Attrition in Recruitment
A conversation with some customers this week sparked a debate among the delegates over what was an ‘acceptable’ level of attrition within a recruitment business. (these were leaders from different companies and different market sectors all in the recruitment industry). A broad sample you might say.
My conclusion was that everyone had a very different view!!!
Some gauged that a high leaver rate kept the business fresh and hungry. (discuss??) Others were concerned with the pressure a high churn places on new starters as they enter a competitive and ‘tough’ marketplace. A couple felt the biggest issue was the cost implications of increased recruiting, training and the 'unproductive' early months.
I also found that their understanding of what an ‘Attrition Rate’ was and how it was reached was extremely varied! Not the end of the world if they all understood THEIR way of doing it but difficult for me when trying to make comparisons.
I asked them all to work out their own company rate based on the following calculation… (then we could make a real comparison).
1. Average number of employees who worked at the company during the year…
[Add the number of employees with your company 12 months ago to the number of employees remaining currently and divide this sum by two. For example, assume a company had 1,000 employees at the beginning of the year and 1,100 employees at the end of the year; 1,000 plus 1,100 equals 2,100, divided by two equals 1,050. This figure represents the average number of employees employed by the company during the year].
2. Determine the number of employees who left the company during the year.
[Do this by examining the past year's employment records. If your company does not keep a running tally of employee attrition, physically count the number of employees who left the company over the year. For example, in the above example we find that 300 have left for a multitude of reasons].
3. Level of attrition
[Divide the number of employees who left the company during the year by the average number of employees employed by the company during the year to arrive at an employee attrition rate. Continuing the above example, 300 divided by 1,050 equals .286. Multiply this figure by 100 to arrive at 28.6 (28.6%). This figure represents the company's employee attrition rate for the past year].
The only time in the discussions where these owners and directors looked a little uncomfortable was just before I asked them if they'd be comfortable sharing their results with the group. They all did :)
The figures that were established were high. Very high! The lowest was at 24% and the highest was at 57%...
I’m interested to know whether these figures are common among the rest of the market. 10 years ago, it was well documented that the turnover in recruitment was between 40% and 50%. If you broke that down to first year starters that figure rose beyond 80% (8 out of 10 new starters leaving before their anniversary!!!)
My sample this week saw very similar figures. (41%) Is this similar in your business?
Why has the figure in recruitment remained so high for 10 years? Is this because we are ‘happy with it’ or because we haven’t nailed the answer? The average across ALL UK businesses is below 20%...!!!!
If your business is similar, are you comfortable with it? I train owners, managers and consultants on recruiting and hiring strategy, on-boarding and performance management and this is a common theme. At Recruitment Guide we pride ourselves on delivering outcomes after our training and coaching. Attrition is an area we focus on a great deal.
Are you comfortable sharing your company’s attrition rates ad sharing how you achieve it, how you maintain it? Or is it something you are keen to address and if so, what strategies are you implementing?
Recruiters are meant to be the experts, no?
Jason Jones
