How to predict employee attrition

At some point, employees look to change their workplace. It may happen due to professional or personal reasons, but it does happen. However, what if the number of employees leaving the organization grows past a certain threshold?

Leadership gaps in organizations, caused by the exit of senior or high-performing employees, can ring alarm bells!

While some employees may leave for better pay, others may be unhappy with a toxic work culture. But whatever its cause, a high attrition rate has massive and disastrous after-effects.

Employee attrition is the process of employees leaving a job or the workforce without being replaced. However, it’s important to note that employee turnover and employee attrition differ.

Employee turnover is when an employee leaves and is replaced by someone else. Employee attrition happens when someone goes and the vacancy they create remains unfilled, or the position is eliminated.

“If an employee leaves for whatever reason, we can just hire another one, right? A high attrition rate doesn’t mean that the sky is falling!” — An ignorant leader

Let’s start by addressing why a high attrition rate should be worrying for employers.

Employee attrition usually happens when an employee retires, resigns for personal reasons, or changes careers. No matter the reason for attrition, a high attrition rate suggests that an organization is losing workforce power. Here are some eye-opening facts about the downsides of not having an employee attrition model in place:

Cost of replacing an employee: According to Gallup, replacing an employee can cost anywhere between half to two times the employee’s annual salary.

Loss of knowledge: According to The Work Institute’s 2020 Retention Report, 40% of respondents quit their jobs in the first year of their employment.

Cost of disrupted operations: It takes an average of 42 days to fill an open position, and once an ideal candidate is hired, it takes six to eight months for them to reach full productivity.

Cost of losing a trained employee: The Industry Report by Training Magazine claims that it costs an average of $1,286 a year to train one employee.

Employee attrition analysis is especially important given the current global financial crisis. When managers know that a team member is about to retire or is planning to quit, they can be prepared to fill the vacancy.

When using an employee attrition model, there are some warning signs you can spot.

No employee resigns without hinting at their departure. Did you know that employees tend to show signs of departure a few months before they quit and that tracking these warning signs allows organizations to identify turnover before anyone hands in their notice?

These warning signals can typically be classified under two categories: behavioral and communication-related. Let’s take a look at the warning signs to watch out for.

• Performance dips and a lackluster attitude to work
• Increased instances of absenteeism or sick leaves
• Disengagement from what is happening in the team
• Low levels of participation in team activities
• General negative attitude

Awareness of these early warning signs of attrition will enable managers to address issues with employees. In some cases, a senior manager should also be involved in discussing why employees feel the way they do, as the problem could lie with the immediate manager.

While the above-mentioned are behavioral signs, organizations can implement other early warning methods so managers of respective teams can avoid high attrition rates.