3 Myths of Attrition and The Impact It Has on Your Business
Attrition, sometimes referred to as employee churn or turnover, is a part of everyday business. Whether it’s voluntary or involuntary, the idea of someone leaving a job isn’t anything unusual, and in some cases is even good for business.
Where it does become an issue is when an organisation has a high rate of attrition. The actual point at which an attrition rate is considered high will vary depending on the industry and type of work.
So, differences aside, what is the impact of high attrition on an organisation?
The impact of attrition on your business
Firstly, it can increase business running costs. The hiring process can be expensive in terms of money and time, especially if your business works with recruitment agencies, as additional fees apply.
Each time a staff member leaves and you choose to replace them, you have to go through this process every time, and if your rate of attrition is high, so is the cost of keeping jobs filled.
Secondly, there are productivity losses as multiple people in the business may need to be involved in the hiring process - that could be heads of departments, managers and various people in HR. For anyone where recruitment isn’t their main role, it’s taking time away from potentially more valuable tasks.
Further to this, each time someone new joins the team, there is a period of onboarding where someone might need to take time from their days, weeks and even months to support the new hire - if you have to keep going through this process, it can have a huge impact on productivity.
Next is the impact on team morale - if you’re working within a team where people are often coming and going, or even being released by the company, it can affect morale for others in the business and can damage the potential for strong teams to bond.
And finally, high levels of attrition can affect your reputation as a business. If your organisation becomes known for not being able to hold on to its staff, it becomes harder to attract talent into your business.
With a better understanding of how a high attrition rate impacts your business, it’s good to know some of the myths:
- Attrition isn’t a significant problem
As seen above, if you have high attrition rates, it can impact the business in multiple ways. It’s best not to be ignored and organisations should be looking carefully at why anyone leaves the business (for good or bad reasons). - You can’t do anything about attrition
If this was true, businesses would regularly grind to a halt with no one to do the work. There are definitely circumstances where it’s beyond a company’s potential to keep someone, but there are actions a company can take to reduce attrition across the business. - You don’t want to deter people from applying
Quality, not quantity. The more people that apply for a role, the more you have to turn down - plus, for every applicant, there is work involved with assessing whether they’re the right person or not. Unless the role you’re hiring for doesn’t require any skills at all, then you’ll always want to deter bad fits from applying.
Learn more about the impact attrition can have on your business as well as how to get started with reducing attrition in our guide: The HR Guide to Employee Attrition (with Scorecard tool). Download it here:
