Turnover vs. Attrition: Here's What You Need To Know

By Indeed Editorial Team

Published August 25, 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Turnover and attrition are two fundamental metrics that human resources professionals use to evaluate changes in staffing. This data can help you understand how long employees typically work for your organization. If you work in human resources, understanding how these terms differ can also help you make positive changes to your company in order to improve employee retention or reduce costs. In this article, we define turnover and attrition and explain the key differences between them.

Related: Human Resources: Definition and How It Works

What is turnover?

Turnover is a metric that measures the rate at which employees leave an organization. Turnover can be either voluntary or involuntary. However, this concept focuses only on employees whose positions your organization plans to refill. While every company experiences the departure of employees, calculating your company's turnover rate can help you determine how long employees tend to work for your organization and how your company's workforce changes over time. Turnover can occur because:

  • An employee gets a new job with a different company

  • An employee leaves the company for personal reasons

  • An employer terminates an employee

Employee turnover rate takes the form of a percentage, which you can calculate by dividing your average employee headcount by the total employee departures and multiplying that figure by 100. For example, if your company typically has 100 employees and 10 have left the organization, you could calculate your company's employee turnover rate like this:

(10 employee departures / 100 employees on average) x 100 = 10%

Read more: How To Calculate Employee Turnover

What is attrition?

Attrition is an HR metric that describes the rate of employees leaving your organization. This makes attrition the opposite of employee retention, which describes the number of employees that your organization retains. When attrition occurs, it means that an employer has decided not to replace the employee or refill the position. Therefore, attrition can be a strategic choice for companies that are downsizing their workforces or looking to reduce costs. Attrition is voluntary, and it may occur when:

  • An employee retires

  • An employee resigns to manage a long-term health condition

  • An employee moves to another state

  • The employer removes the position

To calculate your company's attrition rate, you can divide the number of employees who left during a particular period by the employee average. For example, if your company has 100 employees and 10 of them leave, you can use this set of equations to calculate your company's attrition rate:

(100 employees - 10 employees who left due to attrition) + 100 employees = 190

190 / 2 = 80 employee average

(10 employees who left / 80 employee average) x 100 = 12.5% attrition rate

Related: What Does Attrition Rate Mean? Definition and How To Calculate

Turnover vs. attrition

Turnover and attrition are two important types of human resources metrics, and you can use them together to gain insights on employee departures at your organization. Some noteworthy differences between the two terms include:

Employer intentions

The key difference between turnover and attrition is whether the employer plans to replace the departing employee. When an organization experiences turnover, the employer intends to find a replacement for the employees who leave and refill their positions. When attrition occurs, the employer may choose not to search for a replacement or may remove the position entirely.

Importance

While both metrics are important, your organization may value data about its turnover rate over its attrition rate. This is because companies may need to invest resources into replacing employees when turnover occurs. To ensure the company is using its resources wisely, an HR professional may analyze the turnover rate and attempt to determine common reasons for departure to increase employee retention. In contrast, attrition is often a cost-efficient process.

Benefits

Turnover and attrition can benefit companies in different ways. Here are some of the key benefits of attrition:

  • Employees often leave on amicable terms.

  • Companies can reduce costs.

  • Organizations may rearrange resources and adjust employee duties.

In comparison, some of the benefits of turnover include:

  • You can remove employees who don't align with the company culture.

  • Companies can hire more effective employees.

  • It can help you identify and solve problems that may be causing employees to leave.

Related: What Is Human Resource Management?

Challenges

While turnover and attrition may be challenging for some companies, you can help your organization prepare by making plans for employee departures. Some of the obstacles your company may overcome when managing attrition include:

  • A reduced workforce

  • Some effective employees retiring

  • A change in workload for the remaining employees

In contrast, your company may solve these issues related to employee turnover:

  • Expending resources to replace employees

  • Training new employees

  • Determining the leading cause of employee turnover

Related: The Real Turnover Cost of Losing an Employee (And Ways To Retain More Talent)

Tips for improving your turnover and attrition rates

Here are some tips that you can use to help you improve the turnover and attrition rates at your company:

Communicate with employees frequently

To manage turnover and attrition at your company, it's helpful for the HR team to communicate with employees frequently. You can do this by encouraging employees to form relationships at work and requesting feedback regularly. This can help your company retain employees and reduce costs. Also, if employees choose to leave, regular communication can help you understand their reasoning, which may help you improve the company and encourage other staff members to stay long term.

Related: 20 Ways To Reduce Employee Turnover

Increase employee engagement

Keeping employees engaged can help you manage turnover since it can motivate them to stay. You can boost employee engagement by fostering a positive work environment, building strong relationships with employees and using employee motivation techniques such as rewards and team building events. This can help ensure employees are excited to work in their roles and are dedicated to your company.

Complete exit interviews

Another way to understand your company's turnover and attrition rates more deeply is to complete exit interviews. Exit interviews are interviews with employees who are leaving the company. In an exit interview, you can ask questions to help you determine why an employee chose to leave and what your company can do to improve.

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