Employee attrition: Why it’s good?

employee attrition

HR and business heads are thoughtful and concerned when they review employee attrition numbers for their business. Replacing talent is expensive, and high employee turnover can negatively impact business performance. Employee attrition normally gets associated with increased hiring expenses, lost productivity, high cost of training new hires, etc.

In this post, I have tried to look at the brighter side of attrition. These may not be applicable to all scenarios, but will allow you to reason out some value from your businesses attrition metrics, even when you see people leaving.

Why employee attrition is good?

  1. It allows you to figure out what’s wrong with your business. The “wrong” could be related to your business, your products, your people processes, the team, the managers, your organisations culture, etc. People leave when they don’t get an expected or desired value from their job or the workplace – the value could be challenge, thrill of doing quality work, compensation, learning, growth, respect and appreciation, or fun.
  2. Fresh blood is good for your business. It’s good to have new ideas and intelligence from industry and competition. A healthy churn always allows your business to refresh the talent pool on an on-going basis. When employees leave, you can easily bring in the best of talent from competition, other industries, etc., thereby enabling a diverse mix of experience at workplace.
  3. You must be doing something right. If you in a high growth business, and competition is on look out to poach your people, you should feel good. Your business must be doing something good to motivate others to trust the talent that has some experience with your company. May be you are a good training ground, may be a job with your firm allows employees to learn faster.
  4. It helps you to do away with excess flab. For most businesses, attrition figures are anywhere in the range 10 – 35 % (annualised) or more. For employers expecting a restricted or marginal growth, attrition is a good way to cut flab – potentially excess and unwanted manpower.
  5. It helps you extend your business network further. This may really be valuable for small businesses. When your employees leave and migrate to other firms big or small – your network extends to the their new firm. This is more so true if the separation was smooth without any bad blood. Next time you need any help, information, or networking support your ex-employee, ex-colleagues can help.

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Note: Also published on LinkedIn on 21st July 2014.( Praveen Mishra)

Praveen Mishra

Praveen is the Founder and Principal Consultant at Khedge Business Consulting Pvt Ltd. He works with organisations in areas of business strategy and human-resource management. Over the last 15 years he has helped various organisations with their HR processes, structure, alignment and effectiveness; and talent strategy and processes. You can connect with him at praveen@khedge.com. 

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