Exploring High Turnover Rate in a Large US Company

Posted on Oct 10, 2022

TLDR

Exploratory data analysis on a dataset with information on  10,000  employees at a large U.S. Company to figure out why  this company has a large turnover rate.  The  employees that are leaving the company work more hours and score higher on reviews from their employer on average.  These high-achieving employees leave around years 5-9, consistent with when major promotions are given out. The high-achieving employees that quit did not get a promotion, and frequently worked more and scored better on reviews than those that did get promoted. Suggested actions to alleviate high turnover rate: Investigate current promotion process, make promotions accessible to top performers, and/or be sure to reward top performers to distinguish them from low performers.

Figure 0: Average monthly hours vs average score on employee review from employer, and  whether or  not the employee was promoted. Many of those that worked longer hours and scored higher on reviews than those who were promoted, did not get promotions themselves. 

 

Overview 

 

Employee turnover has been a hot topic since the start of the pandemic. Turnover rates have been increasing and are expected to continue on an upwards trend¹. The question naturally arises- why are people eager to leave their jobs? We can inspect this by running some exploratory data analysis on a dataset containing recent information on 10,000 employees from a large U.S. company. 

 

Who is Leaving  the Company, and Why?

 

We can inspect several employee factors like salary, department, employee review, and average hours worked to see what types of employees are leaving. Figure 1 reveals that employees from all salary tiers and departments  are leaving the company at a similar rate, with a P value of .56 and .84 respectively-  showing  that there is not a statistically significant difference between any of the rates. We can conclude that salary and department are not driving factors of the company’s high turnover rate. 

Figure 1: (Left) Salary tier of employee vs percentage of employees that quit in that  salary tier. (Right) Department of employee vs percentage of employees that quit in that department.

 

Exploring performance features may give us some more information. Figure 2 shows us that employees that are receiving high scoring reviews from their employer  and employees that are working more hours per month on average leave at a higher rate, with a p-value of  4.37e-10 and 4.98e-31 respectively. Since the difference between rates  in these categories is statistically significant, we can conclude that the types  of employees that are  leaving  are employees  that are working more and scoring  better  than their peers. So why are their best employees leaving?

 

Figure 2: (Left) Turnover rates in employees that received a high score or low score review from  their employer, compared to the average turnover rate. (Right) Turnover  rates in employees that worked  high or low monthly  hours compared to the average. 

 

In Figure 3, we can see that satisfaction drops around the year 6 mark. Newer employees (tenure ≤5)  and more seasoned employees (tenure≥10) seemed to be much more satisfied with their roles than middle employees. Also in figure 3,  turnover rates are much  higher for those that did not receive a promotion vs those that did. We can see that promotions are usually given out around the year 5-9 mark, showing that  most employees  leave when they are  not promoted. So, we can ask: what types of employees are getting a promotion?

Figure 3: (Top left) Tenure (# years at company) vs employee self-rating of how satisfied they are in their role. (Top right) Turnover rates in employees that either were or were not promoted, compared to the  average turnover rate. (Bottom left) Tenure (#  years at company) vs the number of employees that were promoted in that tenure bracket. 

 

Figure 4 shows that there is no difference in employee performance in those that got promoted vs  those who didn't. Average month hours were 184 in both groups, and average review score was 65 in both groups. Many of those that worked longer hours and scored higher on reviews than those who were promoted, did not get promotions themselves. 

Figure 4: Average monthly hours vs average score on employee review from employer, and  whether or  not the employee was promoted.

 

Insights/Suggested Actions

 

From the analysis, it seems that newer employees stay on for a few years and are generally  satisfied with their job. Promotions are given out a few years into being at the company, and are not given out to the top performing employees. There is nothing distinguishing top  performing employees  from low performing employees, subsequently  causing top performers to quit and low performers to stay on.  To alleviate the high turnover rate, it may make sense to take the following steps:  Investigate current promotion process, make promotions accessible to top performers, and/or be sure to reward top performers to distinguish them from low performers.

 

 

Github:

https://github.com/LaurenTomlinson/Python_Project_1

 

References

 

http://www.deltapeo.com/wp-content/uploads/2021/03/Turnover-%E2%80%98Tsunami-Expected-Once-Pandemic-Ends.pdf

Dataset:  https://www.kaggle.com/datasets/marikastewart/employee-turnover

About Author

laurentomlinson

Master's student studying Bioinformatics at NYU with a passion for Data Science
View all posts by laurentomlinson >

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