Attrition vs. Turnover: Understanding the Differences
If you’re at the coffee bar throwing back espresso shots this morning because you were up all night worrying about turnover at your company, you’re not alone. 15Five’s latest research shows that more than 80% of business leaders believe a decrease in employee retention presents a risk to company success. The Great Upheaval has many executives and HR leaders frazzled, and there’s not enough coffee in the world to fix all the talent issues that are converging at once.
But when an employee leaves the company, is it always a bad thing? What exactly is the difference between “attrition” and “turnover,” and are some departures inevitable? In this article, we’ll look at what it really means when you part ways with an employee, what makes turnover “regrettable,” and what you can do to ensure you retain more top performers.
What is attrition?
Attrition and turnover both mean an employee and a company are parting ways. But the circumstances of that departure are what make these two terms different. When an employee leaves a company because of a natural event or process, this is considered attrition. Examples include:
- Elimination of the job position
- Chronic health issues
- Employee passing away
Attrition happens when departures occur as part of a normal employee lifecycle. When an employee retires, or a specific job is eliminated due to automation or some other industry or business change, this is typically not a major financial concern and can actually reduce short-term costs in many cases. Other types of attrition are inevitable, and while it’s sad to see someone go, retirement, illness, and even death are part of life.
What is turnover?
Unlike attrition rate, turnover can be a more concerning metric—especially when you see an upward trend. High turnover rates can signal trouble brewing and can be a lagging indicator of employee disengagement.
We consider a departure turnover when an employee leaves because they’re unhappy in their position or find something better. Examples include when someone leaves because of:
- Bad manager relationship
- Lack of sufficient recognition
- Poor company culture
- Insufficient learning and development opportunities
- Inadequate compensation
- Burnout or feeling overwhelmed at work
Turnover is not just an “HR problem”—it’s an expensive business problem for which everyone in the organization must be accountable. Replacing someone can cost a company an estimated 33% of the employee’s salary. When you multiply that by dozens or even hundreds of employees each year, the cost can be detrimental to business success.
High turnover is costly in other ways too. Productivity is impacted when positions turn over, and employee morale can take a hit when peers and leaders are constantly leaving. Even the strongest cultures can only bear a certain amount of employee churn before the entire organization starts to feel the strain.
Key differences between attrition and turnover
While attrition and turnover are related and sometimes used interchangeably, they are pretty different from an HR perspective. When an employee takes an opportunity elsewhere, it’s important to consider (and track) the “why” behind their departure. This is pretty easy in typical cases of attrition. Someone reaches retirement age, you throw a party in the breakroom on their last day, and you check the “retirement” box in your system.
The reasons for turnover can be a little trickier to track, and you can’t rely solely on an exit interview to tell you the whole story. Some employees aren’t as forthcoming with the real reasons they’re leaving, and in most cases, those reasons are complex. That’s why it’s so important to have your finger on the pulse all the time, not just when an employee is at risk.
When you measure employee engagement and have regular one-on-ones between employees and managers, you’re less likely to be caught off guard by turnover. And when an organization has a culture ingrained with regular, real-time feedback loops, issues can be addressed before a great employee puts in their two weeks.
How to reduce regrettable turnover
While having low retention rates has always been an expensive business problem, employee turnover is particularly “regrettable” when you lose high-performers. We gathered a panel of experienced HR leaders to discuss this very topic at our 2022 HR Hacks for Business Virtual Summit. The panelists agreed that identifying your top performers and prioritizing their engagement is critical to retain top talent.
“Top talent wants a voice,” said Rebecca Edwards, CEO of Infinite HR of Charlotte. “They understand the value they bring to your organization… They want to make clear that ‘this is what is important to me; this is the incentive that means something to me.’ Because when we talk about incentives and things that retain employees, they can look very different for different individuals. It means giving those [high performers] a voice and making sure their manager understands what they need—and as an organization, giving those managers the flexibility and resources to supply that to their employees.”
By getting regular feedback from top performers before they start polishing up their resumes, you can find out what they need for a better employee experience. It’s crucial to uncover what’s holding employees back from doing their best work, so you can champion the necessary changes to create a more engaging, productive, safe, and inclusive environment.
Managers can play a significant role in turnover
A bad manager can majorly impact an employee’s decision to leave your company—just as much as a great manager can help keep them around. According to our 2022 Workplace Report, more than half (53.8%) of American workers say one of the top reasons for leaving a company is unsupportive management, while an even greater number (57.6%) say supportive management and a good boss are two of the most important factors for them to stay at their company.
HR leaders can play a different (but just as critical) role in retention by identifying what a good manager looks like and developing a plan for upskilling managers across the organization to reach that level.
Get the HR Leader’s Guide to Reducing Regrettable Turnover
While reducing turnover cannot happen overnight, properly designed employee experiences can predict and prevent turnover, and ensure that top performers stay at the organization and contribute to its ability to thrive.
Get the latest guide from 15Five to dive deeper into regrettable turnover and how to reduce it in your organization.