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Turnover Intent & Its Drivers

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Last week’s report that US jobless claims dropped to the lowest level in two years gave human resource managers one more reason to worry about an increase in voluntary turnover. Employees who were dissatisfied but felt that other jobs weren’t available may begin to investigate their options.

To anticipate this, for decades, researchers have included in their employee-satisfaction surveys some variation of a turnover intent question, such as this one:

Taking everything into consideration, how likely is it that you will make a genuine effort to find a new job (with another employer) within the next year?

• Not at all likely
• Slightly likely
• Moderately likely
• Very likely
• Completely likely

To use this question, it is important that your employee-satisfaction survey is conducted anonymously and that employees trust that it is in fact anonymous. Otherwise respondents will not answer it honestly.

One of the few national studies across occupations is the 2001 study, “The impact of job satisfaction on turnover intent: a test of a structural measurement model using a national sample of workers”, by Eric G. Lambert, Nancy Lynne Hogan and Shannon M. Barton.

From their research, the authors found that job satisfaction was the structural effect with the largest impact on turnover intent (0.400 direct effect). Tenure was next (0.185 effect), indicating the longest serving employees are the most at risk for seeking employment elsewhere.

The perceived availability of alternatives was third in importance (0.106). You can adapt their question for measuring this perception:

About how easy would it be for you to find a job (with another employer) with approximately the same income and fringe benefits you now have?

• Not at all easy
• Slightly easy
• Moderately easy
• Very easy
• Extremely easy

As with many other studies about employee priorities, financial rewards are lower on the list of effects of turnover intent than many managers expect: here it was fourth, with a 0.096 direct effect on turnover intent. Rounding out the list was age (0.078), with education level and gender having statistically insignificant effects on turnover intent.

A review of the academic literature reveals that the reasons for turnover intent often vary dramatically by industry and establishment, requiring you to do your own research as to likely drivers of voluntary turnover for your organization. Do it consistently semiannually, and you will be able to more accurately forecast voluntary turnover for the next six-month period.

My own forecast: voluntary turnover is going to be higher in the second half of this year than it was in the first.