Problem
In this business scenario we have a company that is analyzing how often they have to replace their staff every year, or in other words calculate their annual employee turnover rate. Departed employees/([beginning employees + ending employees]/2)=annual employee turnover rate. This company ends Year 1 with 110 employees, Year 2 with 115, Year 3 with 130, and Year 4 with 140. This company also has 56 employees leave in Year 2, 67 employees leave in Year 3, and 81 employees leave in Year 4. By using the formula above we have an annual employee turnover rate of 49.7% in Year 2, 54.7% in Year 3, and 60% in Year 4.
As we can see from the statistics there is an increase in employee turnover by about 5% every year. There are two ways the company can reduce their turnover rate. The first way is to increase hiring. To do that they can use probability to estimate how many employees will leave in Year 5, which in turn will tell them how many employees they will need to hire to achieve their desired turnover rate. On average there is an 18.5% increase in employees leaving annually ([67-56]/56=.196, [81-67]/81=.173, [.196+.173]/2=.185) meaning 96 employees are estimated to leave in Year 5 (81*1.185=95.9). If the company were to maintain their turnover rate of 60% they will need to hire 136 employees so they will end the year with 180 employees.
The second way is to decrease the amount of employees departing. This isn't a math solution, it just takes the company identifying why employees are leaving (maybe from exit interviews, or employee satisfaction surveys) and fixing the issues so that less employees will want to leave.
How would I respond in a way that professionally supports or challenges the discourse. I am stuck.