Blog Employee attrition vs turnover – What’s the difference? Last updated: January 25, 2023 Calculating… There are a lot of elements that make a workplace an environment that people want to stay working for long-term: smooth onboarding, competitive workplace benefits, flexible working, resources and training… But it’s very rare nowadays that employees intend to remain with one employer for life, employees might find new jobs, decide to go travelling, retire or they may change their employment to cope with family commitments. But how do you differentiate between employee turnover and employee attrition? Attrition and turnover are HR terms that can often be confused as both occur when employees leave the company. On the surface, they might seem similar, but let’s dig a little deeper… Employee attrition and turnover both refer to the number of staff that a company sees pass through its doors, however, whilst you can actively work to limit employee turnover by improving your company culture and employee experience, employee attrition is usually beyond your control and is more about the lifecycle of your employees. Employee attrition is when the number of employees you have gradually reduces over time due to naturally occurring events, resulting in a diminished workforce. Measuring employee turnover and attrition To work out your turnover rate you need to divide the number of employees who left in a specific timeframe by the current employee headcount, and then multiply that number by 100. When looking at turnover and attrition you need to delve into whether your employee turnover is voluntary or involuntary to assess either your attrition and turnover. Voluntary attrition is when people leave for personal reasons, professional reasons and moving internally. Involuntary attrition is when people leave or their roles are terminated such as retirement, dismissal and termination of positions. Planned exits are employee attrition. Turnover happens because of things like poor culture or leadership issues. Calculating employee turnover includes both voluntary and involuntary separations, such as resignations and layoffs. Employee attrition is calculated similarly to employee turnover, however you only need to include employees who have left the company voluntarily. To calculate employee attrition, you would need to isolate the number of voluntary departures from the total number of departures in the employee turnover calculation. Ten percent or less is generally accepted as a normal turnover rate for most industries. Reasons for employee turnover and attrition Finances Around 25% of employees would leave their jobs for a pay rise elsewhere leaving them with more financial security. Employee attrition can often occur because of layoffs, resignations or budget cuts pausing the hiring process or eliminating positions altogether. Ways to manage turnover due to finances Assist Offering employees tuition assistance and learning programmes around financial education using an employee communications app can really help employees manage their finances and help reduce financial related stress. Offer flexibility Give employees flexibility around when they get paid, this can be done by opting for pay-roll systems that offer on-demand pay. This ensures employees have greater control of their finances and can handle emergency situations with ease. Reward employees Healthcare, dental plans, gym memberships, money towards learning and even free food at work can really make a difference for employees. Offer employees competitive salaries Competitive salaries prove that you know the value of your staff and appreciate the work that they do. Structure your salaries competitively so that you retain the employees you already have and attract new top talent. Reassign responsibilities and redistribute workloads Like we mentioned previously, if there are layoffs within the company and you expect employees to take on extra workload, communicate with them and ensure they’re happy and clear on any changes in direction. Career changes If employees have been in their job role for a while without progression, pay rises or recognition of their efforts their motivation will slip away. and they might for a company that offers more progression, development and career opportunities than in their current role. In terms of attrition, when employees get promoted within the company or leave for another role, management might decide not to immediately fill the previous position. Roles might be completely new and the employee might be able to still perform the duties of their previous role, or duties can be redistributed to other individuals. Ways to manage turnover due to career changes Set career goals and targets Setting targets and giving employees something to aim towards will ensure employees stay motivated. The worst thing that can happen is employees losing motivation and showing signs of disengagement. However, this can be because they don’t see any future prospects with the company. Help your people grow Providing employees with learning and development opportunities enables them to really enhance their skill sets and progress within their job roles and the company. You could also use employee recognition software to reward them as they grow. Conduct regular feedback sessions You won’t know how people are feeling unless you give them the opportunity to speak. Make sure you’re directly communicating and working with your employees on their career paths, how they want to progress within their roles and create a progression plan together. Be actively involved in the progression of teams Not having clear plans for progression for employees can cause tension and even resignation. Be sure to discuss careers and progression in meetings and create progression maps for your employees. Inflexible work environment The way we work has changed and companies who haven’t altered their working practices to encourage a better work life balance, professional development and flexible working risk losing their employees. People are looking to work for companies that place a high value on flexible working and value the time of their employees. Ways to manage turnover due to inflexibility Create a flexible work policy Flexible working is a huge productivity booster. Around 43% of employees feel that flexible working has been responsible for their improved productivity, with the absence of a commute and more independence resulting in improved performance. Provide the right tools and technology Without the right tools and tech to perform their jobs well and in a flexible environment, your employees’ ability to produce their best work will suffer and they’ll lose motivation. In fact, deskless workers who are empowered with tech are 50% more likely to stay with your company for the next 5 years. Have relationships built on trust and accountability Employees who feel trusted tend to perform better and go above and beyond to meet expectations. Make sure you learn about your team: how do they work best, their different personalities and what matters to them at work, then work together to ensure they’re working in the way that suits them best. Find ways to bring employees together Having good relationships with your team makes work all the more enjoyable. Bring employees together through social events, cross department collaboration and make sure you bring people together to celebrate achievements and wins. Poor work-life balance Around 67% of employees value work-life balance as more important than their pay and benefits combined. Having a good work life balance is essential and if your company isn’t placing an emphasis on creating a working environment that values employees’ time, your employees might go in search of a working environment that places this as a high priority. Ways to manage turnover due to poor work-life balance Establish healthy working boundaries Ensure employees aren’t trying to juggle too much, ensure they’re prioritising certain tasks and managing their workload. If they’re taking on too much, delegate or ensure they know how to say no to extra work requests. Another way to ensure healthy working boundaries is to make sure employees are switching off after no work emails or responding to work notifications! Encourage staff to take their annual leave Taking time off is important, it allows employees to rest, relax, spend time with loved ones and do more of the things they enjoy, which is what life is all about! Make sure your employees are utilising their time off to prevent stress and burnout. Offer cash incentives towards gym memberships/hobbies Taking time for ourselves to do things we enjoy is essential for our health, wellbeing and creativity! Offering cash incentives for employees to do more of the things they enjoy is great for improving work life balance. Retirement One of the main causes of employee attrition is retirement of senior staff and instead of finding direct replacements, employers distribute responsibilities across the team. The success rate of dividing up duties and teaching multiple staff members one part of the person’s job has a higher success rate than teaching one person several new skills and processes at once. How to manage for retirement attrition Provide employees with training to enhance their skills Make sure you plan for retirement. What skills are essential to the job role that your business will be lacking and are there any potential candidates you can train up in those skill areas? When the time rolls round to delegate, you’ll have employees that are clued up and can choose to take on responsibility if they wish. Ensure employees can cope with any extra workload You can’t just offload the workload onto other employees. Make sure any plans for distributing workload are communicated well in advance and teams are willing and prepared to take on any workloads. Life events Life events are one of the other main reasons for career changes. Starting families, taking care of sick relatives or dealing with medical problems can cause people to leave their jobs behind and have some time off. Many companies in this situation choose to keep the role open for someone with the right experience as opposed to taking chances on someone new and many companies choose to wait to see if team members will return after temporary time off. Ways to manage attrition due to life events Ensure colleagues prepare proper handover resources Preparing to pass on knowledge is essential for periods where employees are absent to ensure any transitions are smooth for not only the employee if they’re thinking of returning, but your employees taking on the workload. You could consider hiring temporary employees to ease the workload on other staff members. Check in with the employee Just because the employee isn’t present it doesn’t mean you can’t check in on them, taking a genuine interest in how their break is going, seeing how they are and just communicating with them regularly can ensure they feel in the loop and you can get an indication of if they’re wanting to return to work. Controlling employee attrition and turnover Around 75% of the reasons that employees leave your company can be prevented through a number of ways. Managing and reducing employee attrition can have a positive impact on employees’ perceptions of the company and make them most likely to stay. Low attrition rates show that your company is one that people enjoy showing up to work at. Conclusion Now you know the difference between employee attrition and employee turnover you can now make it your priority to consistently calculate, record and analyse the metrics for each in order to make relevant changes within your organisation. Just remember: Attrition = When the number of employees you have gradually reduces over time due to naturally occurring events, resulting in a diminished workforce. Employees are not replaced. Turnover = Turnover refers to layoffs occurring for reasons such as differences in corporate culture, toxic management, pay, progression and more. Employees are replaced. Improve your business’ performance by using our trusted company intranet software and employee engagement app. Book an intranet demo today and let us show you how Oak Engage can help you.
There are a lot of elements that make a workplace an environment that people want to stay working for long-term: smooth onboarding, competitive workplace benefits, flexible working, resources and training… But it’s very rare nowadays that employees intend to remain with one employer for life, employees might find new jobs, decide to go travelling, retire or they may change their employment to cope with family commitments. But how do you differentiate between employee turnover and employee attrition? Attrition and turnover are HR terms that can often be confused as both occur when employees leave the company. On the surface, they might seem similar, but let’s dig a little deeper… Employee attrition and turnover both refer to the number of staff that a company sees pass through its doors, however, whilst you can actively work to limit employee turnover by improving your company culture and employee experience, employee attrition is usually beyond your control and is more about the lifecycle of your employees. Employee attrition is when the number of employees you have gradually reduces over time due to naturally occurring events, resulting in a diminished workforce.
Measuring employee turnover and attrition To work out your turnover rate you need to divide the number of employees who left in a specific timeframe by the current employee headcount, and then multiply that number by 100. When looking at turnover and attrition you need to delve into whether your employee turnover is voluntary or involuntary to assess either your attrition and turnover. Voluntary attrition is when people leave for personal reasons, professional reasons and moving internally. Involuntary attrition is when people leave or their roles are terminated such as retirement, dismissal and termination of positions. Planned exits are employee attrition. Turnover happens because of things like poor culture or leadership issues. Calculating employee turnover includes both voluntary and involuntary separations, such as resignations and layoffs. Employee attrition is calculated similarly to employee turnover, however you only need to include employees who have left the company voluntarily. To calculate employee attrition, you would need to isolate the number of voluntary departures from the total number of departures in the employee turnover calculation. Ten percent or less is generally accepted as a normal turnover rate for most industries.
Reasons for employee turnover and attrition Finances Around 25% of employees would leave their jobs for a pay rise elsewhere leaving them with more financial security. Employee attrition can often occur because of layoffs, resignations or budget cuts pausing the hiring process or eliminating positions altogether. Ways to manage turnover due to finances Assist Offering employees tuition assistance and learning programmes around financial education using an employee communications app can really help employees manage their finances and help reduce financial related stress. Offer flexibility Give employees flexibility around when they get paid, this can be done by opting for pay-roll systems that offer on-demand pay. This ensures employees have greater control of their finances and can handle emergency situations with ease. Reward employees Healthcare, dental plans, gym memberships, money towards learning and even free food at work can really make a difference for employees. Offer employees competitive salaries Competitive salaries prove that you know the value of your staff and appreciate the work that they do. Structure your salaries competitively so that you retain the employees you already have and attract new top talent. Reassign responsibilities and redistribute workloads Like we mentioned previously, if there are layoffs within the company and you expect employees to take on extra workload, communicate with them and ensure they’re happy and clear on any changes in direction. Career changes If employees have been in their job role for a while without progression, pay rises or recognition of their efforts their motivation will slip away. and they might for a company that offers more progression, development and career opportunities than in their current role. In terms of attrition, when employees get promoted within the company or leave for another role, management might decide not to immediately fill the previous position. Roles might be completely new and the employee might be able to still perform the duties of their previous role, or duties can be redistributed to other individuals. Ways to manage turnover due to career changes Set career goals and targets Setting targets and giving employees something to aim towards will ensure employees stay motivated. The worst thing that can happen is employees losing motivation and showing signs of disengagement. However, this can be because they don’t see any future prospects with the company. Help your people grow Providing employees with learning and development opportunities enables them to really enhance their skill sets and progress within their job roles and the company. You could also use employee recognition software to reward them as they grow. Conduct regular feedback sessions You won’t know how people are feeling unless you give them the opportunity to speak. Make sure you’re directly communicating and working with your employees on their career paths, how they want to progress within their roles and create a progression plan together. Be actively involved in the progression of teams Not having clear plans for progression for employees can cause tension and even resignation. Be sure to discuss careers and progression in meetings and create progression maps for your employees. Inflexible work environment The way we work has changed and companies who haven’t altered their working practices to encourage a better work life balance, professional development and flexible working risk losing their employees. People are looking to work for companies that place a high value on flexible working and value the time of their employees. Ways to manage turnover due to inflexibility Create a flexible work policy Flexible working is a huge productivity booster. Around 43% of employees feel that flexible working has been responsible for their improved productivity, with the absence of a commute and more independence resulting in improved performance. Provide the right tools and technology Without the right tools and tech to perform their jobs well and in a flexible environment, your employees’ ability to produce their best work will suffer and they’ll lose motivation. In fact, deskless workers who are empowered with tech are 50% more likely to stay with your company for the next 5 years. Have relationships built on trust and accountability Employees who feel trusted tend to perform better and go above and beyond to meet expectations. Make sure you learn about your team: how do they work best, their different personalities and what matters to them at work, then work together to ensure they’re working in the way that suits them best. Find ways to bring employees together Having good relationships with your team makes work all the more enjoyable. Bring employees together through social events, cross department collaboration and make sure you bring people together to celebrate achievements and wins. Poor work-life balance Around 67% of employees value work-life balance as more important than their pay and benefits combined. Having a good work life balance is essential and if your company isn’t placing an emphasis on creating a working environment that values employees’ time, your employees might go in search of a working environment that places this as a high priority. Ways to manage turnover due to poor work-life balance Establish healthy working boundaries Ensure employees aren’t trying to juggle too much, ensure they’re prioritising certain tasks and managing their workload. If they’re taking on too much, delegate or ensure they know how to say no to extra work requests. Another way to ensure healthy working boundaries is to make sure employees are switching off after no work emails or responding to work notifications! Encourage staff to take their annual leave Taking time off is important, it allows employees to rest, relax, spend time with loved ones and do more of the things they enjoy, which is what life is all about! Make sure your employees are utilising their time off to prevent stress and burnout. Offer cash incentives towards gym memberships/hobbies Taking time for ourselves to do things we enjoy is essential for our health, wellbeing and creativity! Offering cash incentives for employees to do more of the things they enjoy is great for improving work life balance. Retirement One of the main causes of employee attrition is retirement of senior staff and instead of finding direct replacements, employers distribute responsibilities across the team. The success rate of dividing up duties and teaching multiple staff members one part of the person’s job has a higher success rate than teaching one person several new skills and processes at once. How to manage for retirement attrition Provide employees with training to enhance their skills Make sure you plan for retirement. What skills are essential to the job role that your business will be lacking and are there any potential candidates you can train up in those skill areas? When the time rolls round to delegate, you’ll have employees that are clued up and can choose to take on responsibility if they wish. Ensure employees can cope with any extra workload You can’t just offload the workload onto other employees. Make sure any plans for distributing workload are communicated well in advance and teams are willing and prepared to take on any workloads. Life events Life events are one of the other main reasons for career changes. Starting families, taking care of sick relatives or dealing with medical problems can cause people to leave their jobs behind and have some time off. Many companies in this situation choose to keep the role open for someone with the right experience as opposed to taking chances on someone new and many companies choose to wait to see if team members will return after temporary time off. Ways to manage attrition due to life events Ensure colleagues prepare proper handover resources Preparing to pass on knowledge is essential for periods where employees are absent to ensure any transitions are smooth for not only the employee if they’re thinking of returning, but your employees taking on the workload. You could consider hiring temporary employees to ease the workload on other staff members. Check in with the employee Just because the employee isn’t present it doesn’t mean you can’t check in on them, taking a genuine interest in how their break is going, seeing how they are and just communicating with them regularly can ensure they feel in the loop and you can get an indication of if they’re wanting to return to work.
Controlling employee attrition and turnover Around 75% of the reasons that employees leave your company can be prevented through a number of ways. Managing and reducing employee attrition can have a positive impact on employees’ perceptions of the company and make them most likely to stay. Low attrition rates show that your company is one that people enjoy showing up to work at.
Conclusion Now you know the difference between employee attrition and employee turnover you can now make it your priority to consistently calculate, record and analyse the metrics for each in order to make relevant changes within your organisation. Just remember: Attrition = When the number of employees you have gradually reduces over time due to naturally occurring events, resulting in a diminished workforce. Employees are not replaced. Turnover = Turnover refers to layoffs occurring for reasons such as differences in corporate culture, toxic management, pay, progression and more. Employees are replaced. Improve your business’ performance by using our trusted company intranet software and employee engagement app. Book an intranet demo today and let us show you how Oak Engage can help you.
