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How Should You Approach Attrition and Turnover?

Two of the most telling metrics regarding overall organizational health are rate of attrition and rate of turnover. Low rates in both are understood to mean that an organization is doing well.

The truth, however, is not necessarily that simple. As you assess the health of your organization with attrition and turnover, it is important to look at the broader picture too.


The difference between attrition and turnover


Attrition is the reduction in workforce head count caused by either voluntary resignation or retirement. The reduction results from an organization’s strategic choice to forgo hiring a replacement.

Turnover refers to the number of hires within a given period to replace those who voluntarily or involuntarily leave a workforce. The turnover rate is the ratio of this number to the total average headcount in the organization.

Turnover in an organization that is prepared, in terms of budget, skills, technology, etc., is not a cause for concern. You see this when employees get promoted or transfer laterally based on organizational needs or the employee’s career trajectory (e.g., an employee from HR who transfers to marketing). Both promotions and transfers are normally planned, so it follows that the right replacements will be available.

A red flag scenario is when you start seeing a different rate of turnover (whether lower or higher) than what you had prepared for.

With attrition, the welfare of an organization depends ultimately on the leadership’s choices in terms of its downsizing strategy. A company may choose, for example, to respond to a resignation by implementing timesaving and productivity-enhancing solutions. The cost of software, training, and a few additional devices perhaps will ultimately cost less than hiring a replacement. Attrition, in this case, can yield positive results.

Leveraging regularly-scheduled meetings to effectively manage attrition and turnover

Leveraging regularly-scheduled meetings to effectively manage attrition and turnover

One-on-one meetings between managers and employees

These are opportunities for managers to get a clear picture of their employees’ current state in terms of their career goals and personal circumstances. Keeping an open line of communication can also prove to be beneficial across the board since it provides opportunities for problem-solving between the manager and the employee.

Managers’ meetings 

These enables team and department leaders to have productive, insightful discussions about what their respective teams and departments are saying, doing, and eventually the short-term and long-term decisions they are likely to make in response to company decisions and any implemented changes. HR leaders can gain a better understanding of how their workforce management strategies are working out and what modifications would be healthy for the organization.

Organizational or departmental update meetings 

This is the perfect opportunity for leaders to offer clarity on current issues that may be the subject of constant speculation among the staff (e.g., downsizing, impending merger, expansion, etc.). Top-down communication provides employees with facts that help they make well-considered decisions.

Need expert support with your workforce management?

Contact Payroll Systems to see how you can leverage our easily scalable solutions.  We pair human skills and empathy with the latest technology to take on our clients’ HR and payroll processes.

We offer paperless new employee onboarding, paperless benefit enrollment, timekeeping systems with companion mobile app, physical clocks, and customized job costing and labor distribution reporting.

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This article provides general information and shouldn’t be construed as legal or HR advice. Since employment laws may change over time and can vary by location and industry, please consult a lawyer or HR expert for advice specific to your business. You can also contact Payroll Systems to inquire about our HR support services.