Are your employees consistently heading out the door and never coming back? You might be facing high volumes of employee attrition.
Like it or not, employee attrition is at an all-time high and employees are leaving their workplaces faster than ever.
Whether people are retiring, resigning, or being laid off, employee attrition is something any company needs to minimise (if not downright avoid) if they want to be successful.
Preventing employee attrition and understanding its causes is essential. In this article, we’ll cover the basics of this phenomenon and explore:
- The four types of employee attrition and their characteristics
- Why preventing employee attrition is important
- Employee disengagement, its role in promoting attrition, and its warning signs
- Nine strategies to prevent or manage employee attrition.
Learn more below.
What is employee attrition?
Employee attrition occurs when a workplace diminishes in size due to employees leaving.
While this might not sound like a good thing, healthy levels of employee attrition are natural and happen over time; it’s something that every workplace will inevitably experience.
Unavoidable factors play a role in this phenomenon, such as employees retiring or quitting their jobs for personal or professional reasons. Although employee attrition occurs gradually, it’s important to remember that this is also mostly deliberate.
A related concept is employee turnover, though the two concepts shouldn’t be confused. Employee attrition is more of a one-sided decision and typically occurs when employees quit without being replaced.
Another term for this phenomenon is “hiring freeze”, and it’s also sometimes a tactic used by companies to save on labour costs.
4 types of employee attrition
Knowing the exact type of employee attrition that is most prevalent in your company will help you to design a more thoughtful strategy to counteract the phenomenon’s most adverse effects.
If a large number of employees retire from a workplace in a short amount of time, this can cause attrition.
Also known as natural attrition, retirement is inevitable in any workplace. However, do keep in mind that retirement doesn’t always occur due to age; employees can retire early, and companies need to be prepared for this.
When internal attrition occurs, employees aren’t leaving the company — they’re just moving within it.
Let’s say an employee has been promoted and has to leave their department to join another. That’s a classic example of internal attrition.
Internal attrition can be either a choice of management or of the employees themselves. Maybe management believes an employee is a better fit at another department, or perhaps the employee wants to give another role a shot.
Do keep in mind that if a specific department experiences high attrition, then there might be an underlying issue that requires your further attention.
Another type of attrition occurs due to voluntary resignation, which happens when employees leave their jobs simply because they want to.
As the most common type of attrition, voluntary resignation occurs for plenty of reasons. These include employees getting another job, moving to a different city, or changing careers.
Are too many employees calling it quits? While the good news is that this is mostly in your control. high volumes of voluntary resignations can be a sign that there are significant problems within your company.
Involuntary resignation is when companies lay off employees due to employee misconduct or structural reasons.
For instance, if a business has just been bought by another company, it's possible that a lot of employee positions are considered redundant and need to be eliminated.
The Importance of Preventing Employee Attrition
If employee attrition is a normal part of business life, why is it so important to prevent it?
High attrition rates are a threat to any business as they can result in the loss of money and valuable talent, as well as cause damage to the company’s reputation.
Additionally, high attrition rates are difficult to overcome, challenging to manage, and can take a serious toll on the well-being of any workplace. As such, it becomes extremely important to prevent it!
Signs of Employee Disengagement
Employee disengagement, as the name implies, occurs when team members aren’t excited about their work, are demotivated about and actively avoid putting in their usual effort, and radiate indifference about their job.
Recognizing the signs of disengagement in your employees is a key step to preventing high attrition rates. Be on the lookout for:
- Lack of motivation. Are your employees (particularly former top performers) not giving their 100%?
- High absenteeism. Is an employee calling in sick or taking too many days off in recent weeks or months?
- Poor quality of work. Has your top performer become your lowest? Have you noticed that a significant number of your employees have been putting in the bare minimum?
- Taking too many breaks. Is an employee taking too many, often unnecessary breaks?
- Low engagement with the team. Is an employee missing too many social activities, preferring to spend time by themselves?
How to Prevent Employee Attrition
By now, you’ll hopefully have a good idea of the prevailing forms of employee attrition in your company, as well as identified employees that are showing signs of disengagement in the workplace.
So, onto the golden question: What can you do to prevent attrition?
1. Offer Career Advancement Opportunities
Did you know that 63% of employees in the US quit their jobs because of a lack of career advancement?
Employees want to grow and develop in their roles and not just be stuck in a role of sameness (which, let’s admit, can quickly get monotonous).
A great way to prevent employee attrition is to offer opportunities for career advancement that are competitive and on par with similar roles in the market.
You can do this by creating clear promotion pathways, coaching and upskilling, and hiring from within.
2. Cultivate a Positive and Inclusive Workplace Culture
To prevent attrition, you need to take a long hard look at your workplace culture first.
Employees want to work in a positive work culture and want to feel included. If your workplace culture doesn’t agree with the employee, extinguishes and discourages employee involvement, or presents a callous and indifferent attitude, then it’s unsurprising that many will be heading out the door.
3. Provide Competitive Salary and Benefits Packages
While money isn’t everything, it does matter.
If you’re paying below market rates, that’s often a good enough reason for voluntary attrition – particularly for employees who feel they deserve better or really need more financial opportunities.
Make sure you’re providing a competitive salary that’s complemented by attractive benefits if you want to avoid attrition!
4. Grant Employees Autonomy
Are you micromanaging your employees? Micromanagement stifles creativity and provides a suffocating atmosphere where no one grows and thrives.
Many employees want to leave because they feel that they have no autonomy. An easy way to grant employees autonomy is by giving them more freedom, such as offering hybrid work or allowing them flexibility in their working hours.
5. Select Effective Leaders
Who’s in charge of your employees? Leadership can make a huge impact on the experiences employees have, especially because nobody thrives under a bad boss.
Make sure managers and leaders can establish clear expectations, deliver constructive criticism, and effectively manage teams if you want to minimise attrition.
6. Maintain Open and Frequent Communication
It’s a well-known fact that organisations that communicate effectively are about 4.5x more likely to retain the best employees.
Take a cue from the data and ensure that you’re maintaining open and frequent communication with managers and employees if you want to reduce attrition!
7. Establish Attainable Goals and Expectations
When employees don't have clear expectations about their jobs, this can lead to high attrition rates.
Prioritise the establishment of attainable goals and expectations before hiring new employees.
This way, they will be 100% clear on what’s expected of them before committing to a role with your organisation.
This also works wonders in motivating your existing team. By setting reasonable, time-bound goals and communicating expectations surrounding tasks and responsibilities, your team will feel more involved in the outcome and growth of the company.
8. Equip Employees with Effective Training and Tools
Do your employees have everything they need to succeed in their roles? Yet another cause of employee attrition is a lack of effective training and tools.
You need to equip employees with all the tools and training they need to do their jobs properly. Effective coaching plays a big role in this, and you can never go wrong with providing additional upskilling workshops to expand your employees’ skill repertoire.
9. Provide Guidance and Recognition
Who doesn’t like to feel valued and appreciated?
Research shows that employees who don’t feel recognised are more likely to look for another job.
Employee recognition increases engagement and productivity, so put in the work and start making a conscious effort to recognise your employees’ awesome work!
The Bottom Line
Employees come and go — there’s simply no avoiding that — but too much of it can seriously affect your business.
After reading this article, you now should know the basics of employee attrition and, most importantly, why you need to prevent it and how.
Although employee attrition is unavoidable, you’re far from doomed; there are plenty of ways to effectively reduce its impact, after all.
Utilising the strategies we’ve discussed above might just be the key to preventing and minimising the effects of attrition in your company!
The opinions on this page are for general information purposes only and do not constitute legal advice on which you should rely.