Employee Attrition Vs Turnover: Decoding Reasons To Pay Attention To These 2 HR Metrics
While the employee lifecycle is becoming complex with time, and HRMS solutions like uKnowva are there to simplify the processes, two HR metrics have the same importance throughout. Those are employee attrition and turnover. Both terms signify an employee leaving the organisation. C-suite leaders study these two metrics carefully to know how their organisation is digitally transforming over a significant period. Let’s decode the major differences between these powerful and impactful terms below.
A brief on employee turnover rate
Employee turnover rate refers to those employees leaving your organisation that you want to replace over a period. Now, this can be voluntarily or involuntarily. Turnover rate increases mostly due to negative reasons like an increase in office politics or the company having a financial crisis. That’s when virtual and manual layoffs happen, and employees are often terminated without proper notice at times.?
However, the most common reasons for employee turnover are:
According to the infographic pasted below by HRforecast.com, 50% of organisations don’t have the knowledge to retain their employees. In comparison, 25% of employees prefer to leave their company in the first year. (Source: LinkedIn study). However, when multiple learning and growth opportunities exist, deserving employees often stay back. Rest stats you can read from the infographic below to better understand employees who tend to leave in the first year of their job.?
A brief on employee attrition rate
Employee attrition happens when employees leave the organisation voluntarily, and the organisation has no intention of filling their positions immediately. It is mainly when employees:
More causes of employee attrition are mentioned below in the infographics by Techjockey.com.
When employee attrition increases, the reason for it is not as negative as the employee turnover. Attrition in a company means employees are resigning or retiring but are not actively getting replaced, which is the case of employee turnover. And if employees are getting replaced more often, it means the hiring is not done right, or the experiences delivered to them are not worthwhile throughout their journey in the firm.
领英推荐
Reasons for increased attrition and turnover rates with solutions
Generally, employees do not stay for more than 3-5 years in an organisation. And the most common reasons for them to leave, retire, resign, or get replaced include the following:
Financial stress and commitments:
Employees often face hurdles with their current financial commitments, which leads to a lot of stress to switch jobs for better pay grades. HR executives and teams can implement uKnowva HRMS and its performance management system for a 360-degree view of employee records and performances. That would enable decision-makers to appraise employees on time with the right hike in salary/basic pay and other incentives/bonuses.?
Stagnation:
Employees feel they are not getting the right learning and growth opportunity in the current firm. They want to achieve excellence in their craft and career. If the current organisation is not investing in smarter eLMS functions like the one uKnowva HRMS offers, stagnation is inevitable.?
Inflexible work culture:
Employee preferences change every 6-9 months with respect to their work environment and office culture. Rigid company policies are not what they favour anymore. When organisations use and implement the uKnowva HRMS solution, they can offer flexible working hours and modules to increase employee retention on the go.?
Concluding Note:
A few reasons to stay in the company are monetary benefits, flexible working hours, upskilling opportunities, and internal job promotions. Find the same in the image below by the Lever 2022 report.
uKnowva HRMS helps HRs provide all these benefits to well-deserving employees to reduce unexpected hikes in attrition and turnover rate. It also predicts the attrition rate, so HR teams can make the right strategic decisions regarding succession planning for their top performers.