Prediction of Employee Turnover in Organizations using Machine Learning Algorithms

Abstract

Employee turnover has been identified as a key issue for organizations because of its adverse impact on work place productivity and long term growth strategies. To solve this problem, organizations use machine learning techniques to predict employee turnover. Accurate predictions enable organizations to take action for retention or succession planning of employees. However, the data for this modeling problem comes from HR Information Systems (HRIS); these are typically under-funded compared to the Information Systems of other domains in the organization which are directly related to its priorities. This leads to the prevalence of noise in the data that renders predictive models prone to over-fitting and hence inaccurate. This is the key challenge that is the focus of this paper, and one that has not been addressed historically. The novel contribution of this paper is to explore the application of Extreme Gradient Boosting (XGBoost) technique which is more robust because of its regularization formulation. Data from the HRIS of a global retailer is used to compare XGBoost against six historically used supervised classifiers and demonstrate its significantly higher accuracy for predicting employee turnover.