Employee attrition

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Employee attrition (or so called labour turnover) refers to the movement of workers, and more specifically their actions of taking the job, and job resignation in particular company during a specified period.

Causes of employee attrition

Employee attrition may be:

  • voluntary - caused by his resignation. Due to such factors as: the atmosphere at work, relationships between superiors and co-workers, emergence of new possibilities of work - one that will bring him greater benefits (eg. better salaries),
  • non-voluntary, that is, independent from the employee, arising from the company rules, decision of superiors or other unexpected events. Including:
  • the dismissal of an employee due to, in particular, reduction of staff,
  • liquidation of the workplace,
  • termination of the job contract, which was signed for a fixed term,
  • disciplinary dismissal,
  • resignation,
  • finished implementation of a project,
  • the ageing of worker,
  • transition to retirement or pension,
  • illness or death of an employee.

Employee attrition as a positive phenomenon

Labour turnover can be treated positively by a management, especially when employee turnover rate level is moderate. Positive effects of staff turnover are:

  • creation of new jobs for people whose skills, qualifications and demeanour or behaviour better meet the needs of the company,
  • dismissal of people who have negative and harmful impact on the implementation of the project or the work or the behaviour of other employees,
  • staff mobility within the enterprise (for example, associated with the promotion) gives them an opportunity for professional development. This is the motivation to better fulfil their obligations and desire to learn new skills,
  • low liquidity level of employment indicates a good management system in organization.

Employee attrition as a negative phenomenon

If the level of employee turnover rate is relatively high, it can cause several negative effects for the company, including:

  • costs for the company in connection with the dismissal of the employee (eg. the cost of clearance),
  • costs incurred in connection with hiring a new employee (eg. training costs),
  • no person employed at the particular workplace contributes to problems with project implementation within a specified period,
  • routine, habit and lack of motivation to action, caused by lack of employee movement within the company,
  • high level of employee turnover rate proves incorrect management of the organization.

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