Employers generally consider attrition a loss of valuable employees and talent. However, there is more to attrition than a shrinking workforce. As employees leave an organization, they take with them much-needed skills and qualifications that they developed during their tenure. On the other hand, junior professionals with promising qualifications can then succeed into higher level positions or business owners can introduce more diversity in experience or expertise. Accordingly, there are benefits and disadvantages to attrition.
Attrition and Turnover
There's one primary difference between attrition and turnover. Attrition the abandonment of a position due to retirement, resignation or other similar reasons. Therefore, attrition decreases the workforce, because there are no immediate replacements. Turnover, on the other hand, represents the number of employees who leave the organization, but with immediate replacements. Attrition is most often voluntary, while turnover can result from either voluntary resignation or an involuntary termination, discharge or layoff.
The cost of turnover can be extremely high, depending on the value of the employee's contributions as well as his salary, benefits and incentives. Cost-to-hire estimates, which include recruiting, training and ramp-up time, can become expensive. Additional cost include staff time for recruiters,employment specialists and hiring managers participating in the selection process. Turnover costs range from relatively small expenses, such as photocopies of employment applications and resumes, to large fees, such as headhunter fees and travel expenses for candidate interviews.
The cost of attrition can be relatively enormous. Attrition from retirement or resignation diminishes the workforce, demanding additional work hours and dedication from remaining employees. Whereas long-term workers have established bonds with customers and clients, attrition can reduce this rapport, running the risk of losing them to a competitor. Losing clientele affects revenue, profitability and business reputation.
Despite the negatives of attrition, healthy attrition -- or, desirable turnover -- can positively affect organizations. Losing employees with poor performance records can boost employee morale, employee engagement and productivity among the current workforce. Moreover, attrition can be encouraging to young professionals seeking promotion and upward mobility.
Employers use workforce planning to determine the timing and extent of employee attrition. Although employers avoid asking individual employees directly whether they intend to retire or resign soon, there are ways to determine which employees and how many are contemplating retirement. Conducting employee surveys is one method that can produce aggregate, though anonymous information about employee retirement. Employee inquiries about retirement savings and company contributions are other ways to detect future departures. Employers must be careful when asking employees about retirement plans, however. Inquiring about an employee's retirement plans may cause employees to allege unfair employment practices based on age.
- Trinity Integrated Solutions: Employee Attrition - The Silent Profit Killer!
- The Federal Coach: Curbing Attrition of Talented Federal Workers
- Alliance for Excellent Education: What Keeps Good Teachers in the Classroom? Understanding and Reducing Teacher Turnover; February 2008
- U.S. Fire Administration: Attrition Rate as It Relates to Employee Loyalty and Compensation; Roberto Rivera; March 1999
- Express Computer: Is Attrition Always Bad For an Organization?; Sudipta Dev
Reasons for Employee Attrition
When an employee decides to leave his current job voluntarily, it is called employee attrition. Employers do not like employee attrition, because...
Difference Between Attrition & Employee Turnover
Every business that hires employees has to deal with the fact that employees will always be coming and going. "Attrition" and "employee...
Retirement vs. Resignation
Retirement and resignation are both reasons that employees voluntarily leave their employment. Although retirement and resignation are acceptable reasons for an ...
Difference Between Functional & Dysfunctional Employee Turnover
Employee turnover is neither good nor bad in itself. What determines this is whether it is functional or dysfunctional turnover. Human resources...
The IRS Definition of Retirement
You are not permitted to begin withdrawing from a qualified retirement plan without incurring penalty from the IRS until you have reached...
Limitations of CRM
Customer relationship management are strategies that companies employ when dealing with customers. Many limitations with CRM solutions exist and overcoming these ...
The Disadvantages of Poor Time Management in Personal Life and Family Life
From TV and the Internet to daydreams, life is full of a million distractions that get in the way of accomplishing a...
How to Calculate Employee Attrition Rate
Employee attrition rate is also known as employee turnover. This rate shows how often the employees at a place of business change...
How to Do a Temporary Layoff
In dire financial times for a business, agency or organization, one solution is temporary layoffs. Temporary layoffs allow a company to reduce...
Types of Employee Turnover
At first glance, the phrase "employee turnover" has a negative connotation -- a stigma associated with an employer's obligation to reduce turnover...