What is Attrition?
• Attrition is the reduction or loss of employees through different conditions. Reasons for attrition include retirement, resignations or even death. Attrition rates also depend on the general economic climate. However, regardless of the reason, attrition has a substantial cost to business. For example, when employees leave, a business will have to consider new employee training, relocation, search firms or agencies, interviews and background checks and advertising costs. These costs are substantial especially if your business has to constantly hire to replace employees that leave your organization through attrition.
Attrition Rate
• Organizations use several different methods to determine the actual attrition rate of the company. The approach will vary by company. However, previous attrition calculations can not determine any future attrition rates with certainty. For example, attrition rates cannot predict economic downturns that may force massive layoffs or even the closure of a division of your business. According to "Human Resources Management," you can minimize the attrition rate within an organization by implementing policies conducive to a productive working environment with equitable salaries and wages.
How to prevent turnover
Employees are important in any running of a business; without them the business would be unsuccessful. However, more and more employers today are finding that employees remain for approximately 23 to 24 months, according to the 2006 Bureau of Labor Statistics[citation needed]. The Employment Policy Foundation states that it costs a company an average of $15,000 per employee, which includes separation costs, including paperwork, unemployment; vacancy costs, including overtime or temporary employees; and replacement costs including advertisement, interview time, relocation, training, and decreased productivity