- How to measure attrition rate of a company?
- How employers can reduce employee attrition rate
- Why is a low attrition rate crucial for jobseekers and employees?
Maintaining a low employee attrition rate is important to both employers and employees. But before we get into the depth of it all, let’s first understand the meaning of attrition rate.
Employee attrition rate is the pace at which employees resign from a company.
Attrition can be of 3 types:
- Voluntary in which an employee leaves a company on their own.
- Involuntary attrition is when the decides to let go of the employees of their duties and responsibilities.
- Internal attrition implies an employee switching to a different department, position and role within the same company.
With this basic understanding, let’s dive into understanding the importance of attrition rate for job seekers and companies, why it is important to have low attrition rate and how companies can reduce the same.
How to measure attrition rate of a company?
Before we start analyzing attrition rate, and find ways to reduce it, it is crucial to understand how the attrition rate of a company is measured.
So, how does one measure the attrition rates of a company? It’s simple!
The attrition rate formula follows as,
Attrition rate= (Number of separation/average number of employee)x100.
How employers can reduce employee attrition rate
Here are a few ways recruiters and employers can control employees calling it quits in frequent intervals.
Recruit the right talents
This is one of the most crucial tasks for a recruiter, finding the right talent.
As a recruiter, you need to have clarity about the company's culture and provide an honest answer to the candidate instead of sugar-coating facts.
For example, if a candidate enquires about the key responsibilities of the job role, provide all the facts and don't let the candidate be surprised after he/she joins the company.
Pay attention to complaints being raised
Turning a deaf ear to your employees’ complaints about a particular problem or not responding on time to them can lead to them feeling less and ending in their resignation.
A toxic work environment can affect not only an employee's performance at work, but to a larger part it can affect your company's reputation and business.
For example, sitting on a complaint about a problematic team member or managerial issue within a team can push the employee’s back to the wall and you will lose out on an important talent.
Reward and recognize efforts appropriately
Most common reason for a higher employee attrition rate is caused by the lack of proper appreciation and reward system.
As much as constructive feedback helps in an employee’s improvement, equal importance lies in feeling appreciated or applauded for a job well done.
Apart from this, ensure when providing appraisals and salaries offered are as per market standards.
Also, work towards a more dynamic review process between the employee and manager as it will help both to grow and encourage communication.
Define and develop corporate culture
Culture generally indicates the attitudes and beliefs that the company upholds and implements. This has a lasting effect on an employee and their work performance.
An unfavorable environment drains an employee, leading to constant burnout or subpar work performance.
Whereas a healthy and encouraging culture can encourage employees to not just put in their best efforts but also try out new techniques and approaches for better results.
Thus, to improve your employee attrition rate, focusing on developing and rectifying any loopholes in your company culture is one of the ways to go about it.
Analyze previous and current turnover to find issues
The most concrete way to go about reducing employee attrition rate is to collate and analyze the data related to turnover.
This will give you insights into the reason for employees departing and can help you rectify the issue and save your company from losing your best talents.
Standardize performance reviews
Appraisals play an important role in boosting an employee's motivation.
For example, even if an employee has work satisfaction in your company and has been performing well throughout but has not seen an appraisal, it will dampen their enthusiasm soon enough.
So, try to regularize annual reviews and appraisals as they provide employees with an encouragement to work harder.
Another factor that plays a crucial role in a high employee attrition rate is an infrequent or non-existent appraisal system.
Why is a low attrition rate crucial for jobseekers and employees?
So far, we have read about the ways to reduce attrition rates that would help companies. But we also need to understand why a lower attrition rate is important for employers and job seekers.
Here are a few reasons why:
One of the primary reasons to look into a company’s employee attrition rate is it can be a good indicator of work culture, job security, etc.
Professional stability tops the list of requirements for an employee as it can assure them that they will be able to thrive in the company without anyone breathing down their necks.
Also, they will be able to take the onus of their work and be rewarded and appreciated accordingly.
Uplifts motivation & dedication
A low employee attrition rate is an indicator of job security. This is a very important factor for an employee as it provides assurance to them and then can focus on their tasks at hand.
Job security brings with it motivation and dedication for employees to excel at work, which ultimately leads to benefiting the business.
As mentioned, when you feel secure in your job, you will feel motivated every day to push your limits, to take those extra steps for a better future.
Job security and motivation brings with them dedication towards the job. The more satisfied you are with your job, the more you will remain dedicated.
To an extent that your goals will be aligned with your company's thereby enhancing your performance by leaps and bounds.
Makes you open to challenges
When you feel appreciated and heard in your team and organization, it boosts your confidence. So, when you are less fearful of the results, you will be bold enough to take up more challenges.
This in turn helps you to grow in your career by gathering maximum experience, and accelerate your career ahead in the game and leading to success.
To conclude, when looking for a job switch always research the company thoroughly as it provides a lot of valuable insights that can help you evade taking a wrong decision and find your dream job.
You can find out more about company reviews, salary offered, etc on AmbitionBox.com.
All the Best!