Glossary: HR & Recruiting Definitions
Early turnover is the departure of recently hired team members within a company.
The average number of new recruits who leave the team early can be expressed using the so-called early fluctuation rate – an important recruiting indicator and formula.
As a rule, we talk about early fluctuation when employees give notice and leave the company relatively shortly after they have been hired. In this case, the termination usually takes place on the employee's side.
The period of early turnover is not exactly defined. However, this period often means from the time the contract is signed until the probationary period is completed.
So, by definition, early turnover occurs when the termination of employment happens within a few days, weeks, or months of onboarding a company. This happens more often than one might initially think:
According to the Haufe Onboarding Study 2021, a full 36% of respondents terminated their employment relationship even before the first official day of work at the company. Another 15% were already thinking about terminating their employment relationship on their first day of work.
It's fitting, then, that early fluctuation – or the early turnover rate – is an important recruiting metric that can provide employers with important insights.
A certain amount of employee turnover in companies is quite natural. Sometimes, colleagues retire or decide to make changes that may require laying down their jobs or changing employers.
These can be sabbaticals, upskilling (e.g. a degree), reskilling, a move, or even starting a family or a business. However, these changes usually take place only after a longer period of cooperation between the company and the employee.
The situation is somewhat different, however, in the case of early turnover. New joiners leaving so early needs to be understood as a clear warning sign.
If newly hired employees leave the company frequently or regularly shortly after joining, this indicates a lack of satisfaction. But it can also mean that the wrong decision was made when the employee was hired.
It is particularly important to note, however, that such premature departures can be very burdensome for companies, especially financially:
If new hires leave right away, the hiring process starts all over again and – depending on qualifications – causes high cost of vacancy and cost per hire, and the new training also costs a lot of money.
Keeping an eye on early turnover and regularly monitoring it can help to identify such trends at an early stage and take effective countermeasures.
We explain below what these measures can look like!
The reasons for early turnover can vary from candidate to candidate. They can be caused by:
It is not always easy to identify where exactly the problem lies. However, there are some reasons that are particularly frequent and can be pointed out.
For example, a misleading job advertisement or misleading communication with the candidate could create false ideas or expectations of the job or the company during the hiring process. This misleading can result in candidates quitting more frequently.
It is also common for onboarding to drive new employees away because it is scheduled for too short or too long – or even worse – without any structure or preparation at all.
But the company culture itself can also cause new employees to leave early. For example, through a lack of diversity, equity, and inclusion in the team, a lack of appreciation, or tensions between the new team members.
Last but not least, the prevailing uncertainty of the current labour market is probably also a driver of early turnover. Read more about this in our blog article on 7 tips for hiring in times of uncertainty.
The early turnover rate expresses as a percentage how high the proportion of employees who leave early is in relation to the total number of newly hired employees. To determine it, we need a small but powerful calculation formula.
But don't worry, the formula for early turnover is not complicated:
Of course, it should also be mentioned that both values should refer to a specific period of time (such as a quarter or a half year) in order to be truly meaningful. This is the only way to make meaningful comparisons.
Let's take another look at the formula for early turnover in a brief case study and calculation example. Let’s assume that a company has hired 15 employees within half a year.
At the end of their respective probationary periods, only 9 of these new employees are still with the company, meaning a total of 6 people have left prematurely.
The following result is used in the formula:
According to this result, more than one-third of new hires were dissatisfied with the working conditions, the onboarding process, or the company itself. A clear signal that something urgently needs to be changed in order to retain the talent they have acquired.
This brings us to the question of how to reduce early turnover. There are some simple but effective measures here, which we will briefly present.
Want to learn more about how to reduce early turnover and increase employee retention? Then these articles are just what you need:
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