Definition of employee turnover8/7/2023 ![]() What Is Turnover?Įmployee turnover is often incorrectly defined as the number of employees who leave an organization over a year. Amazon learned this in October 2022, when the company came under fire for bleeding an estimated $8 billion annually due to its churn-and-burn company culture. Left unchecked, regrettable attrition can lead to serious business consequences. » Learn More: The 15 Best Exit Interview Questions Departing employees are uniquely capable of sharing candid feedback, such as dissatisfaction with their compensation or with aspects of the company culture. ![]() When an employee quits voluntarily, human resources leaders should always schedule an exit interview. It's an HR metric you should track carefully, because it can indicate problems that the company may be able to resolve to avoid losing additional employees. Regrettable attrition occurs when employees leave by choice, as opposed to being fired or laid off. Over time, this can lead to major losses of institutional knowledge, a lack of stability, and negative impacts on morale. At this attrition rate, your workforce is stable, and you're unlikely to risk shortages or other disruptions.Ī high attrition rate indicates that employees are leaving your company after relatively short tenures. According to experts, healthy organizations have an attrition rate of 10% or less. In general, companies should strive to have a low attrition rate. It's the key metric that gives HR professionals insight into employee retention. What Does "Attrition Rate" Mean?Īn attrition rate describes turnover during a set period of time. This process may also be referred to as "natural attrition," in the sense the employees depart on their own accord without intervention from their employer. Learn more with a demo today! What Is Attrition?Įmployee attrition refers to the strategic decision not to replace employees who leave an organization voluntarily.Įmployees may leave for a number of reasons, such as: Instead of confusing spreadsheets and Excel formulas, you can generate accurate reports at the click of a button. We'll also walk you through easy-to-understand examples of how to calculate attrition rates and turnover rates, so you can evaluate how your organization is performing.Īnd if you're looking for a simpler way to measure key HR metrics, BambooHR ® Employee Records makes it easy to get the real-time reports you need. In this post, we'll break down the differences between attrition and turnover. However, attrition and turnover are more complex than they seem-and to make matters more confusing, the two terms are often used interchangeably, even though they describe different measurements. A high attrition rate, however, can be a warning sign that problems are driving your staff away. ![]() Fewer employees are leaving voluntarily, keeping morale higher and preserving institutional knowledge. In general, a low attrition rate signals a healthy company. ![]() When it comes to measuring employee retention, attrition and turnover are two of the most vital HR metrics to monitor. ![]()
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