Identifying Sources of Turnover Costs: A Segmental Approach

The author proposes an analytical framework for assessing the costs of various sources of salesforce turnover (promotions, voluntary leaving, firing, and uncontrollable turnover) for salespeople with given characteristics (age, tenure, education, etc.). The main costs of salesforce turnover are taken into account, especially the costs of separation, recruiting and selection, training, vacant territory, and skill differential, as well as operating costs. Because the proposed procedure can be applied to any subgroup of salespeople, managers can use it to select the salesforce segments that are the most promising in terms of cost savings and can design specific turnover-reducing programs for those segments. The procedure is illustrated with a case study.