Everything You Need to Know About Employee Attrition

Turnover and employee attrition are often thought of as bad words in the recruitment and HR space. But there’s no use in denying that they happen—and they can’t be ignored if your company is facing unwanted employee attrition.

Keep reading to learn more about what employee attrition is, how it differs from turnover, and what you can do to control it.

What Is Employee Attrition?

Simply put, employee attrition is when an employee voluntarily leaves an organization and the organization chooses not to hire someone else in their place. This could be due to retirement, resignation, personal health, or more—the key defining factor is that, once the employee is gone, they are not replaced.

This can occur both at a company level or at a department or team level. When employee attrition occurs company-wide, it decreases the total number of employees at the company. At a department level, employee attrition may not be indicative of a net loss of overall employees, but rather just a decreased number for the specific department affected.

The Difference Between Employee Attrition and Turnover

While employee attrition and employee turnover are quite similar,— (and sometimes the terms are used interchangeably—), there is a difference between the two. 

Employee attrition measures employees leaving whose roles the organization does not backfill. Employee turnover, on the other hand, is the rate at which an organization fills the roles that employees leave. Unlike employee attrition, turnover takes into consideration all terminations—this means that if an employee is let go and the organization intends to replace them, it will count toward turnover, but not toward attrition.
This is an important distinction being that the reasons for employee attrition and turnover are very similar. That being said, organizations often view high employee turnover more negatively than high employee attrition, being that resources are allocated to hiring, onboarding, and training new employees to fill the vacant positions.

Reasons for Employee Attrition

Reasons behind employee attrition will vary depending on why the employee is leaving and/or why the organization is opting not to fill the position.

Involuntary Attrition

Involuntary employee attrition occurs when the organization chooses to let the employee go. Because the company is opting not to replace the employee, this is typically seen in the form of a position being eliminated entirely or company layoffs. Often these changes are made with financial considerations in mind.

Voluntary Attrition

Voluntary employee attrition occurs when the employee chooses to leave the company, such as by changing jobs or career paths. While this type of loss is often associated with turnover, there are instances where a company will choose not to replace an employee who has left willingly. 

Retirement

A subset of voluntary attrition, retirement is a natural form of employee attrition. Typically, this type of employee attrition won’t have a major impact on the organization—however, if a large portion of the organization or a specific department retires around the same time, this may create additional challenges.

How To Control Employee Attrition

Employee attrition is not always unexpected or unwanted—but when it is, it can demoralize the team and negatively impact productivity. Luckily, there are methods you and your team can adopt for helping to prevent employee attrition. 

When it comes to addressing the first component of employee attrition—an employee leaving—you’ll want to ensure you’ve done what you can to make your organization an attractive place to stay, including: 

Offering Career Paths and Mentorship

Once you do get the right employee in the door, you want to ensure they feel valued. Employees want to know they are at an organization where they can grow. Ensure that they have transparent info about career paths and set up mentorship opportunities if possible.

Weighing Your Long and Short-Term Strategies

No one wants to feel that their role is redundant, and no company wants to pay an employee that isn’t adding value to the team. While you can’t predict the future and sometimes a role is no longer needed, taking careful stock of where you are now vs. where you want to go can help you avoid unnecessary hires. And that will help prevent unwanted employee attrition. 

Hiring the Right Fit with Smart Recruitment Software

Preventing employee attrition starts with hiring employees that are the right fit at the start of the recruitment process. One of the ways AI-powered recruitment software, like PandoLogic, is effective in helping to prevent employee turnover is by making sure the role you are hiring for is placed in front of qualified candidates at the start of the recruitment process. This takes the guesswork out of job ad placement strategy and sets you up on a path for hiring the right employee.

By using these key tactics, you can start preventing attrition and retaining your valuable employees. And remember—keeping the right employees starts with hiring the right candidates in the first place.

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