What Is Attrition Vs Turnover? (Employee Attrition)
What Is Attrition Vs Turnover? (Employee Attrition). Attrition includes voluntary and involuntary departures, while turnover only includes voluntary ones. For example, if an employee is fired or laid off, your organization should count it as attrition. But, if the employee quits of their own accord, it’s considered a turnover. Kamerpower.com
Attrition is an inevitable component of running a business. An employee will eventually desire to quit your organization for personal or professional reasons.
Employee attrition is defined as the natural process by which employees leave the workforce, for example, through resignation for personal reasons or retirement and are not immediately replaced. Some employees leave their job because they may have found a better job opportunity while others leave because they’re retiring.
What is employee attrition?
Employee attrition is the gradual reduction in employee numbers. Employee attrition happens when the size of your workforce diminishes over time. This means that employees are leaving faster than they are hired. Employees are leaving the workforce faster than they are hired, and it is often outside the employer’s control.
Employee attrition can happen for several reasons. These include unhappiness about employee benefits or the pay structure, a lack of employee development opportunities, and even poor conditions in the workplace.
What Is Employee Turnover?
Turnover is when employees leave a company voluntarily. It’s also known as “employee churn” and can be high in certain industries (such as retail) or during specific times of year (like after bonus season).
What are the types of employee attrition?
1. Internal attrition
With Internal attrition, employees are quitting their jobs in one department to join another department. In some cases, internal attrition is desirable, as it routes talent towards more profitable areas. It also ensures better employee-job fitment. But if a specific department has witnessed a high rate of attrition one year, it merits an investigation.
2. Involuntary attrition
Here, the firm, not the employee, is the one that starts the leave process. For instance, the worker may have engaged in workplace misconduct, a common cause of involuntary attrition. Attrition could also result from structural issues. A flurry of involuntary attrition frequently follows mergers and acquisitions.
3. Attrition due to retirement
If two or three people have retired from your company this year, this is statistically too small an employee group to count under attrition. However, if a sizable chunk of your workforce retires at the same time, this can cause attrition.
4. Demographic-specific attrition
This is a significant concern for progressive companies trying to build an equal-opportunities workplace. Demographic-specific attrition means that employees from a single group – women, ethnic minorities, people with disabilities, veterans, or older professionals – are leaving the company in droves.
5. Voluntary attrition
Voluntary attrition happens when an employee decides to leave the company. That is when employees decide to simply quit their jobs. There can be many reasons for voluntary attrition. Common reasons for voluntary attrition include: Moving across the country to be with family and loved ones. Accepting a new job offer. Making a career change.
What Are Employee Attrition Causes?
1. Poor work-life balance
When employees feel as though they have a positive work-life balance, they’ll enjoy greater job satisfaction. As a result, they are more likely to stay at their company. Having a balance between work life and home life makes people happy and promotes mental well-being and mental fitness.
2. Poor workplace culture
Workplace culture has a resounding effect on employee attrition. Every company has its own set of rules, attitudes, and core values that make up its unique company culture. If the culture doesn’t resonate with an employee’s workplace values, they are more likely to leave.
3. Lack of employee motivation.
Workplace motivation affects how happy and driven an employee is to succeed in their role and responsibilities. There are many benefits to a motivated team. Having motivated employees reduces absenteeism and increases employee retention.
4. Minimal unemployment.
Even if you wanted to, you might be unable to replace departing staff if your industry or region has low unemployment rates. You can let the posts go unfilled (attrition), lower your hiring standards, or broaden your search.
5. Poor job satisfaction and pay.
Job satisfaction and pay often go hand-in-hand. While employee satisfaction isn’t only about how much an employee is paid, few employees will be happy at their job without a competitive salary. For many people, their wages have not kept up with inflation, their expectations, or both. Pay isn’t only the amount of money an employee gets to take home at the end of every month. It’s also measured by things like bonuses, annual increases, and other financial incentives. These all contribute to financial security, which is an important part of financial wellness.
6. Toxic workplace.
It may be difficult to fill roles if your company is unpleasant for current employees. Although you may want to reduce your attrition rate, you may find it difficult when employees depart rapidly, and word of your company’s toxic workplace culture spreads. If your attrition rate is high, this is one of the first things you want to consider.
What Is Employee Attrition Rate?
Attrition Rate = Number of Attritions/Average Number of Employees x 100
Calculating a company’s employee attrition rate:
- Find the average number of employees.
- Consider the number of employees who left unfilled positions over the course of a particular month.
- Then multiply this by 100.
What Are The Causes of Employee turnover?
1. Training and development.
A high turnover rate can also indicate that your company is not providing adequate training and development opportunities. This can leave employees feeling frustrated or undervalued.
2. Lack of benefits.
Money alone doesn’t buy happiness for your employees. Today’s workforce prefers hybrid work, which supports a healthier work-life balance. Hybrid work models are quickly becoming the future, and employers who don’t offer it as an option will likely lose employees to companies that do.
3. Employee satisfaction.
If you have a high turnover rate, it may indicate that employees are unhappy with their jobs. This could be due to various factors, such as poor management, low pay, or a toxic work environment.
4. Company culture
If your turnover rate is high, it could be a sign that your company culture is not aligning with your employees’ values. This can make it challenging to attract and retain top talent.
Best ways to control employee attrition
1. Ask for and give feedback
Employees that feel heard also feel appreciated. Actively asking for feedback and supplying it that is, in a positive, constructive way boosts employee satisfaction.
2. Conduct thorough exit surveys
Conducting thorough exit interviews provides greater insight into why an employee is leaving and what didn’t work. It’s the ultimate way of learning from mistakes and bringing insights to leaders to rectify the issues so that they don’t reoccur.
3. Focus on employee well-being
Employee wellness has a major impact on every business. Looking after employees can transform their lives and make them happier, more productive, and less stressed.
4. Offer training and development programs
Promoting professional growth is important, and employees who feel the company has invested in them are less likely to leave.
5. Contribute to career growth and planning.
Investing in employees’ futures and facilitating growth promotes loyalty and reduces turnover. Creating a career plan that includes the company highlights an employee’s future if they remain on board.
6. Ensure employee recognition
Employees want to know they’re appreciated and that their hard work is seen and recognized. Meaningful recognition boosts employee morale and drives employee engagement. Engaged employees are less likely to look for alternative job opportunities.
7. Ensure proper employee benefits
Employees want more than just a paycheck. They want benefits and perks that add real value to their lives. The most sought-after benefits include: Disability and life insurance. Flexible and remote working options. Health insurance. Paid time off.
8. Create flexible work models to keep valued talent engaged in some capacity
Remote work has changed how we view working hours. Creating a flexible working model can also reduce attrition if you apply some creativity. For example, you can keep older workers on part-time as mentors or trainers.