Employee Turnover vs. Attrition: What’s the Difference?

There is a fine line between turnover and attrition. For instance, during the phase of the COVID-19 pandemic, the world started to see a huge spike in the resignation rate of employees. Though resignations were happening due to multiple reasons, there was a significant spike in the employee attrition rate.

But, why? Maybe because of technological advancements as more and more employees gave up jobs to prove that their skills could take their careers to the next level. Though sometimes it was about better compensation or gaining more potential promotion opportunities, at the end of the day it is always about personal choices.

Earlier, we would say that people resign because there is no more work for them. But during the phase of COVID-19, people started resigning because of better compensation. During a time like this, a prerequisite for attracting employees is not just paying them better, but also providing attractive in-house training opportunities. But, most employees anticipate a promotion, a raise, and more responsibilities after some time with the company. However, this might vary with the type of position.

 

What Is Employee Turnover?

Employee turnover is a metric that indicates whether a company has added or lost employees during a given period. It is also a measure of a company’s ability to recruit and retain new employees. In other words, it is an employee switch figure. It indicates the difference between the number of employees added to the organisation and those who have left. The employee turnover ratio can be calculated through the turnover rate. 

Employees are considered to have left if they have resigned or have been terminated. For example, a company that added 9 employees, but lost 8 of them in a year, shows that this company has a turnover rate of 89%. Companies also track the turnover ratio of their different departments and even the different levels of the organisations. Companies use a series of strategies to achieve a high employee turnover ratio.

 

Some of the Reasons for Turnover Include:

  • Not having the right job specifications.
  • Poor workers’ training, or not providing enough training.
  • Poor communication skills.
  • A lack of promotion or advancement opportunities.
  • The hassle of working with supervisors, co-workers, and managers.
  • A lack of proper leadership training.
  • Poor performance evaluations.
  • A lack of retention and hiring practices.

 

Employee Turnover – Causes and Effects

Some resignations happen because of the geographical locations of some employees, but in most cases, it is due to personal reasons. But, what about employers? Is a low employee turnover rate a good thing? Is it a reason to rejoice? The answer to both these questions is NO. A low employee turnover rate can lead to low commitment amongst the employees.

First of all, a low employee turnover rate means that an organisation has a low turnover in its workforce, which implies that more and more employees leave the organisation leading to a lack of resources, and it is critical to replace the vacant positions immediately. This, in turn, leads to low or the lack of commitment of employees towards the company. In simple words, any non-committed employee is likely to leave any organisation at any time.

Some employees may remain with the company for a couple of years, but the sooner they leave the organisation, the better it is. There is a saying ‘That which has begun won’t end,’ which aptly fits and explains the reasons for the low employee turnover rate. 

 

What Is Employee Attrition?

Employee attrition is the number of employees that quit their jobs during a specific period. In contrast, turnover refers to the number of employees that leave a company over a period of time for a variety of reasons, the most serious of which is a career change, which occurs mostly as a result of advancements within the firm. 

Changes in leadership, internal restructuring, management turnover, and the organisation’s increased size are all factors that can contribute to high attrition rates. Understanding the reasons for attrition and changing your approach to address them is critical. To do this, consult with your HR leaders. Once you understand the attrition statistics, you’ll know which departments and job levels to prioritise.

 

Primary Reasons for Attrition:

  • High focus on long-term strategies.
  • A change in the company’s strategy.
  • A need for various training was not received.
  • Feels insecure because of the potential out there for them.
  • A lack of clarity on the company’s vision, mission, and goals.
  • Looking to advance in their current role outside the organisation.
  • Needing the company to offer something the market can’t provide.
  • Failing to take advantage of opportunities that exist.

 

Employee Turnover vs. Employee Attrition: The Difference

Employee Turnover

Employee Attrition

The employee turnover takes into account all terminations in a year. It even includes positions that have been refilled.The employee attrition rate includes unfilled vacancies and position eliminations.
High employee turnover is not always harmful as long as the market for new employees is strongHigh Attrition is more harmful to the company than turnover, especially when it is voluntary.
Turnover is immediate and a direct cause.Employee attrition is often a byproduct of poor company culture.

 

Employee Attrition – Causes and Effects

Employee attrition is the number of people who leave your company during a specified period. Employee attrition is often seen as a negative thing because it indicates employees are not satisfied or are unhappy with the company. Employees need to be satisfied and happy for your company to succeed.

Employee attrition is also important to keep in mind because it indicates how productive your company’s employees are. You lose experience and knowledge when employees leave your company. You also lose money because replacement costs are expensive. It is important that employees are happy and satisfied. Encourage other employees to work harder and be more productive.

Low attrition means that employees are satisfied working for your company. One of the causes of low employee attrition is the training that employees receive. A negative experience with the training process can cause an employee to quit. Employee training is vital to the success of a company. Employees must be taught the company’s new mission, and they must be able to make the changes that are needed.

Employee attrition can also be used as a small business growth indicator. There are a variety of causes for employees to start looking for better jobs. That’s why company performance is important to retain employees. The type of recognition you provide is important to help your employees stay in the company. This includes income, benefits, compensation, rewards, and career advancement. 

If you can keep employees satisfied and happy, and you can offer them great career development opportunities, they will stay. A low-profit margin and a high employee turnover rate are crucial for a company to avoid.

 

Wrapping Up

Employee turnover, often known as the “presence rate,” is the rate at which employees quit their existing job. Employee attrition refers to the departure of specific sorts of employees, such as those who are inexperienced, sick, or looking for a better job. Employee attrition is a sort of turnover that occurs for a specified cause.

In today’s society, employees usually have a higher desire for jobs with better pay, benefits, and employment opportunities. If your company is not offering these perks, it will eventually force employees to look elsewhere for better opportunities. 

 

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