Human Resource professionals love talking about turnover. I know this because I’ve talked about it so frequently, I’ve wanted to die of boredom. It is one of the only numbers HR people can share and (generally) understand some of the challenges you as a professional face. You sit around and say you have 5% turnover? You’re so lucky! 100% turnover? Oh wow, what a challenge. We can draw conclusions and judge based on this one silly number.

So the next phase of conversations asks why turnover even matters? Turnover is a decision a company largely makes and is often one a HR professional cannot control. We also know that the best companies in certain sectors still have double digit turnover numbers. And with this whole Generation Y, job hopping is the new black and the numbers have become muddied and meaningless.

So these people suggest other measures. Revenue (or profit) per employee. Efficiency (?!). New age productivity measures. Here’s an idea, let’s just meditate on it for a while and we can just come up with a rating from 1-100 on how the company is doing.

Turnover still tells you more than any one of those things though. But why?

Give me your last ten years of turnover calculations (both voluntary and involuntary) and I will have a great starting point to talk to you about workplace challenges.

• Is your turnover super high? How are your wages in the market? How are your managers? How is your reputation?
• Is your turnover super low? Do you have complacency? Do you hire strictly from within? How many people are you hiring a year?
• Is your turnover all over the place? What kind of business challenges are you facing? Should you be using more contractors or temporary employees? Are you losing managers after a couple of years?
• Is your turnover always rising? Are you adjusting your compensation from year to year? Do you have low trained managers? Do you have inadequate training or screening of new employees?

I can ask all of these questions of course but knowing turnover helps me start at the problem and work my way out.

Of course, people will foolishly look at turnover as a way to measure themselves against other companies. If you are the most profitable company in your sector and you have 75% turnover, turnover may not necessarily be an issue (it might be an issue too, you could be making more money after all). The same goes for the unprofitable company with 75% turnover. Yes, turnover may be an issue but it can also be an issue of business concept and execution. Or a thousand other things.

But let’s not fool ourselves into thinking that turnover isn’t important. It is important, just for different reasons than you might think.