The employee attrition rate is the percentage of employees that leave their job voluntarily (quitting) or are terminated by their employer. It is a key indicator of employee satisfaction and overall job performance.

What is Employee Attrition Rate?

The employee attrition rate is the percentage of employees who leave the company in a given time period. It is calculated as the number of employees who left the company during a given time period divided by the total number of employees at the start of that time period. 

For example, if there were 100 employees at the start of a month and five left during that month, then your employee attrition rate would be 5%. The exact definition varies depending on who you ask. 

For some, it's a measurement of the number of people who leave every year, while for others it's the number who leave within a specific time frame. In general, employee attrition rates are calculated as follows:

Number of employees that left in a given time period (e.g., month, quarter) / Number of employees that were at the company at the beginning of that same time period

Test this: Employee Satisfaction Survey Template

Types of Attrition

Employee Attrition Rate is the number of employees who leave a company divided by the number of employees. It is expressed as a percentage.

There are several types of attrition:

  1. Voluntary turnover: Employees leave voluntarily due to dissatisfaction with their jobs or an opportunity elsewhere. This type of attrition typically occurs in organizations that don't treat employees well.
  2. Involuntary turnover: Employees leave involuntarily because they are fired or laid off due to poor performance or lack of work. This type of attrition typically occurs in organizations that aren't running efficiently and have too many employees for the amount of work available.
  3. Retirement: Employees retire from their jobs after reaching retirement age, which varies from country to country but is usually 65 years old in the United States and Canada (although it's increasing).
Learn: How to Conduct an Employee Performance Appraisal

What’s the Difference Between Attrition and Turnover?

Attrition and turnover refer to the same thing: employee turnover. But they each have different definitions, and both of them are useful for tracking your company's rate of employee retention.

Attrition refers to employees who leave their jobs because of retirement or disability. For example, if an employee retires after 20 years at your company, that's an attrition event. You can calculate attrition rates by dividing the total number of employees who left the company by the total number of employees who started working there during a given period.

Turnover is another term for voluntary termination when an employee voluntarily leaves their job with no intent to return. Voluntary terminations include resignations, layoffs due to downsizing or restructuring initiatives, retirements due to age or health-related issues (such as physically demanding jobs), and terminations due to misconduct (sexual harassment).

Use this: Free Employee Training Form Template

Turnover also includes involuntary terminations when an employer forces an employee out through some type of termination process (such as firing or layoff). 

The attrition rate can be calculated by dividing the number of employees who left a company by the total number of employees at that company in a given period of time (usually one year). The turnover rate is calculated by dividing the number of employees who left their jobs during that time period by the total workforce during that time period.

Attrition can be caused by many factors: economic conditions, loyalty to employees, company culture, and more. It's important to understand why employees are leaving so you can make improvements in those areas.

Test this: Employee Satisfaction Survey Template 

What is A ‘High’ Employee Attrition Rate? 

A high employee attrition rate is when you lose more than 10% of your employees each year. This can lead to many problems, including the need for more training and higher turnover costs. But high turnover doesn’t always mean there are problems with your company culture or management style sometimes it just means that your industry is particularly competitive.

If you want to retain your best employees, you should ask yourself why they’re leaving and what you can do about it.

Pros & Cons of High Employee Attrition Rates

Pros:

  • Low turnover allows companies to focus on retaining top performers rather than constantly replacing them with new hires who may or may not work out well in the long run.

Cons:

  • -High turnover rates can cause problems for companies because it takes time for managers to find replacements for each position that becomes vacant. In addition, high turnover can drive up training expenses due to the need for new employees who require training before they become productive members of the organization's workforce."
You may need this: Employee Evaluation Form Template

Factors & Causes of a High Employee Attrition Rate

A high employee attrition rate can be a sign of deeper problems in your company. If you want to avoid losing employees, here are some of the causes and factors of a high employee attrition rate:

  1. Lack of Employee Engagement: Employees who feel like they're not being heard, cared for, or respected by their employer tend to feel disengaged and less likely to stay with the company.
  2. Lack of Training and Development Opportunities: If your employees don't feel like they're being given the chance to grow professionally, they'll eventually find a job where they can get those opportunities elsewhere.
  3. Difficult Working Conditions: If you have an office that's too cold or too hot or if your equipment isn't working as it should be, it's hard to keep people around who are dealing with that kind of situation all day long.
  4. Poor Company Culture: When employees don't feel like they fit in at your company, they'll look elsewhere. This could be due to a number of things: maybe nobody talked to them when they started working there; maybe their work doesn't align with the values of your company; maybe everyone else seems super stressed out all the time. Whatever it is, it's likely affecting morale enough that people are looking for other options.
  5. Unreasonable workloads, especially for entry-level positions or new hires: If you have high turnover rates among your new hires there may be a need to look into how you delegate tasks.
  6. Low pay. Employees who are unhappy with their salary are more likely to leave, so it's important to pay attention to the salary data that your company shares with everyone on staff. If someone raises this issue with you, be sure to address it as soon as possible so that no one feels undervalued.

How to Reduce a Growing Attrition Rate

There are many reasons that employees may leave their jobs. One of the most common is the lack of opportunity for growth within their role or company. If your company is growing quickly and your employees feel like there aren't opportunities for advancement within their current role, they may be seeking more responsibility elsewhere.

Here are some strategies you can implement today:

  • Onboarding: Make sure new employees feel welcome from day one.
  • Offer more training opportunities for existing employees so they can grow into new roles within the company as needed - this will give them a sense of fulfillment and accomplishment while also helping them grow as individuals.
  • Use technology to reduce the amount of human intervention required in the hiring process, so that you can make more hires faster (and with less risk)
  • Make sure your managers are great managers and that they're getting the support they need to be great managers
  • Think about attrition as an opportunity for improvement on what can you do differently next time?

Conclusion

If you're working in a company with a growing attrition rate, it's important to understand what's causing employees to leave. You can't address the problem if you don't know what the problem is.

Finally, you can try increasing employee engagement by showing them how their work affects the bottom line of the company or its customers. This could mean taking an approach that focuses on team-building and collaboration; it could also mean focusing on diversity within teams and making sure everyone feels like they’re part of something larger than themselves.



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