 employees). Source: Personnel Today, p.42, 26.4.05.
Source: "The HR index system", EP-First & Saratoga Institute, tel: 01491 411949, www.ep-first.com.
Scope: Benchmarking service
Technical details: Worldwide benchmarking database service that includes labour turnover data. Benchmarking available by industry, size, growth rate, region and tailored samples. "Human capital effectiveness report" is also available.
Latest info: -
Main findings: -
Source: The Benchmarking Centre Ltd, tel: 01494 558062, www.benchmarking.co.uk.
Scope: Benchmarking service
Technical details: Brokerage service, arranging benchmarking partnerships between employers, and providing training in benchmarking methods.
Latest info: -
Main findings: -
Source: The Benchmarking Exchange, www.benchmarking.org.
Scope: Benchmarking service: USA and other countries
Technical details: Internet and email-based benchmarking service.
Latest info: -
Main findings: -
Source: APQC International Benchmarking Clearinghouse, www.apqc.org.
Scope: Benchmarking service: USA and other countries
Technical details: Brokerage service, arranging benchmarking partnerships between employers.
Latest info: -
Main findings: -
Source: Best Practice Club, tel: 01306 646555, www.bpclub.com.
Scope: Benchmarking service: UK and other countries
Technical details: Brokerage service that facilitates benchmarking between members.
Latest info: -
Main findings: -
Occupations and industries
Source: "Salary survey of actuaries and actuarial students", REL2, with the Actuarial Profession, price £830 (non-participants), £490 (participants).
Scope: Actuaries
Technical details: Annual survey. Results analysed by reason for leaving, level, region, qualifications and age, plus trends over time.
Latest info: October 2005, relating to year to September 2005 (35 organisations).
Main findings: Overall resignation rate has risen from 3.2% to 10.8%.
Source: "Call centres 2005/06: benchmarking pay data and effective HR practices", IRS Research and the CCA, LexisNexis, 2005, tel: 020 8652 2244, enquire for prices.
Scope: Call centre staff
Technical details: Crude wastage and resignation rates analysed by broad sector and workforce size. Also provides data on trends in labour turnover, and ways in which call centres investigate and manage labour turnover.
Latest info: 2005, relating to 2004 calendar year (97 employers).
Main findings: Median resignation rates of 6.5% (public sector), 15.0% (private sector) and 12.0% overall.
Source: "Merchants global contact centre benchmarking report", 2005, tel: 01908 681600, www.merchants.co.uk, price £950.
Scope: Call centre staff
Technical details: Regular survey. Covers range of benchmarking data, including labour turnover.
Latest info: (166 contact centres in 24 countries).
Main findings: -
Source: "Pre-school and childcare workforce statistics", Scottish Executive, free from www.scotland.gov.uk.
Scope: Childcare staff
Technical details: Annual survey, covering staff working in nurseries, day-care centres, play-groups, etc. Crude wastage analysed by role, ownership of centre and location. Also analyses turnover by destination.
Latest info: February 2005, relating to year to September 2004 (377 centres).
Main findings: Overall crude wastage rate of 19%, within a range of 12% to 57%.
Source: "Civil service statistics", Cabinet Office, available only from www.civil-service.gov.uk.
Scope: Civil servants
Technical details: Annual statistics, based on complete count of one of UK's largest workforces. Latest published data give raw numbers for crude wastage by grade, department, gender, ethnicity, age and disability.
Latest info: Relates to year to 31 March 2004 (total count of employees).
Main findings: -
Source: Review Body on Senior Salaries, reports free from Office of Manpower Economics, www.ome.uk.com.
Scope: Civil servants
Technical details: The annual report from the Review Body includes labour turnover data for the Senior Civil Service, analysed by destination.
Latest info: February 2005, relating to 2003/04.
Main findings: Resignation rate of approx. 2.4%.
Source: "Public sector benchmarking service" (PSBS), Cabinet Office and HM Revenue and Customs, www.benchmarking.gov.uk.
Scope: Civil servants
Technical details: Benchmarking brokerage arranging benchmarking projects between central government departments and agencies, and other public and private sector employers in UK and elsewhere. Also undertakes research on behalf of members, provides information, advice and networking.
Latest info: -
Main findings: -
Source: "Computer staff salary survey: volume 1 - management", REL2 (as Computer Economics), available to participants only by annual subscription: prices on request.
Scope: Computer/IT specialists
Technical details: Twice-yearly survey. Turnover (given as annual rates) analysed by reasons for leaving, job level, region, job type, size of IT department, sector, age and gender.
Latest info: November 2005, covers 12 months to October 2005 (computer staff in 546 installations).
Main findings: Resignations have fallen from 7.1% to 5.6%.
Source: "Benchmark of salaries and employment trends in IT", National Computing Centre (NCC), available from NCC, tel: 0161 242 2121, www.ncc.co.uk, price £330 (£220 NCC members; £110 non-member participants; free to participating members).
Scope: Computer/IT specialists
Technical details: Annual salary survey. Labour turnover (crude wastage) analysed by job, department size, region and industry.
Latest info: December 2005 (383 employers), covering year to 1 July 2005.
Main findings: Crude wastage for all systems and support staff has risen from 9.4%. to 12%.
Source: "AoC survey of staff recruitment and shortages", Association of Colleges, www.aoc.co.uk.
Scope: Education: Further education staff
Technical details: 2005 survey had recently been undertaken at our research's closing date.
Latest info: -
Main findings: -
Source: "Survey of teacher resignations and recruitment", Employers' Organisation for local government, 2005, tel: 020 7296 6781,
www.lg-employers.gov.uk.
Scope: Education: Schoolteachers
Technical details: Annual survey. Covers resignations of full-time permanent teachers in LEA schools, analysed by gender, destination, main subjects taught, age, salary and primary/secondary school.
Latest info: June 2005, relating to 2004 calendar year.
Main findings: Resignation rates (provisional figures) of 10.2% (primary schools), 11.4% (secondaries) and 10.8% (overall).
Source: "Teacher turnover, wastage and movements between schools", Alan Smithers and Pamela Robinson, Department for Education and Skills, 2005, RR640, free from www.dfes.gov.uk.
Scope: Education: Schoolteachers
Technical details: Latest in a series of irregular research studies commissioned by DfES into schoolteachers' turnover in England. In-depth 111-page analysis of labour turnover based on surveys of schools and leavers. Covers both crude wastage and moves between state schools.
Latest info: 2005, relating to 2004 (1,229 schools).
Main findings: Turnover, excluding moves to other state schools, has risen from 9.2% to 10.0% in primary schools, but is unaltered at 7.2% in secondaries.
Source: "Report of the Soulbury workforce survey, 2004", Employers' Organisation for local government, 2005, tel: 020 7296 6600, free from www.lg-employers.gov.uk.
Scope: Education: Soulbury groups
Technical details: Covers educational advisers/inspectors, educational psychologists, and youth and community service officers in England and Wales. Irregular survey. Crude wastage rates analysed by occupational group, region and type of LEA. Also gives destinations of leavers.
Latest info: October 2004, relating to year to 1 April 2004 (99 LEAs).
Main findings: Crude wastage rates of 11.7% (advisers/inspectors), 10.7% (psychologists), and 6.4% (youth officers).
Source: "Salary survey of engineers", REL2, price £500 (non-participants), £320 (participants).
Scope: Engineers and engineering crafts people
Technical details: Annual survey. Results analysed by reason for leaving, industry, responsibility level, qualification, function, region and age. Plus trends over time.
Latest info: November 2005, relating to year to 1 September 2005 (51 employers).
Main findings: Overall resignation rate has fallen again, down from 2% to 1.9%.
Source: "People Skills Scoreboard for the engineering industry", SEMTA, www.peopleskillsscoreboard.com.
Scope: Engineering companies' workforces
Technical details: Survey in "People Skills Scoreboard" series. Annual frequency has been replaced by 18-month cycle. Crude wastage rate shown for each named employer plus analyses by sub-sector. Rate relates to latest accounting year in each firm, ending between 31 December 2001 and 31 March 2003.
Latest info: 2004, relating to: see previous column (867 employers).
Main findings: Crude wastage has risen from 6.9% to 9.8%.
Source: "Salary survey of financial staff", REL2, price £500 (non-participants), £310 (participants).
Scope: Financial and accountancy specialists
Technical details: Annual survey. Results analysed by reason for leaving, responsibility level, region, broad sector, function, age and gender, plus trends over time.
Latest info: November 2005, relating to year to 1 September 2005 (87 employers).
Main findings: Resignation rate has risen from 3.4% to 4.2%.
Source: "The financial services salary survey", REL2, price £2,000 (non-participants), £900 (participants).
Scope: Financial services
Technical details: Annual survey covering leasing finance, motor finance, contract hire, personal finance and factoring activities. Results analysed by matrix of reason for leaving and responsibility level (asset finance only).
Latest info: October 2005, relating to year to 1 July 2005 (30 employers).
Main findings: Resignation rate has fallen from 8.3% to 7.5%.
Source: NHSScotland workforce statistics, online only at: www.isdscotland.org/workforce.
Scope: Healthcare staff: Scotland
Technical details: Newly introduced labour turnover data on NHSScotland's workforce web pages, analysing crude wastage and stability indices by staff groups and regions/boards.
Latest info: January 2006, relating to year to 30 September 2005.
Main findings: Overall crude wastage rate of 7.4%.
Source: "Workforce survey results for nursing staff, midwives and health visitors", Office of Manpower Economics, free from www.ome.uk.com.
Scope: Healthcare staff
Technical details: Annual survey. Analyses turnover in NHS in England and Wales (crude wastage and wastage excluding transfers within NHS) by destination, country/region and occupation; provides matched samples for changes since previous year.
Latest info: Relates to year to 31 March 2004 (258 employers).
Main findings: Rate for leavers excluding NHS transfers rose from 9.7% to 10.1%.
Source: "Workforce survey results for professions allied to medicine", Office of Manpower Economics, free from www.ome.uk.com.
Scope: Healthcare staff
Technical details: Annual survey. Analyses turnover in NHS in England and Wales (crude wastage and wastage excluding transfers within NHS) by destination, country/region, occupation and grade; provides matched samples for changes since previous year.
Latest info: Relates to year to 31 March 2004 (258 employers).
Main findings: Rate for leavers excluding NHS transfers fell from 12.5% to 11.4%.
Source: "Workforce survey results for other scientific, technical and therapeutic staff", Office of Manpower Economics, free from www.ome.uk.com.
Scope: Healthcare staff
Technical details: Annual survey. Analyses turnover in NHS in England and Wales (crude wastage and wastage excluding transfers within NHS) by destination, country/region, occupation and grade.
Latest info: Relates to year to 31 March 2004 (258 employers).
Main findings: Overall rate for leavers excluding NHS transfers is 10.4%.
Source: "Sickness absence and staff turnover", NHS Partners, 2005, tel: 01275 395463, full report free to participating full members, executive summary free from www.nhsp.org.uk.
Scope: Healthcare staff
Technical details: Annual survey, covering NHS in Great Britain. Crude wastage rates analysed by type of NHS organisation, occupational group and region, plus trends over time. Reasons for leaving and employers' measures to reduce labour turnover are also given. NHS Partners also offers bespoke benchmarking and other services.
Latest info: August 2005, relating to year to 31 March 2005 (137 employers).
Main findings: Crude wastage in NHS has risen from 13.2% to 14.2%.
Source: "Skill needs analysis report", People 1st, www.people1st.co.uk.
Scope: Hospitality sector
Technical details: One-off study of the hospitality, leisure, travel and tourism sector by its Sector Skills Council, including rates and costs of labour turnover3.
Latest info: December 2005 (2,000 employers).
Main findings: Overall rate of 30%3.
Source: "Legal workforce survey", Employers' Organisation for local government, tel: 020 7296 6781, www.lg-employers.gov.uk.
Scope: Legal staff
Technical details: Analyses crude wastage and destinations of leavers of local authority's legal staff in England and Wales. Results are currently being analysed.
Latest info: Not yet available; will cover year to 31 March 2005.
Main findings: -
Source: "Library workforce survey", Employers' Organisation for local government, tel: 020 7296 6781, www.lg-employers.gov.uk.
Scope: Library staff
Technical details: Analyses crude wastage and destinations of leavers of local authority library staff in England and Wales. Results are currently being analysed.
Latest info: Not yet available; will cover year to 31 March 2005.
Main findings: -
Source: "People Skills Scoreboard", Employers' Organisation for local government, tel: 020 7296 6600, free from www.lg-employers.gov.uk.
Scope: Local authorities' staff (see also specific groups)
Technical details: Annual survey covering local government in England, Wales and Scotland, but excluding police and fire authorities. Crude wastage analysed by type of authority, country (time series) and English region.
Latest info: 2006, covering 2004/05 financial year.
Main findings: Crude wastage in England and Wales has risen from 13.4% to 14.5% (provisional figure).
Source: "National management salary survey", REL2 with the Chartered Management Institute, price £700 (non-participants), £360 (participants).
Scope: Managers and directors: all companies
Technical details: Annual survey. Results analysed by reason for leaving, responsibility level, age, industry and function, plus trends over time.
Latest info: April 2005, with data for year to 1 January 2005 (212 employers).
Main findings: Managers' resignations have fallen from 4.6% to 3.0%, while directors' rate is down from 4.6% to 2.7%.
Source: "National management salary survey: smaller business review", REL2 with the Chartered Management Institute, price £350 (non-participants), £200 (participants).
Scope: Managers and directors: small/ medium enterprises
Technical details: Annual survey of businesses drawn from main management survey (see entry above) that have an annual sales turnover below £60m. Results analysed by reason for leaving, responsibility level, age, region, industry and function, plus trends over time.
Latest info: May 2005, with data for year to 1 January 2005 (59 employers).
Main findings: Managers' resignations have fallen from 6.0% to 3.4%, and directors' rate is down from 1.9% to zero.
Source: "Local authority occupational therapy workforce survey", Employers' Organisation for the Social Care and Health Workforce Group, available free from Employers' Organisation for local government, 2003, tel: 020 7296 6781, www.lg-employers.gov.uk.
Scope: Occupational therapists
Technical details: Crude wastage rates analysed by type of job and region, plus trends over time and destinations.
Latest info: March 2005, covering year to 1 April 2004 (87 authorities).
Main findings: Overall crude wastage rate of 16.7% for occupational therapists.
Source: "Salary survey of pension managers, consultants and administrators", REL2, price £400 (non-participants), prices from £165 to £245 (participants).
Scope: Pensions specialists
Technical details: Annual survey. Results analysed by reason for leaving, industry, responsibility level and age, plus trends over time.
Latest info: March 2005, relating to year to 1 November 2004 (65 employers).
Main findings: Overall resignation rate has fallen from 7.6% to 4.9%.
Source: "Salary survey of HR/personnel staff", REL2, price £500 (non-participants), £310 (participants).
Scope: Personnel/HR specialists
Technical details: Annual survey. Results analysed by reason for leaving, responsibility level and function, region, broad sector, age and gender, plus trends over time.
Latest info: November 2005, relating to year to September 2005 (90 employers).
Main findings: Resignation rate has risen from 3.0% to 5.9%.
Source: Prison Service Pay Review Body, Stationery Office, www.tsc.co.uk or free from www.ome.uk.com.
Scope: Prison officers
Technical details: Annual report; includes crude wastage rates analysed by staff group and region, and as time series.
Latest info: February 2005, relating to year to 30 June 2004.
Main findings: Crude wastage rates of 5.7% (prison officers) and 16.3% (operational support staff).
Source: "Privately managed custodial services", DLA for Office of Manpower Economics, 2004, free from www.ome.uk.com.
Scope: Prison officers
Technical details: Resignation rates by role, gender and opening date of prison.
Latest info: September 2004 (three of the four private custodial companies).
Main findings: Resignation rate of 25% for prison and detention custody officers.
Source: Annual shopfloor recruitment survey by Storecheck Marketing for The Grocer4, www.thegrocer.co.uk.
Scope: Retail staff: supermarkets
Technical details: Annual survey, covering labour turnover in the major supermarket chains. Gives three-year time series for overall rate and for five named supermarket companies.
Latest info: November 2005 (130 of the top 600 supermarkets of the five major chains).
Main findings: Rate has risen from 18.8% to 29.0%.
Source: "The retail motor industry pay guide", Sewells, tel: 01733 468254, www.sewells.co.uk, price £149.95.
Scope: Retail: motor vehicles
Technical details: Annual survey in conjunction with Retail Motor Industry Federation. Includes some labour turnover data.
Latest info: 2005
Main findings: -
Source: Research by rts and IMI into staff retention, details from 01249 445622, full report price £49.505.
Scope: Retail: motor vehicles
Technical details: One-off study of retention issues in five "leading" motor dealerships. Includes labour turnover data for main staff groups.
Latest info: 2005 (18 franchises).
Main findings: Overall turnover rate of 23%.
Source: "Salary survey of sales and marketing staff", REL2, price £510 (non-participants), £310 (participants).
Scope: Sales and marketing
Technical details: Annual survey. Results analysed by reason for leaving, responsibility level and function, region and sector, plus trends over time.
Latest info: October 2005, relating to year to 1 September 2005 (93 employers).
Main findings: Resignation rates have risen from 5.3% to 5.4% (sales) and 5.4% to 6.4% (marketing).
Source: "Local authority social care workforce survey", Local Authority Workforce Survey Group, available free from Employers' Organisation for local government, 2003, tel: 020 7296 6781, www.lg-employers.gov.uk.
Scope: Social services and care homes
Technical details: Crude wastage rates analysed by type of job and region, plus trends over time and destinations.
Latest info: July 2005, covering year to 30 September 2004 (106 authorities).
Main findings: Overall rate has fallen from 13.2% to 13.1%.
Source: "Charity rewards, 2005/2006", Croner Reward with Charity and Fundraising Appointments, tel: 01785 813566, prices £285 to £325, www.croner-reward.co.uk.
Scope: Voluntary organisations' staff
Technical details: Annual survey. Gives minimum, average and maximum crude wastage rates for Greater London, outside Greater London and overall.
Latest info: Not stated.
Main findings: Average crude wastage rate in UK is 15.7%.
Source: "17th annual voluntary sector salary survey", REL2 with NCVO, price £330 (non-participants), £45-£230 (participants).
Scope: Voluntary organisations' staff
Technical details: Annual survey. Results analysed by reason for leaving, responsibility level, region, and charity's income, plus trends over time.
Latest info: September 2005, relating to year to 1 July 2005 (178 organisations).
Main findings: Overall resignation rate has risen from 7.3% to 10.2%.
1See, for example, "Job separations in the UK", Daniel Heap, Labour Market Trends, June 2005, free from www.statistics.gov.uk.
REL: Remuneration Economics, tel: 020 8549 8726, www.celre.co.uk.
3Source: "Poor management costs the industry nearly £1b a year", Chris Druce, Caterer and Hotelkeeper, 20 October 2005.
4See "A dearth of skills", The Grocer, 26 November 2005.
5See "Staff retention - yes, pay is the biggest 'hook' after all", Motor Industry Magazine, July 2005, for a summary of the rts and IMI research findings.
"Crude wastage": a turnover rate based on all types of leaver, including dismissals and redundancies.
"Resignations": employee-instigated departures that are usually voluntary.
The research for this table was undertaken between 1 November 2005 and 20 January 2006.
Source: IRS.