Each company has its own personnel department, but many people do not understand what exactly the employees who work there do. Of course, the first thing that comes to mind is hiring and firing, but in reality the functions of the employees of this department are much wider. Moreover, they need to know a lot of different theoretical information, and most importantly - to be able to apply them in practice. Therefore, only the highest professionals should always work there, so that they can positively influence the life and growth of the company. However, this discussion will not deal specifically with the personnel department, but with one small specific coefficient that affects a lot and is part of a system for analyzing and monitoring staff turnover. This topic will become the main one in this material. As for the coefficient, you will learn about it a bit later - for now, it is better to focus on a global view of the issue. Do you know what staff turnover is? How does this affect the health of the company? What can be done with this? You have to deal with these concepts, especially if you intend to work in the human resources department or plan to maintain your own company.
Staff turnover
Personnel turnover is a problem that exists in absolutely all organizations, and it is with it that many entrepreneurs primarily try to fight. What it is? Staff turnover refers to the process of constant change of employees within the same organization. It is easy to understand that turnover is not a good and positive indicator. Firstly, this means that the company has conditions that are far from ideal, which is why employees prefer to quit in order to transfer to another, more favorable position in another company. Secondly, this means that it is very difficult to organize teamwork, as the staff immediately changes, as soon as it starts to get used to each other and establish interaction. Thirdly, it causes direct damage to the company, as you have to constantly look for new employees, spend money and time on their training, try to compensate for the downtime, and so on. In general, turnover is one of the biggest problems of any organization, therefore, it is definitely necessary to fight it with all our might, which is often the direction of the personnel department. How is this done? First of all, it is worth noting the analysis and accounting of personnel.
Worker movement analysis
Personnel accounting is one of the most important functions of this department. Professionals must use a wide variety of formulas to determine the state of a firm at a given moment in terms of turnover. The analysis is usually multilevel and touches on many issues. As a matter of fact, the basis of this analysis is the calculation of personnel turnover, that is, the ratio of employees hired and retired. However, it is immediately worth noting that HR specialists have several very useful formulas that allow you to calculate extremely interesting and important factors, which are then much more convenient to work with. And exactly one of them will be discussed in this article. Which one? From this material you will learn what the constant factor of personnel is, and also study in detail what it is made of and how to calculate it using an example. Remember that this ratio is very important for analyzing the movement of employees in the company, so not a single competent specialist will neglect it. It is no less important than the turnover rate adjacent to it .
Coefficients in the analysis of employee movements
Personnel constancy coefficient is only one of a large number of factors that the personnel department works with in the process of analyzing employee movements, determining turnover and effectively combating it. First of all, it is worth noting two basic factors - the turnover of admission and dismissal. The first shows how many employees the firm took to various positions during the reporting period, and the second - how many of them quit. It should be noted that the coefficient is a much more convenient unit of measurement. The usual number of employees does not tell you anything, because you may not know in what framework the company operates, what its size is, and so on. The coefficient offers you a clear value from zero to one (or it is 0% to 100%) - that is, you know the specific boundaries, and it is easier for you to navigate and use this indicator for further analytical work. The same applies to the yield coefficient, which shows how serious the problem of turnover in the company at a given moment. But what is the constancy rate? This indicator is given the most attention in this article.
What is the constancy coefficient?
Well, it's time to find out specifically what the constancy rate is. In the same way as in the case of turnover, this indicator demonstrates how well the company is doing with the ability to retain important employees in the workplace. It is easy to guess that this coefficient is very important in analytical work, so you should pay enough attention to it to fully understand how to calculate it. Naturally, he has his own formula, according to which the calculation is made. If you are not too strong in personnel activities, then the further description may seem like a complicated set of words for you, but do not rush to despair - further in the article each item will be analyzed in detail and separately. So, in order to find out the constancy coefficient, or, as it is also called, the personnel stability coefficient, you need to subtract the number of employees laid off during the calculation period from the payroll number at the beginning of the estimated period, and divide the result by the average number for a specific period. The result can be used as a coefficient - or you can multiply by one hundred to get a percentage result. As you can see, at first glance, everything is quite confusing, but if you carefully study this issue, then you are unlikely to have any difficulties in the future. Well, the time has come to parse each item separately, then to calmly put them together as a whole for a complete and absolute understanding of this issue.
Headcount
So, the first indicator that you encounter when you are interested in the personnel stability coefficient is the payroll number of employees for the reporting period. Separately, this parameter no longer causes such confusion, and you can easily guess that it means the number of employees that were in the company at the beginning of the reporting period - it can be any period, but most often the reporting in the personnel department is either a month, either a year. Therefore, the specialist needs to make an accurate frame count throughout the organization in order to be able to use this parameter in the formula for further coefficient calculation. Naturally, this is not the only thing that you should be interested in when you are trying to calculate the rate of constancy of personnel - the formula also includes other elements that you will learn about in a little more detail now. Always remember that each element is extremely important in the calculations, so you should not make mistakes even in small things, because this will entail even more impressive problems and errors.
The number of laid-off employees
This is one of the simplest elements in calculating how constant frame rates are. The formula also includes much more complex parameters, but now you should focus even on such trifles. Most likely, you have already guessed that in this case you need to calculate the number of all laid-off employees for the entire reporting period. And we are talking about absolutely all employees, that is, all the reasons for dismissal are taken into account. This can be either standard options, such as dismissal of one’s own free will, incompetence, absenteeism and violation of labor discipline, or dismissal stipulated by law - in most cases, this is a draft in the army, moving to the spouse’s place of employment, enrolling in an educational institution with the impossibility of continuing to fulfill work obligations. Physiological causes, such as prolonged illness or even death, are also taken into account. In any case, all layoffs are taken into account in this parameter and participate in further calculations according to the above formula. And when you already have the number of employees who left the organization, there comes a time when you need to calculate the number of employees who have worked the entire reporting period.
The number of employees for the entire reporting period
In this paragraph, you have to calculate the difference between the hired / dismissed employees for the reporting period. Here you will not need any new information, you will work with indicators that you already have. So, to calculate the number of employees who worked in the organization for the entire reporting period, you will need to perform a simple subtraction action. Take the payroll number of employees, which indicates the number of people who were registered at the workplace at the beginning of the reporting period, and subtract from it the number of laid-off employees who left their positions in the company during the reporting period. As a result, you will get the desired value - the number of employees who worked at the enterprise during the entire reporting period. With this value you will need to work further - and in fact you have only one step left to find out the result of all this work. But this step is big, serious, and also requires a lot of calculations. After all, now you need to find out what is the average number for the year.
The average number of employees for the reporting period
You already know what the headcount is , but you still have no idea what the average headcount is. Now you have to find out about this, because without this indicator you can not in any way find out the constancy coefficient. So, the average number gives you the value based on the list number for each individual stage of the reporting period. If the reporting period is one month, then the average number will be calculated on the basis of the daily list. How exactly is this value calculated? To do this, you need to calculate the number of employees in the company for each day, then add up the results of all days, and divide the amount by the number of days in the reporting period. As a result, you will get the average number, which you can further use in the formula. However, this simplified approach only works if you do not have contract or temporary workers. Temporary workers are those employees of the company who work part-time. Here, the calculation is made not by the number of employees, but by the hours they worked, in relation to the total amount of hours worked out as part of an ordinary working day.
Coefficient calculation
Well, now you have all the data you need in order to fully understand the formula. You understand what retirement is, how this parameter interacts with the headcount of employees, as well as much, much more. You know absolutely all the data, and all that remains for you is to substitute the necessary numbers. Now, so that you understand everything as accurately as possible, one specific example will be analyzed. It’s only worth mentioning right away that when calculating the average headcount for simplification, only permanent employees will be considered - nevertheless, far from every company has employees who do not work on a permanent and full basis. If your company still has them, then make sure that the personnel department takes them into account separately from regular employees.
So, it is worth assuming that the average company at the beginning of the reporting year had a hundred employees - this is a convenient amount for further calculations. During the year, twenty of them quit. These are two values that you can substitute in the formula to get the third. Subtract from the payroll number of employees (100 people) the number of laid-off workers (20 people) to get the number of employees for the entire reporting period - it will be eighty people. This value is abstract, that is, you cannot use it for any other calculations, so just mark it so as not to lose.
It's time to move on to the next step - the calculation of the average number. This is a slightly more complicated and lengthy process, since you will need to take the number of employees for each day of the reporting period to get the desired result. It makes no sense even in the example to try to bring any number of employees, but most often it is less than a hundred. In the calculations for this example, the number 93 is obtained, which you can now use to obtain the final result. As far as you remember, the numerator of your formula contains the number 80, but now you add the number 93 to the denominator. The result of the division is a factor of 0.86, rounded to two decimal places. If it is more convenient for you to work with a percentage indicator, then you can multiply this indicator by 100 to get eighty-six percent. Or you can leave everything exactly as it is and use a fractional coefficient. In any case, you have a finished result. However, one very important question remains - what does it mean? That is, do you have any specific meaning, but will the HR specialist bring good or bad news to his boss? With further analysis, find out that the company is in a deplorable state? Or prosperous?
The desire for a unit
Naturally, you need to understand this entire industry in order to immediately say how good this result was obtained in the previous example. However, now you will find the answer to this question that interests you greatly. So, based on the practice that exists today, the coefficient tends to unity, so your result of 0.86 (or eighty-six percent) is close to normal. Of course, it is impossible to predict how this coefficient will come out, but you know that it reflects stability, the constancy of the team in the company, and you can work with this coefficient further in the analysis. It is usually used in combination with a yield coefficient, because the constant coefficient itself is incomplete and does not show the whole picture. That is, you cannot come to the boss from the personnel department and say that the constancy rate this year is very good - the specialist must provide a full report, and this ratio is important exclusively for him. The boss, on the other hand, is waiting for a report on the level of staff turnover, how bad it is, and what is planned to be done with it.