Avoiding Employee Attrition: What It Is and How to Stop It

There are various reasons why employees may choose to leave, but there are things you can do to try to keep them.


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Avoiding Employee Attrition: What It Is and How to Stop It
Having issues with employee turnover?

Ways to reduce employee attrition:

  • Recruit and hire the right people — don't rush the hiring process
  • Ensure your onboarding and training process is up to scratch
  • Stay competitive in the job market
  • Deal with toxic people and focus on company culture
  • Reward and acknowledge your employees

Everyone has heard the adage that it costs more to hire someone new than it does to retain the talent you already have. The reason everyone’s heard it is because it’s true. As Toggl explains, a recent study found that it costs an average of $7,645 for a company with 0 – 500 employees to hire someone. That’s a significant chunk of change, which is why attrition matters.

Maybe your small business is finally getting to the size where attrition matters. On the other hand, perhaps you’re simply looking to make a stellar hiring and retention plan straight out of the gate. Whatever the reason, this is your crash course on all things employee attrition.

What is employee attrition?

It always helps to have a crystal-clear understanding of a problem before tackling it. Employee attrition is generally understood as the natural process of employees leaving a job or the workforce as a whole without being replaced. However, it’s important to note that employee turnover and attrition are not the same things. Turnover is the process of replacing a worker who has left with someone else. Attrition happens when someone goes, and the vacancy they create remains unfilled, or the position is eliminated.

Employees generally leave when they are unhappy in the workplace or feel under-appreciated.

Turnover can happen at an increased rate on the company level when employees are dissatisfied or under-appreciated. Attrition can also occur on the workforce level when entire generations enter the retirement stage of their life.

For this article, though, we’re focusing on business-level employee attrition: Why workers leave a given job.

What does employee attrition mean for my business?

In general, a company’s attrition rate is a percentage derived from dividing the number of employees who leave by the total number of employees at a company and multiplying that answer by 100.

It’s helpful to choose a period to analyze and compare to other periods. For example, you can choose to calculate your attrition rate quarterly. That way, you can compare attrition rates by a quarter within the same year and previous quarters to get a sense of what’s happening and when.

Of course, everything varies by company, but it’s often accepted that a 10% attrition rate is considered “normal.” That means that if people are leaving your company at an 11% rate or higher, you might have a problem on your hands.

Generally, it’s normal to have around a 10% attrition rate.

A high attrition rate means more than problems for your bottom line when it comes to the cost of hiring and training replacements. But, when it comes down to it, your business’s attrition rate can tell you a lot about the happiness and satisfaction of your employees.

If your attrition rate is high, it signals that something is wrong, and now is not the time to guess why. Instead, you’ll want to use employee surveys, exit interviews, and the like to get a sense of where you’re failing your talent. Attrition can be due to anything from a lack of adequate pay and benefits to an unnecessarily rigid work environment that denies employees the flexibility they need to get through modern life.

How do I stop employee attrition?

It’s important to note that no business can completely stop employee attrition. Companies consist of people, and people leave jobs for all kinds of reasons that have nothing to do with their happiness or satisfaction. Leaving the workforce to care for children or moving to a new city for a partner’s career are examples of attrition that have nothing to do with the position.

However, especially if you have a particularly high attrition rate, you can strive to reduce it.

Hiring the right people

There are several ways that you can work to reduce attrition. First, start by recruiting and hiring the right people for the job. No matter what you do, if you hire people who can’t succeed at the company or in the role, you’re going to see attrition.

Review your onboarding process and documents

If your onboarding process isn’t up to scratch, your new hires may leave.
Next, turn your attention to your onboarding process. Take a good look at your training process and materials to ensure that they’re correct, up to date, and all-encompassing. Even if you hire the right people,  without the right tools and information to succeed, there’s a good chance they’ll leave.

Staying competitive in the job market

One primary way to reduce attrition is by staying as competitive as possible in the job market. Offer the best salaries and benefits possible. Even when you’re a cash-strapped start-up, you can bring benefits like the option for remote work, flexible hours, and flexible PTO to the table.

Focus on company culture

You should also take your company culture seriously. Toxic employees can be hard to spot and deal with within the bounds of employment law, but it’s worth the effort. If coming to work every day is awful because your co-workers are insufferable, even the best benefits won’t keep you there in the long run.

Reward employees

Finally, reward and recognize your employees for the work they do. Employees are sure to search for another job if they feel a lack of appreciation, recognition, and upward mobility.

Ultimately, attrition reduction looks different at every business because the drivers of attrition are unique to each business. So first, work to get a solid handle on what’s causing people to leave. Then you’ll be able to adequately address the issue and see results.


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