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What is a Bad Attrition Rate?

Published on May 3rd, 2023

Attrition rate is a critical metric in measuring the effectiveness of an organization's recruitment and retention strategies. As a recruiter, you need to understand what attrition is, what constitutes a good or bad attrition rate, and how it affects your business. In this blog post, we will provide you with an insight into the bad attrition rate, its impact on your organization and how to reduce it.

Simply put, attrition rate is the number of employees who leave a company over a given period. A high attrition rate is not always a bad thing; it is prudent to change and adjust the workforce to meet business goals, but the issue of concern is the frequency with which it occurs.

Experts warn that when attrition is high, it's a sign that something is wrong with the company; it could be due to poor leadership, salary cuts and employee engagements, among other factors. The common consensus for the ideal attrition rate is between 10-15% annually, and anything higher than 20% should raise alarms.

A bad attrition rate comes with hefty costs to the organization; besides the logistical issues of filling the vacant positions, it costs the organization money for advertising, recruitment processes, and orientation. The cost of replacing just one employee can range from 6 to 9 months of their salary, and that is not even considering the losses in productivity and diminished customer service that can come with turnover.

Furthermore, high rates of attrition can significantly impact employee morale and job satisfaction, which in turn impacts the customer experience. Customers may receive suboptimal service, product quality can be affected, and the organization's reputation may take a hit. Therefore, employers must take steps to lessen the risk of high attrition rates.

One way to do this is by conducting exit interviews with employees leaving the company, analyzing the reasons behind their departure and taking appropriate action. Employee relations are essential in retaining an engaged and satisfied workforce; meaning that an organization can improve by creating a culture where employees feel valued and fulfilled at work.

Recruitment teams can also benefit from analyzing employee data, such as demographics, job titles, benefits, and salaries, to identify employee groups or trends that indicate higher-than-usual attrition rates. This knowledge can be used to address any underlying issues proactively.

How to Avoid Bad Attrition Rates?

Organizations often strive to reduce employee turnover or attrition in order to maintain a stable and productive workforce. To achieve this, organizations should address the root cause of the problem. One effective way of doing so is by sourcing the right people for the job.

By automating the process of candidate sourcing, companies can significantly reduce their attrition rates. EasySource is an automated talent sourcing tool that recruiters can use to identify and engage suitable candidates. With the help of its integrated ChatGPT feature, recruiters can send highly personalized messages to potential candidates and discover talent that fits their organization.

In summary, the EasySource tool could be a valuable asset for organizations looking to address high attrition rates and improve their workforce stability.

Conclusion

High attrition rates can be detrimental not only to the organization but also to its employees and customers. The ideal attrition rate is between 10-15%, anything higher than 20% should be considered a red flag. As a recruiter, it is your responsibility to identify the cause of employee churn and develop strategies to address it. Remember, happy employees are productive employees, and by creating a positive organizational culture, employees are more likely to stay with the company.


Authors

author

Radhika Sarraf

Radhika Sarraf is a content specialist and a woman of many passions who currently works at HireQuotient, a leading recruitment SaaS company. She is a versatile writer with experience in creating compelling articles, blogs, social media posts, and marketing collaterals.

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