Turnover Costs Research Articles

Macroeconomic volatilities and the labor market: First results from the euro experiment

We analyze the effects of labor market institutions (LMIs) on inflation and output volatility. The eurozone offers an unprecedented experiment for this exercise: since 1999, no national monetary policies have been implemented that could account for volatility differences. We use a New Keynesian model with unemployment to predict the effects of LMIs. In our empirical estimations, we find that higher labor turnover costs have a significant negative effect on output volatility, while replacement rates have a positive effect, both in line with theory. While LMIs have a large effect on output volatility, they do not matter much for inflation volatility.

Absorbing the Costs of Turnover

This study looks at the relationship between labor productivity and employee turnover. I show that the average firm suffers a productivity loss of about 10 percent from employee turnover. Since strategies for increasing employee retention may be economically infeasible, organizational characteristics that affect turnover costs are important. I argue that slack resources may absorb productivity losses. This only appears to be the case for firms experiencing high turnover rates.

The Longitudinal Study of Turnover and the Cost of Turnover in Emergency Medical Services

Background. Few studies have examined employee turnover and associated costs in emergency medical services (EMS). Objective. To quantify the mean annual rate of turnover, total median cost of turnover, and median cost per termination in a diverse sample of EMS agencies. Methods. A convenience sample of 40 EMS agencies was followed over a six-month period. Internet, telephone, and on-site data-collection methods were used to document terminations, new hires, open positions, and costs associated with turnover. The cost associated with turnover was calculated based on a modified version of the Nursing Turnover Cost Calculation Methodology (NTCCM). The NTCCM identified direct and indirect costs through a series of questions that agency administrators answered monthly during the study period. A previously tested measure of turnover to calculate the mean annual rate of turnover was used. All calculations were weighted by the size of the EMS agency roster. The mean annual rate of turnover, total median cost of turnover, and median cost per termination were determined for three categories of agency staff mix: all-paid staff, mix of paid and volunteer (mixed) staff, and all-volunteer staff. Results. The overall weighted mean annual rate of turnover was 10.7%%. This rate varied slightly across agency staffing mix (all-paid == 10.2%%, mixed == 12.3%%, all-volunteer == 12.4%%). Among agencies that experienced turnover (n == 25), the weighted median cost of turnover was $$71,613.75, which varied across agency staffing mix (all-paid == $$86,452.05, mixed == $$9,766.65, and all-volunteer == $$0). The weighted median cost per termination was $$6,871.51 and varied across agency staffing mix (all-paid == $$7,161.38, mixed == $$1,409.64, and all-volunteer == $$0). Conclusions. Annual rates of turnover and costs associated with turnover vary widely across types of EMS agencies. The study's mean annual rate of turnover was lower than expected based on information appearing in the news media and EMS trade magazines. Findings provide estimates of two key workforce measures—turnover rates and costs—where previously none have existed. Local EMS directors and policymakers at all levels of government may find the results and study methodology useful toward designing and evaluating programs targeting the EMS workforce.

Mathematical modelling of energy expenditure during tissue deposition

Predicting the magnitude and rate of weight gain for a given increase of energy intake requires a model of whole-body energy expenditure that includes the energy cost of tissue deposition. Here, I introduce a mathematical framework for modelling energy expenditure that elucidates conceptual problems with the classical Kielanowski method for estimating the efficiencies of body fat and protein deposition. An alternative approach uses the theoretical biochemical efficiencies for protein and fat synthesis in combination with models of energy expenditure that include body fat and protein turnover costs. I illustrate this alternative approach using a simple mathematical model applied to previously published data from growing rats and human infants and compare the simple model results with the classical Kielanowski model. While both models fit the data reasonably well (R2>0.87 in rats and R2>0.67 in infants), the Kielanowski method resulted in parameter estimates that varied widely across experiments, had poor precision, and occasionally produced efficiency estimates greater than 1. In contrast, the new method provided precise parameter values and revealed consistencies across different experiments. The proposed mathematical framework has implications for interpreting studies of animal nutrition as well as providing a roadmap for future modelling efforts.

Growing Pains: How Employee Turnover Affects Firm Performance

According to conventional wisdom, the costs of employee turnover are substantial and something that firms should avoid. Yet the causes and consequences of employee turnover are complicated. There may be both positive effects from sorting among employees and negative effects from loss of valuable human capital. Maybe poor performance is cause for turnover rather than its consequence. This study attempts to disentangle sorting effects from the effects of human capital loss while controlling for reverse causality in a panel study of 3,033 Danish small and medium-sized firms 1995-2007. I compare fixed effect and GMM estimators and the results I report suggests substantial simultaneity bias (reverse causality) which invalidates fixed effect estimates. The substantive results suggest that sorting benefits and human capital loss are mechanisms that operate simultaneously.

Organizational and Occupational Embeddedness of Federal Law Enforcement Personnel

Purpose The purpose of this study was to investigate the relationships among identification, embeddedness, and turnover intentions at the organizational and occupational levels. Design/methodology/approach—Over 1,100 members of the United States Air Force Office of Special Investigations completed an on-line survey. The sample included Agents and staff who were officers, enlisted, and civilians. Findings Measures of fit, sacrifice, and links were positively related to organizational embeddedness. Organizational and occupational embeddedness were negatively related to turnover intentions. Organizational and occupational identification were negatively related to turnover intentions. Embeddedness fully mediated the relationship between identification and turnover intentions at the organizational level and partially mediated the relationship between identification and turnover intentions at the occupational level. Implications Turnover can be expensive in organizations where training costs are high. Understanding embeddedness may help practitioners reduce turnover costs. Combining models of embeddedness and identification can help researchers understand the mechanisms by which employees are rooted in organizations, and organizations are rooted in employees. Originality/value This paper is one of very few papers that have examined job embeddedness in law enforcement organizations, or occupational embeddedness in any organization. This is one of the first studies to examine the relationships among identification, embeddedness and turnover intentions. The paper demonstrated the value of adding identification to the job embeddedness model.

The Longitudinal Study of Turnover and the Cost of Turnover in Emergency Medical Services

The Longitudinal Study of Turnover and the Cost of Turnover in Emergency Medical Services

How much does labour turnover cost?: A case study of Australian four- and five-star hotels

How much does labour turnover cost?: A case study of Australian four- and five-star hotels

Fiscal Multipliers and the Labour Market in the Open Economy

Several contributions have recently assessed the size of fiscal multipliers both in RBC models and New Keynesian models. None of the studies considers a model with frictional labour markets which is a crucial element, particularly at times in which much of the fiscal stimulus has been directed toward labour market measures. We use an open economy model (more specifically, a currency area calibrated to the European Monetary Union) with labour market frictions in the form of labour turnover costs and workers’ heterogeneity to measure fiscal multipliers. We compute short and long run multipliers and open economy spillovers for five types of fiscal packages: pure demand stimuli and consumption tax cuts return very small multipliers; income tax cuts and hiring subsidies deliver larger multipliers, as they reduce distortions in sclerotic labour markets; short-time work (German Kurzarbeit) returns negative short-run multipliers, but stabilises employment. Our model highlights a novel dimension through which multipliers operate, namely the labour demand stimulus which occurs in a model with non-walrasian labour markets.

Macroeconomic Volatilities and the Labor Market: First Results from the Euro Experiment

This paper analyzes the effects of different labor market institutions on inflation and output volatility. The eurozone offers an unprecedented experiment for this exercise: since 1999, no national monetary policies have been implemented that could account for volatility differences across member states, but labor market characteristics have remained very diverse. We use a New Keynesian model with unemployment to predict the effects of different labor market institutions on macroeconomic volatilities. In our subsequent empirical estimations, we find that higher labor turnover costs have a statistically significant negative effect on output volatility, while replacement rates have a positive effect, both of which are in line with theory. While labor market institutions have a large effect on output volatility, they do not seem to have much of an effect on inflation volatility, which can also be rationalized by our theoretical model.

Societal cost of rheumatoid arthritis patients in the US

Objective:To estimate comprehensive cost of rheumatoid arthritis (RA) patients to society and individual stakeholders, including patients/employees, employers, family members/caregivers, and government.Research design and methods:Administrative claims databases covering privately insured and Medicare and Medicaid beneficiaries in the US were used to compute the excess payer and beneficiary-paid costs per patient with RA compared with matched controls. Similarly, per-person excess costs for caregivers and uninsured patients with RA were estimated. Costs were estimated for other burdens, including costs of work-loss to employers, adaptations to home and work environments, lost on-the-job productivity, informal and hired care/household help, and job turnover costs. Intangible costs associated with quality-of-life deterioration were estimated based on legal system jury awards, whereas costs for premature mortality were based on lifetime earnings data. Per-capita cost estimates were weighted by the relevant population to estimate societal costs. Because data were incomplete, several assumptions were required; these assumptions could lead to an over- or under-estimation of cost burdens.Results:Annual excess health care costs of RA patients were $8.4 billion, and costs of other RA consequences were $10.9 billion. These costs translate to a total annual cost of $19.3 billion. From a stakeholder perspective, 33% of the total cost was allocated to employers, 28% to patients, 20% to the government, and 19% to caregivers. Adding intangible costs of quality-of-life deterioration ($10.3 billion) and premature mortality ($9.6 billion), total annual societal costs of RA (direct, indirect, and intangible) increased to $39.2 billion.Conclusions:Societal costs of RA in the US are $19.3 billion and $39.2 billion (in 2005 dollars) without and with intangible costs, respectively. This study was one of the first to attempt to quantify the comprehensive burdens of RA. Despite several assumptions made in areas in which few data exist, the findings generate useful insights into the full burden of RA.

The energy cost of protein turnover is arbitrarily distributed between maintenance requirements and protein retention efficiency – response by Roux

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The energy cost of protein turnover is arbitrarily distributed between maintenance requirements and protein retention efficiency – Comments by Hall

The energy cost of protein turnover is arbitrarily distributed between maintenance requirements and protein retention efficiency – Comments by Hall

The Costs of Turnover in Nursing Homes

Turnover rates in nursing homes have been persistently high for decades, ranging upwards of 100%. To estimate the net costs associated with turnover of direct care staff in nursing homes. DATA AND SAMPLE: Nine hundred two nursing homes in California in 2005. Data included Medicaid cost reports, the Minimum Data Set, Medicare enrollment files, Census, and Area Resource File. We estimated total cost functions, which included in addition to exogenous outputs and wages, the facility turnover rate. Instrumental variable limited information maximum likelihood techniques were used for estimation to deal with the endogeneity of turnover and costs. The cost functions exhibited the expected behavior, with initially increasing and then decreasing returns to scale. The ordinary least square estimate did not show a significant association between costs and turnover. The instrumental variable estimate of turnover costs was negative and significant (P = 0.039). The marginal cost savings associated with a 10% point increase in turnover for an average facility was $167,063 or 2.9% of annual total costs. The net savings associated with turnover offer an explanation for the persistence of this phenomenon over the last decades, despite the many policy initiatives to reduce it. Future policy efforts need to recognize the complex relationship between turnover and costs.

Reflecting on Turnover Costs in Nursing Homes

Reflecting on Turnover Costs in Nursing Homes

A Study on Call Center Callers' Job Attitude and Turnover Intention

The importance and the value of call center callers are increasing since they play very crucial roles as representatives of their companies at the closest contact point with customers. However, they have low satisfaction at work and are more likely to leave their jobs due to the fact that they are exhausted from heavy work load; they provide less pay and less chance for promotion than other jobs in the same industry. The high turnover costs companies high expenses on finding and training new callers. In the mean time, customer satisfaction may drop and it can give the customers negative image of the company. Therefore, solutions are required to keep the turnover of call center callers to the minimum. In this study, call center employees in Gwangju area were investigated for their job attitude and turnover intention. Based on the results, several implications are suggested.

LABOR TURNOVER COSTS AND THE CYCLICAL BEHAVIOR OF VACANCIES AND UNEMPLOYMENT

This paper extends the Diamond-Mortensen-Pissarides (DMP) matching model with endogenous job destruction by introducing postmatch labor turnover costs. We consider training and separation costs that create heterogeneity among workers. In particular, there are two types of employed workers: (i) new entrants who need training in order to become fully productive, and (ii) incumbents who are fully productive and whose departure from the firm imposes costs on it. We find that our calibrated model, relative to the standard DMP model, comes closer to the data regarding the volatility of vacancies and unemployment without introducing unrealistic sensitivity to policy changes. Moreover, our extended model nearly reproduces the downward-sloping Beveridge curve, which is unusual when endogenous job destruction exists in this type of model.

Costs of Turnover Among Female Managers: A Human Capital Framework

Abstract The adoption of flexible work arrangements to accommodate women's family responsibilities is usually seen as costly for organizations. In order to demonstrate that losing women in managerial and professional positions is even more costly, a method of determining the true costs of employee turnover is required. Thus, the issue of women's turnover must be approached in the context of an organization's beliefs about turnover in general. A human capital framework can provide a means of determining this, by examining the organization's beliefs about the nature of the training it provides, and its consequent investment in its employees. The accounting profession is used to illustrate this approach. Résumé L'adoption des horaires de travail souples pour concilier les responsabilitès familiales des femmes est coûteuse pour les entreprises, du moins telle est la perception gènèrale. Mais pour dèmontrer que la perte d' une femme dètenant un paste de cadre ou de professionnelle est encore plus coûteuse, il faut trouver une mèthode de calcul des coûts vèritables du roule-ment du personnel. Par consèquent, la question du roulement du personnel fèminin doit être apprèhendèe dans le contexte global de la conception de l'entreprise au sujet du roulement du personnel en general. Pour ce faire, á I'aide d'une grille s' appuyant sur le capital humain, on examinera comment l' entreprise concoit la formation et dans quelle me sure elle investit dans ses ressources humaines. La profession de comptable est utilisee pour illustrer cette approche.

Using a Model of Human Energy Metabolism to Estimate Energy Costs of Turnover

The goal of this research is to use a computational model of nutrient digestion and metabolism in a human to predict energy use and quantify effects of increased futile cycling on energy metabolism. The model is composed of 6 state variables representing amino acids, body protein, visceral protein, glucose, triglyceride, and fatty acids. Differential equations represent carbohydrate, amino acid, and fatty acid uptake and output by tissues. The model estimates metabolizable energy, heat production (HP), respiratory quotient, P/O ratio, energy balance and glucose and fatty acid oxidation based on ATP creation and use, O2 use, CO2 production, heats of combustion, and nutrient flux. Protein deposition is a function of maximum genetic potential for protein accretion. Adipose deposition is a function of energy balance. To examine effects of increasing protein and adipose turnover, protein turnover increased from 2 to 14 %/day and adipose turnover increased from 1.5 to 3.0 %/day for a 70 kg male. Increasing protein turnover increased HP from 11.2 to 20.5 MJ/day, increased glucose oxidation from 1.88 to 2.29 mole/day, increased fatty acid oxidation from 0.132 to 0.873 mole/day and decreased body weight by 6 kg over a 30 day simulation. Increasing adipose turnover decreased HP from 10.8 to 10.7 MJ/day, decreased glucose oxidation from 2.18 to 2.04 mole/day, increased fatty acid oxidation from 0.0200 to 0.0543 mole/day, and decreased body weight by 4.5 kg over a 30 day simulation. Therefore the model is able to predict body weight loss due to increased heat production from increased energy use as a result of changes in muscle and adipose turnover. Since humans are genetically diverse with a range of basal metabolic rates, activity levels and diets, a computational model will quantify diversity and predict metabolic function for a wide range of individuals.

Effects of a preceptorship programme on turnover rate, cost, quality and professional development

The purpose of the present study was to design a preceptorship programme and to evaluate its effects on turnover rate, turnover cost, quality of care and professional development. A high turnover rate of nurses is a common global problem. How to improve nurses' willingness to stay in their jobs and reduce the high turnover rate has become a focus. Well-designed preceptorship programmes could possibly decrease turnover rates and improve professional development. A quasi-experimental research design was used. First, a preceptorship programme was designed to establish the role and responsibilities of preceptors in instructing new nurses. Second, a quasi-experimental design was used to evaluate the preceptorship programme. Data on new nurses' turnover rate, turnover cost, quality of nursing care, satisfaction of preceptor's teaching and preceptor's perception were measured. After conducting the preceptorship programme, the turnover rate was 46.5% less than the previous year. The turnover cost was decreased by US$186,102. Additionally, medication error rates made by new nurses dropped from 50-0% and incident rates of adverse events and falls decreased. All new nurses were satisfied with preceptor guidance. The preceptorship programme effectively lowered the turnover rate of new nurses, reduced turnover costs and enhanced the quality of nursing care, especially by reducing medication error incidents. Positive feedback about the programme was received from new nurses. Study findings may offer healthcare administrators another option for retaining new nurses, controlling costs, improving quality and fostering professional development. In addition, incentives and effective support from the organisation must be considered when preceptors perform preceptorship responsibilities.