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Know the Difference Between Employee Attrition vs. Employee Turnover

The GoodJob Team | June 19, 2023

Employee attrition and employee turnover are two essential HR measurements for every organization. Though often used interchangeably, both measurements carry different definitions and weights amid their meanings. 

Understanding the distinction between an employee attrition rate versus an employee turnover rate helps HR leaders navigate the complexities of employee engagement, recruitment, and retention. Keep reading to get a comprehensive overview of employee attrition vs. employee turnover that helps guide HR leaders in making informed decisions.

What Is Employee Attrition?

Employee attrition occurs when employees leave a company or organization for any reason, whether it be in search of a new opportunity, retiring, leaving the industry or workforce, or seeking a better salary. Attrition is natural and typically occurs in an organization, with rates fluctuating due to a variety of societal and economic factors.

It’s normal for employees to move to different roles or organizations in the course of their careers. However, unusually high attrition rates could be an indicator of underlying issues within an organization, such as lack of advancement opportunity or poor role fit. According to the U.S. Bureau of Labor Statistics, 3.9 million people voluntarily left their position as of March 2023, which poses the question: Why? HR leaders should take note of the reasons why employees are leaving, whether it be for opportunities elsewhere or due to a deeper-rooted issue within the organization that could cause attrition rates to continue to climb. 

What Is Employee Turnover?

Employee turnover is different. Turnover is caused by unexpected or forced departures, such as layoffs, terminations, and resignations due to employee dissatisfaction, a volatile work environment or a bad role or culture fit.

In these cases, it’s generally not considered normal for employees to be leaving an organization prematurely, and HR leaders should pay close attention to their employee turnover rates. The U.S. Bureau of Labor Statistics reveals 1.6 million people were fired or laid off as of April 2023. The hardest-hit industries include construction, accommodation, food services, healthcare, and social assistance.

What Are the Effects of Employee Attrition or Turnover?

Employee attrition and turnover effects are felt at nearly every level of the organization. Attrition can lead to decreased job satisfaction and morale as colleagues leave and new hires are brought in to fill the open positions. This can lead to increased strain on the remaining workforce, as well as increased costs associated with recruitment, onboarding, and retraining.

Turnover, on the other hand, can be even more damaging. High turnover rates often indicate underlying problems with HR policies, management practices, and workplace culture. This can lead to a scarcity of talent and a drop in morale and productivity, leading to a decrease in customer satisfaction and company reputation in the industry. Similar to high attrition, recruiting and onboarding replacements can be costly.

How Can HR Leaders Manage Employee Turnover?

According to SHRM, the top three reasons for employee turnover are inadequate pay, lack of career advancement opportunities, and lack of workplace flexibility. HR leaders can proactively manage employee attrition and turnover by investing in employee engagement and retention. Proactive measures include offering competitive benefits packages, providing ongoing training and development opportunities, and creating clear pathways for career growth. 

Additionally, companies should invest in proactive employee engagement initiatives, such as team-building activities, wellness and wellness events, and rewards and recognition programs. By investing in employee engagement, companies can reduce employee attrition and turnover, resulting in increased job satisfaction, productivity, and morale.

The GoodJob Solution

Another way organizations can manage attrition and turnover is by enhancing their hiring process and employee engagement with GoodJob’s behavioral science based PATH Assessment®.  Assessment results paint a clear picture of who a person is in the workplace, how they learn, how they work, and what makes them successful.

GoodJob’s innovative software platform empowers HR professionals to find quality candidates that match the values, culture and behaviors of their organization. Our proprietary PATH Assessment® and Job Role DNA provides employers with in-depth profiles of potential candidates, giving them valuable insights into whether or not a potential hire will be a good fit for the company based on their workplace traits and behaviors. 
Happy employees mean improved productivity, higher morale, and higher retention. Schedule a call to learn how GoodJob can help you develop an engaged, thriving workforce and lower your company’s turnover rate.