Employee Turnover vs. Attrition Rate: What You Need to Know

Can you believe that as many as 85% of people don’t like their current jobs?

Job satisfaction plays a huge role in a company’s long-term success, which is why it’s always important to invest in your employees. It costs a lot of money to advertise new job openings, screen applicants, and train new employees on a regular basis.

If you’re trying to run a lucrative business, then it’s helpful to keep an eye on your turnover and attrition rate to monitor your progress. Read on so you can learn more about what each figure represents and why they’re useful calculations.

What Is a Turnover Rate?

A turnover rate is the percentage that explains how many employees leave your business that need to be replaced. Turnover can apply to employees who quit to pursue other career opportunities and those who get fired as well. Either way, a company has to invest valuable resources to fill those positions.

There’s a simple equation that you can use to figure out your company’s turnover rate. All you need to do is divide the number of employees who leave by the number of positions your business has and multiply that figure by 100.

For example, if 10 people leave your business that has 100 positions, then your turnover rate would be 10%. This would be considered a low turnover rate compared to other industries like retail where as many as 60% of people quit.

What Is an Attrition Rate?

Employee attrition can often get confused with employee turnover because there are some similarities. Both rates deal with the number of employees who leave a company, but there is a key difference. Employee attrition represents the number of people who leave but won’t get replaced.

When an employee quits or gets fired, some business owners realize that they can continue to work as usual without replacing their position. If there are five employees who have the same responsibilities in the company, then the show can still go on after losing one.

Employee attrition doesn’t carry the same negative energy as turnover does. While downsizing does sound like the opposite of progression, this could also just mean that a company is becoming more efficient while using fewer resources.

How Can You Keep Valuable Employees Around?

Unless you’re striving to downsize, your goal should be to keep your best employees around for the long run. The easiest way to accomplish this is to offer competitive employee benefits that will make them feel valued.

There are plenty of other meaningful gestures you can do. Employee recognition programs work wonders for boosting both morale and productivity. You can also consider offering telecommuting or creating an amazing break room.

Your Turnover and Attrition Rate Matters

As you can see, it’s important to pay attention to your turnover and attrition rate. After reading this guide, you can look forward to boosting your company’s success.

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