Employee attrition is a natural process in which a company loses its employees due to certain life events such as resignation, retirement, elimination of a particular position, or other such reasons. In case of attrition, employers do not fill up the vacancy left by the former employees who leave their job voluntarily.
Attrition can be beneficial to the company in certain situations. This article serves as a guideline and describes all the practices that human resource leaders and managers can implement in the company to benefit from attrition.
What are the reasons for employee attrition?
Following are the main reasons leading to employee attrition in firms.
- After reaching a certain age, employees may choose to retire from their jobs.
- If the employee decides to switch careers, he may leave the current job position.
- Employees may also resign due to personal reasons or certain life events, owing to which they may not be able to continue their current jobs.
- If the employees face challenges or unfavorable situations at the workplace, they may tend to resign.
- After working for some months, the employee might realize that the job is not fit to his expertise or skills, and he may not want to continue further.
- An excessive amount of work and unrealistic deadlines make an employee stressed that force him to search for some low stressful jobs somewhere else.
Employee attrition vs. employee turnover
Attrition is the natural process of employee reduction in a company where the employer does not fill the vacancy left by the former employee. Attrition can be considered both positive and negative.
Whereas staff turnover is voluntary (employee leaves based upon free will) or involuntary (the company fires employee) loss of an employee, where the employers have to fill up the vacancy left by the former employee through new recruitments. Moreover, turnover is usually viewed negatively, and it can be a burden for the company’s management.
Benefits of employee attrition to the company
When the employees leave an organization voluntarily, this situation can be beneficial for the company in the following ways:
- When employers do not fill up the vacant position, departmental workflows can be changed. The company can assign new duties to the rest of the employees and shift resources allocated for that position within the organization.
- When employees leave the company voluntarily, labor costs on the company reduce that can be allocated in other areas. Labor costs refer to the wages of those employees, along with appraisals and bonuses.
- Organizational culture improves if the employees that are troublesome and negatively impact the company culture leave through attrition.
- When some employees retire or resign, this can be considered a fresh start for the company, and the current employees can be offered new opportunities or new positions can be created that would add to the productivity of the company.
- If underperforming employees leave the company, this can pose a positive impact on the company’s productivity. Underperforming employees often hinder their work efficiency and influence other employees if they are hired at important positions. Through attrition, the company becomes able to solve this problem without turnover or layoffs.
Suitable practices that HR leaders can implement to ensure benefits to the company through attrition
As an HR leader, you would be responsible for managing the workforce of the company. HR leaders can create and shape a dedicated, productive, and engaged workforce through proper awareness and understanding. In the case of employee attrition, you can implement the following practices to ensure benefits for the company.
- When employees resign or retire, HR leaders can focus on the remaining employees and implement practices to retain valuable talent. After identifying the essential employees for the business, HR leaders can engage them by offering a healthy work environment and providing handsome salary packages. This can be done by allocating the finances reserved for salaries of former employees in this regard.
- HR leaders can research the current trends in the market and create new job positions that enhance the company’s productivity. According to the company’s needs, HR leaders can either hire new employees or promote existing employees to the newly created positions. Each departmental activity can be carried out smoothly that can enhance the productivity of the company.
- With lesser employees in the company, HR leaders can better maintain the workplace environment by implementing conflict management practices. This can make the workforce more manageable and easier to handle and work with.
- When the employees leave the company, HR leaders can initiate strong offboarding programs to avoid common pitfalls in the employee exit process. Through a warm offboarding program, the employee can leave the organization on good terms and a positive note. HR can handle all the paperwork and make sure that employees have no hassle in clearing their finances. Through these practices, the company can mitigate security risks, prevent legal issues such as contract disputes, get valuable feedback, and part ways on the best possible terms. Moreover, former employees can also serve as positive ambassadors that can improve the company’s image and attract valuable talent.
- If due to some reasons, the former employees want to return to the company, HR leaders should develop such policies with the top management that can welcome those employees. If those former employees who are highly talented and experienced and who left the company for some personal reasons or career choices want to return, the company should welcome them. HR leaders should implement this practice as former employees are more likely to work efficiently and passionately for the company upon their return.
- HR leaders should re-evaluate their hiring practices with company goals and objectives. This can create opportunities for the company to hire the top talent that better fits those specific positions.
- By embracing employee attrition and acting upon it positively, HR leaders can coordinate with managers, executives, and other employees to create a workplace culture that enhances the workforce’s productivity, personal growth and carves the path towards success.