One way is for employers to look for signs of unhappy employees and address their concerns early to prevent their departure.īack to top What is a high attrition rate?Ī high attrition rate indicates employees are leaving faster than employers are hiring. No matter the cause of attrition, employers will continue to face increasing employee attrition unless they take measures to stop it. Personal reasons (such as domestic or health issues).Limited growth and development opportunities.Typical causes of employee attrition include: Instead, companies should examine the voluntary reasons employees depart their organizations, as they could provide a more precise understanding of why they left and why those positions may be hard to fill. However, attrition due to layoffs or company restructuring may also be a natural occurrence as companies learn to be more productive with less-such as leveraging machine automation to handle rote, repetitive tasks. For example, employee retirement or relocation are examples of attrition beyond the company’s control. There are several causes of attrition, many of which are natural and not necessarily negative. Alternatively, a high rate could mean the company is at risk of downsizing or losing institutional knowledge from employees leaving.īack to top What are the causes of attrition? For example, a relatively low or consistently stable rate could indicate that an employer is poised for growth as they retain a set of key employees contributing to their overall success. Along with other workforce and recruitment metrics, attrition rate is among the most critical metrics for HR teams to track.Ĭompanies use attrition rates to track the overall health of their organization. With such data, companies can pinpoint areas suffering from inefficiencies and implement corrective actions.Īttrition rate measures the pace at which employees leave a company for voluntary reasons - such as resignation, retirement, or relocation - or involuntary reasons - such as discharges, layoffs, or eliminated positions. Software can also calculate and track other workforce analytics, like cost per hire, time to fill, and retention rates. Solutions like BambooHR can show companies their most prevalent reasons for termination, the departments that experienced the most employee departures, and even the direct manager with the most employee separations. For example, organizations can track attrition rate and layer it against other metrics, such as employee engagement and performance metrics, to look for causes of attrition. Moreover, software can provide more granular insights into employee departures. For example, many all-in-one human resources (HR) software platforms can combine hiring and termination data to provide meaningful insights on areas of the organization that need improvement. Instead of resorting to manual methods of calculating attrition rates, companies can use software to automatically calculate and track the rates over time. Number of total employees at the beginning of the time period:īack to top Workforce analytics software automates attrition monitoring By doing so, companies can implement effective measures to retain their employees, create a stable and motivated workforce, and set themselves up for continued growth.Ĭheck out our HR Software Guide for solutions to begin tracking your company’s attrition rate.Īttrition rate calculator Number of employees who left and weren’t replaced: Considering 96% of workers are looking for a new job, according to a 2022 survey, it is critical for employers to examine their workforce data to understand why - starting with attrition rate.Ĭalculating attrition rate over time provides companies with a macro-view of the factors driving employee departure. While attrition is normal, an abnormally high number of employees leaving could indicate something more serious, such as stagnating company growth. If your company has a high attrition rate, your HR team may need to reevaluate its people strategy to prevent the company from stagnating.Īttrition occurs when a company’s workforce shrinks over time because employees leave and aren’t replaced.Attrition rate = (the number of employees who left a company and weren’t replaced / the number of employees at the beginning of a specific time period) x 100.Employee attrition rate measures how many employees leave a company (and their positions remain unfilled) within a set period.
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