Compare and Contrast the Relationship between Turnover and Business Size in Two Different Business Sectors Subject


Compareand Contrast the Relationship between Turnover and Business Size inTwo Different Business Sectors


Compareand Contrast the Relationship between Turnover and Business Size inTwo Different Business Sectors

Thereport seeks to compare and contrast the relationship betweenturnover and business size in two different sectors. This reportfocuses on banking and insurance business sectors. The data used foranalysis is gathered from the FAME (Financial Analysis Made Easy)database. The FAME database presents financial information on bothprivate and public companies in UK and Irish. The informationavailable on this database includes the company profiles, turnover,ratios and trends as well as shareholder details. Important to thispaper is the turnover in the 20 companies in the different businesssectors. According to this analysis, a strong relationship isexpected between the turnover and business in the banking sector ascompared to the insurance sector.


Thebanking and insurance sectors experiences turnovers though at arelatively contrasting rates. The banking sector experiences arelatively high turnover as compared to insurance sector given thesize of the banking sector which is relatively larger than theinsurance. In both the banking and insurance sectors the relationshipbetween turnover and business size is very clear given the variablesthat lead to them. Additionally, we are able to contrast and comparethe two industries owing to the difference in the turnover ratiosthey have. Both sectors have experienced increased competition andgrowth thus putting their workers at choice of the best employer.

Also,the insurance and banking sectors are rising rapidly in growth andopportunities offered to the employees. Both the sectors are humanintensive areas and thus human resources are with no doubt adifferentiator (Harter, Schmidt &amp Hayes, 2002). Therefore,quality workforce and its retention is a yardstick.

Eachof the sectors has their own characteristics and variables that leadto turnover. Usually, the more established sectors are characterizedwith high turnover rates as compared to less established sectors andbusinesses (Harter, Schmidt &amp Hayes, 2002). Thus, the larger thebusiness in terms of size dictated by employee numbers the higher theturnovers. Owing to the high number of employees and being large insize, the banking sector experiences high turnover than the insurancesector.

Methodsof Analysis

Incarrying out my analysis, data was entered, edited and analyzed usingMicrosoft excel by applying the correlation technique. The analysisdone by use of correlation assists in checking the relationship ofthe observed variables with each other. Correlation establisheswhether there is perfect covariance between a variable, for example,turnover and another variable, business size. Thus, the levels ofsignificance of the relationships are defined (Martin Bland &ampAltman, 1986). The correlation value or coefficient that is greaterthan 0.5 is generally said to be significant while those less than0.5 are said to be insignificant (Martin Bland &amp Altman, 1986). Correlation values can be such that -1 &lt r &lt +1 (Martin Bland &ampAltman, 1986). Where the + and – signs are used for positivelinear correlations and negative linear correlations, respectively.In situations where there is no correlation or a weak correlationoccurs the values of the coefficients are close to zero (0). Thusthere is a random and non-linear relationship between the variablesobserved.

Resultsand Conclusion

Accordingto the results, there is a significant correlation between theturnover of the banking sector and the recent number of employeesthat they have. The level of significance is relatively high inbanking sector compared to that in the insurance industry. Thecorrelation coefficient of the banking sector stands at 0.876 ascompared to the insurance at 0.575. Therefore, the number ofemployees in each of the sector has an impact on the turnover levelswith the higher the number of recent employees in a sector leading tohigher turnover and the lower the number of employees, the lower theturnover levels (Harter, Schmidt &amp Hayes, 2002). The resultsportrayed from our study are a true reflection of the expectedoutcome.

Generallya larger business in terms of size is expected to have high turnoveras they engage more productive employees in undertaking various rolesin their chains of work as compared to smaller business (Harter,Schmidt &amp Hayes, 2002). The size in our case is determined by thenumber of employees that are engaged by the company at any giventime.


Harter,J. K., Schmidt, F. L., &amp Hayes, T. L. 2002. Business-unit-levelrelationship between employee satisfaction, employee engagement, andbusiness outcomes: a meta-analysis. Journal of applied psychology,87(2), 268.

MartinBland, J., &amp Altman, D. 1986. Statistical methods for assessingagreement between two methods of clinical measurement. The lancet,327(8476), 307-310.