Attrition occurs when there’s a reduction in the workforce, and the company does not address or replace this loss immediately.
Attrition is an inevitable part of every company. Employees leave for personal reasons or move to greener pastures. Some factors are beyond your control, such as employee retirement, leaving to study further, relocation, and so on. However, if your employee leaves because of poor leadership, company culture, declining company health, or no professional growth, that is something you can address upon and make amends. To broadly classify the reasons:
Involuntary
- When the employee leaves for retirement or is terminated
- Retirement.
- Dismissal or Termination
- Death of the employee
Attrition |
Employee turnover |
---|---|
Attrition occurs as a part of a planned exit such as retirement or because of some personal reasons. |
Employee turnover occurs because of poor employee-company and employee-job fit, poor company culture, leadership and so on. |
Attrition openings are usually planned or informed beforehand. |
Employee turnover vacancies are unexpected because the issues are with the company. |
They are not filled in immediately |
The company issues need to be addressed, and the vacancies substituted immediately. |
Attrition rate measures the number of people who left the company when compared to the average number of employees in the company.
Formula: (No.of attritions/Average no.of employees over the year) x 100
For instance, in the year's start, if you have 100 employees, of which 20 employees leave. By the end of the year, you have 120 employees. As a result, the average number of employees in that year is:
(100+120)/2 = 110
Attrition rate= (20/110) x 100 = 18.1%
That is your attrition rate of your company.
Sometimes, attrition can benefit you in ways hitherto unknown to you. It can help you:
- Weed out the poor performers, paving way for better talent.
- Make space for a diverse work environment.
- Focus on employee-job and employee fit candidates.
- Bring in a unique perspective, with a diverse workforce.
Attrition is an indicator that your company is going through changes (good or bad). As a HR professional, it is important to identify the ill-effects of changes and curb the increasing attrition rate. At the same time, you need to ensure that you attract and retain talent who can help the company grow.
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