Discover how data can be used to predict if and when an employee may decide to leave your organization. By knowing what to track, employers can start preparing ahead of an employee departure — and perhaps even fix underlying issues before employees decide to leave.
Employee turnover can be challenging to manage, especially when a departure catches you off-guard and leaves your staff scrambling. With data analytics, turnover doesn't have to come as a surprise, as you'll be able to proactively recognize some of the signs your employee is about to leave. Ketan Chauhan, Director of Product Management for ADP DataCloud, explains how tracking the right information can help you identify whether employees are looking to move on so you can start preparing in advance.
How data can help predict employee departure
Recognizing the signs of a disengaged employee means taking note of their demeanor and performance. Common signs that an employee is about to quit include:
- Decreased productivity
- Lack of attention in meetings
- Showing up late and missing more days of work
- Lack of interest and responsiveness with direct manager
- Inability to accept long-term deadlines and plans
- Expression of dissatisfaction with their job
Ketan has found that when an employee starts to show signs in anticipation of leaving the company, it's usually for more than one reason.
"Pay is always a big thing, but there could be other factors," says Ketan. "Some common data points also include time in current role, overall tenure, commute distance and time, and the time since their last pay increase and promotion."
The idea is that by tracking these data points you can start to see patterns. For example, consider the average length of tenure for employees who quit. If the employees who are leaving have been with your organization for a while, the issue could be that there isn't enough opportunity to grow at your organization and people eventually start to feel stagnant. On the other hand, if it's employees with low tenure who are leaving, it could be a problem with your onboarding and hiring process.
Knowing this information can help you address a range of issues. For instance, if you find that employees with longer commute times are more likely to quit, you could offer more opportunities to work from home. Which factors matter most to members of your organization will depend on your industry and your unique workforce conditions. You'll need to track and analyze your data to find the answer.
Employee turnover challenges
Employee turnover can hurt your business in several ways. First, there's the cost of the turnover itself. Whenever an employee leaves, you have to cover all the expenses of finding a replacement, including recruitment, onboarding and training. Your business may also take a productivity hit.
"If you have a salesperson who is really productive, there's no guarantee that the next person will do as well," says Ketan. "Even if the new hire ends up becoming a superstar, it probably won't happen during the first 30 to 90 days. Your bottom line takes a hit on both ends: sales go down, and costs go up."
According to Ketan, recruiting, onboarding and training a new employee can be expensive, and the cost increases depending on their role.
Another challenge is the state of the post-pandemic labor market. Ketan notes that, while voluntary turnover decreased at the height of the pandemic, the market may be tightening now. Indeed, some 24 percent of employees have recently considered changing jobs, according to a report from Prudential. At the same time, there's more competition around hiring workers, especially in industries like retail and hospitality. If an employee moves on, it could be especially difficult to replace them now, which is why any advance notice is valuable.
How employers can track this data
To get started, Ketan recommends identifying the top signs your employee is about to leave, based on the organization's history. From there, you can track these factors to see which come up most frequently. If you use ADP for HR and payroll, their analytics product, powered by the ADP® DataCloud, is automatically tracking workforce information of this kind for you.
ADP also uses a turnover probability model that tell you the top reasons why your employees move on, as well as how your company compares to industry averages. It does this by analyzing your internal HR metrics, such as payroll and employee attendance, and comparing them against the anonymized data of over 30 million employees nationwide who are also on the ADP system. The dashboard then identifies which of your employees are at risk of leaving based on your data.
"The guiding principle behind ADP DataCloud is to take a sophisticated topic like employee turnover and give people the analytics in a simplified experience," says Ketan.
If you don't use ADP systems, Ketan says the HR system you currently use will be generating data you can review. If you aren't working with any HR software, you'll need to do a little more leg work to manually track the factors behind your employee turnover yourself.
For more information on why people are leaving, make sure to conduct exit interviews to get a sense why people left. "Ask what happened. Was it an opportunity for better pay so that they could avoid working so much overtime?" says Ketan. Getting this in-person feedback can help you verify the assumptions behind the rest of your data.
The right course of action depends on why employees are leaving. You need to find the root causes and then make an action plan for how you will fix them for the rest of your employees. For example, if you find that people tend to leave after being in the same role for a while, identify the employees to whom this applies. Reach out and ask if they're happy staying in that role or if they're looking to grow their career.
Ketan notes that, during the pandemic, burnout has been a big factor in turnover. With many employees working from home, the usual nine-to-five schedule is less common, and some employees have worked beyond those hours. As a result, the HR departments are reaching out to employees to ensure they take their scheduled breaks and vacations to prevent turnover from burnout.
Tools like ADP DataCloud can provide insights you may not have considered so you can start making arrangements now, before employees move on. Employee turnover does not have to be a surprise, and it isn't out of your control. By leveraging data analytics and speaking with your employees about their experience at work, you can take proactive steps to prepare your organization for probable turnover and perhaps even stop employees from wanting to leave in the first place.
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