8 Ways to Reduce Attrition of Employees

The goal of any company is to nurture its qualified employees and keep them with the company as long as possible. Letting your talented employees go does not only hurt but also harms your business in a financial way. According to the statistics, it costs an employer an average of 33% of an employee’s yearly salary for their exit. That’s why companies need to adjust their strategy to focus more on retention. How can you reduce attrition and keep your employees happy? Read our article to learn more.

What is an attrition rate?

Employee attrition is one of the most crucial metrics, as it provides you with a lot of insights into how your company builds relationships with workers and is able to retain them for a long period of time. Attrition management and calculation are a must-have because they show you valuable statistics about the number of workers who retired from your company during a certain period of time. If this number is high, it means it’s time to reinvent your employee retention strategy. 


In simple words, employee attrition is a metric that shows is calculated by dividing the number of people who have left the company by the average number of employees over a certain span of time. Though this metric is considered uncontrollable and unpredictable, companies still need to monitor it in order to track a general picture and see where they stand in terms of candidate retention.


To get an accurate picture of the attrition rate, you need to look into the following factors:


  • The turnover rate in your organization
  • Turnover rate distribution
  • Data comparison to other metrics
  • Impact of the turnover on your organization

Turnover tracking — Personio

How to calculate attrition of employees

How to reduce attrition of employees? First of all, you need to calculate it. To calculate the attrition rate, you need to divide the number of employees who have retired from your company by the average number of employees over a specific period of time. This can be done annually, monthly, or quarterly.

It’s important not only to calculate this metric but also to analyze what causes employees to go. There are the following types of employee attrition.


  • Voluntary 

This is when the employee decided to retire from the company in a voluntary way. This usually includes leaving the company for different personal reasons, such as taking care of a family member, moving to a new city, etc.


  • Involuntary

This type of attrition takes place when the company decides to end employment. This can be caused by the employer’s incompetence, a need to reduce staffing costs, or just because this job position is no longer relevant. Usually, companies do it to control costs and improve their financial state.


  • External

This is when an employee switches to a different company because of the need to grow or take new opportunities, get a higher salary, or have better career growth. Believe it or not, according to statistics, sometimes only one bad day at work is enough for 80% of employees to start looking for a new job.


  • Internal 

This is actually the best type of attrition for the company; because this is when the employee accepts a higher position in the same company, gets a promotion, or switches to a new department.


First of all, you need to decide which type of employee attrition to track and how to reduce the attrition rate. The best strategy is to track different types separately to avoid confusion and false outputs because each attrition type means different areas to work on.


For example, voluntary and external attrition means that you need to improve your employee nurturing strategy. They may leave for different reasons, and your goal is to find out why. This can be done with the help of an exit interview that will help you define weak points in your employee retention strategy.


What retention rate is considered to be good, and how to control attrition? As a rule of thumb, an employee retention rate of 90% or more is what you should aim for with a turnover rate of less than 10%. Also, statistics show that a higher retention rate can maximize a company’s profits up to 4 times. So, you can improve the company’s profits by maximizing employee retention and working on growing those employees who stay with your company for a while.

How to control attrition

First of all, you need to find out the main reasons why your employees leave. The most common reasons include:


  • Not enough training and opportunity growth for newcomers
  • Miscommunication between management and staff members
  • Disconnection of employees from the values, philosophy, and mission of the company
  • Vague job descriptions that do not describe the responsibilities in detail
  • A lack of motivation and recognition
  • A lack of constructive feedback, including feedback on performance issues
  • Need for a more flexible schedule
  • High turnover costs caused hiring and firing workers

So, here are some tips on how you can control retention and attrition and avoid the issues we have described above.

Set clear goals and strive for transparency in all working processes

The truth is the following: 60% of companies don’t have clear goals when hiring new employees. Companies do not communicate their expectations and needs, leading to performance and goal tracking problems. Employees often leave when the responsibilities of their role are ambiguous or if their work process consists of strange unimportant tasks that do not contribute to the company’s growth.


One of the ways to control attrition is to set SMART goals for new employees and document them to ensure that everyone stays on the same page.

Smart goals for employees —


Provide flexibility 

Statistics indicate that employees need companies that provide them with the option to work remotely at least once a week. The inability to maintain a work-life balance is one of the reasons for leaving a job, and if companies do not give the option to work remotely and have flexible schedules, it can significantly affect their turnover rates.


This is not only about remote work, it’s also about flexible timing, the opportunity to take day-offs, and work from other countries and cities. Employees have a life outside the work, and the better this life is, the more productive and less distracted they are at the job they do.

Recognize and praise your employees

It’s not a secret that we all want to be treated well at work: we want to be recognized, noticed, and appreciated. It’s significant for employees to know that they contribute to the company’s growth and that their efforts are valued. 


Once a month, managers should organize a meeting where they will discuss the achievements of the company with their employees and praise them for accomplished work. The key here is to be specific and explain what exactly is appreciated, so employees will understand which actions lead to results, which will help reduce turnover.


Sometimes simply recognizing and thanking your employees will create an atmosphere of trust in the company. Moreover, nearly 90% of employees who received recognition or thanks from their boss indicated higher levels of trust in that boss and, as a result, motivation to work and achieve more.

Organize exit interviews

One of the ways to control attrition is to know the weak points in your company strategy and be aware of the reasons people leave the organization. 


After the employee has submitted the resignation letter, an exit interview is conducted to understand why the employee is leaving the company. This interview is a golden mine for finding insights on how to control and improve attrition rates.

How to reduce attrition and turnover

You need to have a clear and detailed approach to reducing attrition and turnover. Here’re some ways of how employee attrition can be reduced and strategies to reduce employee turnover.

Incorporate employee benefits and embed your employees

According to Shrm Report, companies need to strive to build and strengthen:


  • Links

By providing mentors in your organization, developing work in teams, fostering team cohesiveness, and encouraging referral systems in your company.

  • Fit

By providing clear requirements and instructions during recruitment, communicating about the company’s values and philosophy, and incorporating job and organizational fit.

  • Sacrifice

By tying financial incentives to tenure and providing unique incentives and perks that are unusual to most of the companies.

Embedding your employees — Shrm report

Outsource the work

Companies that decide to partner with the experienced outsourced team with a developed culture of the company and defined values will improve the experience of the employees and reduce the employee churn rate. This is how outsourcing can positively affect your employee attrition:


  • You will get an opportunity to gradually scale in the business area that is quite challenging or expensive to be increased quickly.


  • You’ll save a lot on expenses and losses when it comes to growth and optimize the whole learning process, which the outsourced provider will take over to improve and strengthen their team.


  • Outsourcing is all about gaining new skills and expertise and growing your company with well-trained professionals who will substitute the shortage of in-house team experience and skills.


  • Outsourcing companies always stay tuned for the market changes and continuously train and educate their employees to meet the market demands.


  • By picking a reliable outsourcing partner, companies get a chance to scale and efficiently grow while saving costs and other resources.

Develop training programs

Training programs allow employees to grow in the company, change departments and positions, and improve their skills without switching a job. Why does it have a large impact on employee retention? Because it improves their productivity and job satisfaction; as now they know that they can grow in their company without looking for promotion in other organizations.


People don’t want to stay in the same position for a long period of time; they need challenges and new engaging tasks. Corporate training does not only help the company improve the workflow but also reduces employee turnover. Moreover, it’s a signal to employees that they are appreciated and valued and can aspire for new projects in the company.


To achieve better results, it’s nice to combine training with real hiring opportunities and a career roadmap for both senior and new employees.

Create an atmosphere of learning

Technology changes not only the way we live but also the way we work. There is a great shift in demand for human expertise, and most of the skills in high demand nowadays weren’t even mentioned 3-4 years ago. That’s why to be competitive in the market, employees need to nurture the desire to learn, grow, and master new skills. As stated in Bersin report:


The single biggest driver of business impact is the strength of an organization’s learning culture


Companies that want to reduce the attrition rate of employees need to reward and encourage continuous learning. Most of the time, managers focus on increasing short-term results and performance without thinking about a long-term strategy of learning and growth, which is one of the best ways to reduce turnover.


According to a report by Bersin, the average employee had only 24 minutes a week for formal learning. If companies want to produce innovations, they need to create a culture of continuous learning in the company, and an atmosphere of critical thinking where speaking up is encouraged and praised.


Another way to create an atmosphere of learning is not to underrate negative feedback. One of the best ways to improve employees’ performance is to provide them with positive and constructive negative feedback with tips on what skills need to be improved. Guidance and feedback from others are crucial for improving the level of your employees and, as a result, the level of the whole organization.


The main thing to remember here is that organizations should not solely focus on learning and development programs but create a learning atmosphere by giving critical feedback, outlining clear goals, and encouraging high learnability and a hungry mind.

Reducing employee attrition drives your company growth

To conclude, preventing attrition is easier than reducing turnover. That’s why companies need to always think in advance and focus their strategy on employee turnover solutions, such as nurturing, retaining, and growing their employees.


Dewais goal is to work on employee retention and growth; that’s why we provide product-oriented consulting services and value transparency, cooperation, and growth. When hiring candidates, we pay attention to their ability to learn and their desire to grow. Want to get a free consultation? Contact us right now, and we will help you reduce your attrition rates and improve the working culture in your organization!


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