Employee attrition—better known today as The Great Resignation—is shaking companies at their core.

Job openings and resignations are both increasing. HR leaders need to keep employees around while getting new employees to jump on board.

Here's what HR leaders need to know about employee attrition and how HR can convince company leaders that addressing employee attrition is crucial.

This blog post was inspired by Nivati's HR Leader Brain Trust on November 9th, 2021. You can check out the after-party recording which covers this topic below.

What is employee attrition?

Employee attrition is the reduction in staff that occurs when employees leave a company but are not replaced.

As an HR leader, you know the importance of keeping employees around. The cost of replacing one employee can be 1.5 to 2 times an employee's salary!

Before talking to executives about employee attrition, it's good to brush up on the impacts.

Employee attrition impacts the entire company culture, from top to bottom.

Morale suffers, productivity decreases, and talent is lost—not to mention the financial impact.

Just like any team, losing members wears on the group.

The Factors Affecting Employee Attrition

So—how do you explain to executives why employee attrition is increasing?

There are a few things you can touch on.

 
• Remote work and the pandemic have shifted priorities. Employees value work-life balance and flexibility more than ever. Employees want to be evaluated by their output, not just how many hours they sit at their desk, and they won't put up with employers that do the latter. Employees are sick of unrealistic expectations.
 
• Maintaining employee engagement has become more challenging. In a remote work environment, it requires constant nurturing.
 
• Mental health challenges are increasing, and employees expect to be supported by their employers in all areas of wellness—financial, mental, physical, and more.

Measuring Employee Attrition to Make Your Case

To make the case that leadership should prioritize employee attrition and retention, you may need to show numbers.

To measure your employee attrition rate, divide the average number of employees lost by the average number of employees and multiply it by 100. Make sure to specify the period of time you are measuring to get an accurate percentage.

But what about the financial impact of losing those people?

Many things can tie into your employee attrition impact calculation:

 
• Salary of the person lost
 
• Cost of training the employee that left and the new employees that will be brought on
 
• Cost of a headhunter of staffing agency
 
• Lost productivity

However—the truth is that it is challenging to get an accurate number that encompasses the negative impact of attrition.

Sarah Steers, VP of HR at Escalade Sports, a guest at November Brain Trust, stated: "For me, it's less about the dollars and more about the overall impact on the whole organization."

When talking to your company's leadership team, stress the impact of that person while they were at the company and the hole they left in the organization now that they are gone. If your company can't keep top talent around, none of the business functions will work properly, customers will turn away, and so will investors.  Leaders are challenged to reevaluate what really matters. What do you expect of your people, and how does that impact the business?

Leadership needs to give people clarity in their roles, especially in a remote environment, to solve problems effectively.

You can help the leadership team reevaluate priorities and set expectations for employees across the organization.

For more tips on getting company leadership on board, check out the article: 5 Ways HR Leaders Can Get Executive Team Support

‍Sign up for our next HR Leader Brain Trust by signing up here.  

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