Attrition is defined as the voluntary or involuntary reduction in staff. It is due to various reasons like employees quitting or retiring, the termination of job contracts. It can even happen if the company decides to take a position or two redundant. In either, it costs a lot to a company.

According to a study by the Center for American Progress, the cost of employee attrition varies and so does the cost to reduce attrition. Usually based on the role of employee and their salary/wage level.

The finding

  • Low-Paying Jobs (Annual earnings less than $30000): The average cost of replacement came out to be around 16% of the annual salary.
  • Mid-Paying Jobs (Annual earnings between $30000 and $50000): The average cost of replacement came out to be 20% of the annual salary.
  • High-Paying Jobs (Annual earnings above $50000): The average cost of replacement was found to be as high as 213% of the annual salary.

As is clear from the above findings the cost of attrition and subsequent replacement increases exponentially as we move from low-paying jobs to high-paying jobs.

However, irrespective of the pay scale one thing that is a constant is that attrition and subsequent replacement can be a significant cost for the organization.

Widespread attrition and negative consequences

1. Lost Productivity

More often than not, an employee who comes in as a replacement for the one who has left is not immediately able to hit the ground running.

He/She has his/her learning curve to follow which thereby causes a certain degree of lost employee productivity. For some complex roles, the learning curve can even extend into a couple of years or so.

2. Lost Knowledge

Though difficult to quantify in monetary terms, a leaving employee takes with him a vast amount of shared as well as individual knowledge. In the worst case, a competitor company gets hold of your knowledge.

3. Employee Morale

Unexpected attrition can even result in the waning of employee morale. Sometimes it may happen that an employee respected, loved or looked up to by others may leave thereby affecting the overall employee morale.

4. Higher Replacement Package

Oftentimes it is not easy to fill the vacant position without offering a considerably higher replacement package. More important or rare the skill is the higher will be the placement package to attract good talent.

5. Domino Affect

It may also happen that the employee who leaves may get a really good opportunity outside or may start doing some other attractive venture which might cause other employees to consider leaving as well in the hope of replicating the success of the earlier employee. 

6. Client dissatisfaction

There are some businesses in which relationships with the clients are of paramount importance. Here it occurs that the client oftentimes forms a relationship with a particular employee rather than the company as a whole.

An employee leaving might hence cause a certain degree of client dissatisfaction in such a case.

The above and many more associated costs reveal how attrition can oftentimes be a considerably large cost head on the company’s sheets.

Hence robust steps are important to reduce attrition and thereby prevent its associated costs. So how do we do that?

One effective yet often overlooked way to control attrition is through regular training. We hereby discuss how training can be an effective tool to combat the menace of attrition. Read about why you should invest in Corporate Training?

The widely revered US motivational speaker Zig Ziglar once said,
What’s worse than training your workers and losing them? Not training them and keeping them!”

This adage is a strong indication of the important training has not just in controlling attrition and retaining employees but also in their overall development and career progression.

To better understand how training can work, we first need to understand that one major reason why an employee leaves a company abruptly is a considerable lack of growth opportunities. This may result in the subsequent dissatisfaction as no employee wants a stagnating position and job responsibility.

Lack of good training can further increase the dissatisfaction.

Growing and learning in an organization, more often than not, go hand in hand. Adequate skills and training programs are important at every stage of the employee’s journey. This helps to reduce attrition.

Hence training becomes an essential tool to keep the employee motivated and engaged to seek a long term relation with the concerned organization.

How training can reduce attrition

1. Ice Breaker

Generally upon joining, the very first major interaction of the employee with its employer and even fellow employees occurs during training.

An interactive, insightful training schedule, hence, might foster strong relationships and bonds. And a training schedule meeting or exceeding expectations hence can set a strong foundation for a long and everlasting relationship.

2. Value Addition

First and foremost training acts as a value addition for an employee. Including relevant certifications can also enhance an employee’s motivation to put in that extra effort to complete the training.

This is helpful. As the training gets positive participation from the employees. This thereby contributes to the satisfaction of an employee and eventually reduce attrition.

Value addition as a way to lengthen an employee-employer relationship. Send top employees to lucrative projects. Scholarships could also be offered to promote higher education among employees.

3. Improve Communication

Regular training especially that conducted through face to face interaction helps to reduce attrition. It provides an opportunity for employees to interact with each other and hence improve inter-personal communication.

Also, training sessions on communication can be conducted as well. These improve interaction among employees. Thereby enhancing employee satisfaction and reduce employee reduction.

4. The sense of Being an Insider

An employee being invested upon by the organization in terms of training and skill development also may tend to develop a feeling of being an ‘insider’ in the company and hence is expected to stay longer and also be inclined to put in more effort.

5. Specific Training Advantages

Broadly speaking there are two categories of training: general and specific.

How general training helps to reduce attrition

It refers to imparting those skills that are not limited to being role and organization-specific. Whereas Specific training refers to imparting skills specific to the particular company. Training especially specific might, therefore, be beneficial in our methods to reduce attrition.

Hence it is clear from the mentioned advantages that training instead helps enhance employee motivation and involvement. This is contrary to the popular misconceptions of training leading to the trained employees seeking employment elsewhere. Also, training is not worthless because the employee would be leaving in any case.

This further leads to employee satisfaction which accordingly reduces attrition.

However, to conclude the importance of training, it is not a certainty that training alone would always be sufficient to counter unwanted attrition. Other related activities also need to be provided to reduce attrition.

Other ways to reduce attrition

1. Improve Work Conditions and provide a pleasant workspace

Steps like, promoting work-life balance, improving the working atmosphere, etc are important. These can go a long way in improving employee engagement.

2. Thorough Exit interviews

Exit interviews are an excellent opportunity to gain valuable feedback from exiting employees. You could know more about the steps a company might take to prevent(or rather lower) further attrition.

3. Competitive benefits and supportive management

Supportive management and competitive benefits also are important requirements to enhance employee satisfaction.

FOR ANY Training REQUIREMENT, PLEASE FEEL FREE TO WRITE TO US AT [email protected] / CALL US AT 95.5511.5533.


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