Attrition and Its Effects

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Attrition and Its Effects

By | Jan. 2011
Page 1 of 20
Table of Contents
What is attrition?3
What are signs of attrition?3
Calculation of Attrition Rates3
Attrition rates in India4
The highlights of the study in question are as follows:-4
Costs of Attrition7
Causes of Attrition9
Survey details and insights11
What can organizations do to retain employees16
Short-term Actions16
Long-term Actions17
Retaining the “Game Changers”18
References20

ATTRITION – CAUSE AND EFFECT
What is attrition?
Attrition is the reduction in workforce by means of resignations, retirements and death. It is also known as total turnover or wastage rate. Turnover is defined as a change in the workforce due to accessions, quits, discharges, and layoffs. The difference between the two is that attrition is a function of a declining workforce, whereas turnover is the function of a stable or expanding workforce.

In the modern context, both these terms are used interchangeably. But, one thing is common; both attrition and rising employee turnover results in major organizational and financial stress. What are signs of attrition?

High turnover or attrition and low employee morale in all or part of the organization are two major indicators of an ineffectual work environment. Related workplace indicators that may exist in such a situation include * Rising conflicts

* Multiple complaints
* Low employee engagement
* Poor company health
* Diversity or inclusion objectives being unrecognized or going unmet * Employee indifference

These factors can reinforce or drive each other – a problem with one can create or exacerbate problems in all others. Calculation of Attrition Rates
Attrition rates are calculated based on a monthly, quarterly and yearly basis. The simple formula for calculation of 1. Employee turnover per month = (Number of separations during the month /Average number of employees during the month) * 100 2. First year turnover rate = (Number of employees who leave after...