In a prior post we talked about why retro-terms or retro-hires were used to communicate how head count was changing. It adds some complexity to understanding your workforce, but it’s vital to understanding how numbers can change over time. When someone terminates it should be pretty simple, but unfortunately, it’s not because of concepts like retro-terms. In this post we will explore the difference between terminations and total terminations and how they are related.
I’ll cut to the chase and talk about total terminations first. Total terminations combines terminations and retro-terms using the following formula:
Total Terminations = terminations + retro-terms
Total terminations combines these two metrics to give you the big picture of all terminations. It shows you an important relationship between terminations and retro-terms that may have been missed if you just stopped at total terminations. Another important property of Terminations and retro-terms is they DO NOT overlap. Quite simply an employee cannot be both a termination and a retro term. If they were then we’d count that employee twice in total terminations.
Another important difference between terminations and retro-terms is stability. Terminations are stable which means terminations will not change after the end of the month has been reached. So one April 1st the terminations for March will never change. Retro-terms are unstable. They can change in the future. This also means Total Terminations is also unstable. If you run a report in April for the Total Terminations in March you might see 5, but when you run that same report for March in May it could change to 7.
Now we may need to give you a more definitive definition of what it means to be a termination. Terminations are tracked by action codes and action mappings to our standard set of codes. If something is labeled as a termination then it’s counted as such, but when was that termination realized can change it from a termination to a retro-term. Therefore, there are two dates you have to consider.
- The Effective Termination Date
- The Date when the termination date was entered
The termination date tells us what month the termination or retro-term will be assigned. The rules are the following:
- If the termination date was entered BEFORE the end of the month then it is a termination.
- If the termination date was entered AFTER the end of the month then it is a retro-term.
Let us look at an example:
|Employee Number||Action||Effective Termination Date||Valid From||Termination||Retro-Termination|
In the table above we have 3 employees that terminated in March 2019. We see the effective termination date of the employee that occurs in March, and then we see the valid from date which tells us when the effective termination date was entered. For employee 1001 we see that both effective termination date and valid from date occurs in March. This makes it a termination and it would be counted in the termination metric.
The next employee 1002 has an effective termination in March, but the valid from is in Feb. Valid From is before the end of the month (i.e. 02/22 < 03/31) so it would be counted as a termination too. Finally, employee 1003 was terminated in March, but it wasn't entered until after the end of March (i.e. 04/15 > 03/31). Therefore, it is counted as a retro-term for March.
So if we look at an analysis of March 2019 we would see the following for that data:
|Date||Termination||Reto Term||Total Termination|
All of these terminations are calculated in total terminations, but termination and retro-term are the two subsets of total termination that follow this logic.