Attrition Rate

Category: HR KPIs.

As much as some companies love to change overnight for various reasons, people leaving the company is never a good change to embrace. As an employer, people leaving your firm for a better job could cost you time and effort in bringing somebody to fill in the empty slot. When people tend to leave the company, it means that you are either not providing them space to expand their ideas – or just simply, their salary is not enough.

However, acquiring new talents is costly – both in money and time. Recruiters may have some headaches from going through the process of prospecting for other employees. Getting back to the attrition rate, this can be calculated efficiently once every year.

Attrition Rate Calculation

To calculate the attrition rate, you first need to know the exact number of attritions (former employees that left that particular year). After this, you’ll need to know the average number of employees – including the ones who left.

Once you got the number, simply divide the number of attritions with the average number and employees and multiply the result by 100. Go get a better view, the calculation should look like this:

Number of AttritionsAverage Number of Employees X 100
Attrition Rate

Attrition Rate Facts

Worldwide, a huge number of people are already thinking of abandoning their positions in search for a better one. As a matter of fact, the US has a mind-blowing 23% rate of people that wish to quit their present job to search for a better one.

This attrition rate is the result of some demographic issues. Almost all young and talented people tend to change their jobs more frequently than older people. With this being said, the workforce of some companies consists of people over 40 years old. Let’s take China, for example. The one child per family rule is taking a toll on every company there – and as people are aging, the companies are left with old workers.

Some studies made on 730 managers from different organizations worldwide say that attrition affects all countries differently. In the United States, all attritions happen to young people below the age of 25. Even so, attrition happens to mid-level employees and then by managing teams as well.

In Europe, the most severe attrition cases happen in the IT domain, although managers tend to say that attrition does not affect the productivity of their companies whatsoever.

At the same time, managers have agreed that all cases of attrition happen for 3 reasons. All employees wish to have better benefits and compensations when they exceed the manager’s expectations. The following 2 reasons are as expected. Some companies provide feedback for employees to grow in knowledge – but very few employers give a chance for the employee to promote.

And the last one is a ringing bell for all the managers, as every employee deserves recognition for its work. Plus, the managers are trying to compensate for that lost balance between work and life – and this is highly disregarded in many companies.

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