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Analysis of High Turnover Rate

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Essay title: Analysis of High Turnover Rate

Analysis of High Turnover Rate


High turnover rate of minorities and female employees has become a serious issue in the United States. Even though many ethnic races form this country, male Anglo-Saxons dominate the majority of the workforce. It is not uncommon for minority and female employees to leave their company after only working for a few years. Why has this behavior become a trend? In order to stop this trend, companies must ask themselves several questions. For example, what are the issues causing the high turnover rate? What legal and ethical issues are the companies facing? After these questions have been asked and processed, solutions must be implemented to change the flow of the trend.

While implementing solutions to the high turnover rate, companies must know and understand the law. The law is created and enforced by the government to prevent any discrimination or biases between the company and employees. It also prevents the strong, corporations, from taking advantage of the weak, employees.

Keeping a high turnover rate, companies will continue to lose money until they decide to deal with the issue. Through some adjustments and implementations of the programs to lower turnover rates, the company can see a significant change in their costs and what they might actually save.

Companies must understand the potential hazard that high turnover rate may cause company. By analyzing banks, one can understand what and where the problem lies.

Statement of Problem

Employee turnover costs are very costly to a company. Turnover not only affects the bottom line but also affects the company’s morale. We are analyzing the problems within our company that are causing our employees to become unsatisfied with their job. Then we are going to find solutions. And then do the cost estimates of the turnover costs and the turnover savings after our solutions are implemented.

Without understand the negative impacts of turnover, a company may be placing itself in a position that will ultimately lead to their demise. We are going to solve our problems and set our company on the path to success, a success that is not only reflected in our bottom line but also our employees’ morale.



Currently, the Bank of Tomenak employees 20,000 people, which only 35% are female or minority. The average biannual turnover rate for our females and minority employees is 65%. The average turnover cost for one employee is estimated to be 18% of their annual salary. Our annual salary is $36,000. Each year an average of 2,275 females and minorities are leaving our company. Our yearly turnover cost is an estimated $14,529,356.00

Originally our turnover cost was estimated to be $35.2 million per year. This was derived from a calculation created by Cornell University and Saratoga Institute. However, the calculations were not precise. Therefore, we looked for alternative calculations.

The Chally Group , based out of Dayton, Ohio, adapted a study by the University of Wisconsin Extension- Center for Community Economic Development to produce a turnover calculator. In this cost calculator, each subtotal cost was itemized. Therefore, we could identify the costs that were not relevant to our company. We then were able to subtract the irrelevant costs from our final total turnover cost.

The total cost of turnover is broken down into three main sections: Separation Costs, Replacement Costs, and Training Costs.. The Separation Costs consist of:

• Cost of exit interviewer,

• Cost of Exit Interview Employee Time

• Admin. Cost Related to Termination, and

• Increase in Unemployment Tax.

The Replacement Costs consist of:

• Pre-employment Administration Costs

• Costs of Attracting Applicants

• Cost of Interview Process

• Assessment Cost

• Background Check Cost

• Staff Cost to Meet & Confer, and

• Post-employment Administration Costs.

The Training Costs consist of

• Cost of Informational Literature and Manuals

• Duration of Formal Training

• Costs

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