Compensation Resources, Inc. Releases Its 2004 Turnover Survey

Upper Saddle River, N.J. – September 2004 – Compensation Resources, Inc. has released the results of its 2004 Turnover Survey. The purpose of this study was to obtain turnover statistics and trends. Data was compiled from survey questions that were developed by CRI and distributed to companies in over ten industrial classifications, in addition to Not-for-Profit organizations. The survey sampled turnover data from a variety of organizations, collected in July and August 2004.

Results indicated that from May 31, 2003 to May 31, 2004, the average voluntary turnover rate was 11.3%. The majority of respondents indicated this rate has either increased or remained the same, while only 20.9% of participants indicated this rate has decreased in the prior 12-month period. Of all employee functional groups, Administrative level and Production level positions show the highest voluntary turnover rates; however, according to survey participants Administrative and Production level positions also take the shortest amount of time to fill. Overall, the cost of turnover to organizations is on average ½ x the employee’s salary to 1x the employee’s salary. Lastly, participants indicated that employees usually leave the organization because there is better pay and/or benefits offered elsewhere, better opportunities/increased responsibilities offered somewhere else, or involuntarily due to company layoff.

Although some turnover is inevitable, organizations must take steps to control turnover, particularly that caused by organizational factors such as poor supervision, inadequate training, unfair pay systems, lack of communication, and inconsistent policies. Human resource activities should be examined as part of the turnover control efforts.

Paul R. Dorf is the Managing Director of Compensation Resources, Inc. He is responsible for directing consulting services in all areas of executive compensation, short and long-term incentives, sales compensation, performance management systems, and pay-for-performance, salary administration. He has over 40 years of Human Resource and Compensation experience and has held various executive positions with a number of large corporate organizations. He also has over 20 years of direct consulting experience as head of the Executive Compensation Consulting Practices for major accounting and actuarial/benefit consulting firms, including KPMG, Deloitte Touche (formerly Touche Ross), and Kwasha Lipton.

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