Exploring High Turnover Rate in a Large US Company
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.
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.
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.