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Employee Attrition Analysis: The Data on Turnover Rates

Employee turnover is one of the most significant – and expensive – challenges faced by U.S. employers across virtually all industries.


Data shows that replacing an individual employee can cost between one-half to two times the annual salary of that employee. That is in addition to the time and effort required to interview, hire, and train their successor. For an organization with 100 employees, annual turnover costs can soar well above the $2 million mark.


The good news is that unwanted attrition is largely a solvable problem. Particularly with ongoing advancements in analytics, it is now more feasible than ever to pinpoint and resolve the factors contributing to turnover.

Key Considerations for Employee Analytics


Not only can employee turnover be prevented, but it can also be predicted when a sufficient strategy is implemented for data collection.


The goal should be to identify the “who,” “when,” and “why” of unwanted employee attrition:

  • Who are the employees that are leaving/at risk of leaving?
  • When are employees leaving the organization?
  • Why are employees leaving the organization?


When properly executed, employee analytics make it possible to:

  • Learn why employees are leaving an organization
  • Determine which employee segments are at risk of turnover
  • Discover the motivations/intents of at-risk employees
  • Target at-risk employee segments with specific retention strategies


To maximize the success of your employee attrition analytics solution, keep the following things in mind.

Evaluate specific employee populations to gather applicable data.

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If the employees leaving an organization are lumped into a single, over-generalized group, it creates a major obstacle to addressing individual issues. Instead, an employer must explore why turnover occurs at various points in the employee lifecycle across various demographics/departments, roles, and so on.


For example:

  • Over 33% of new hires will quit within their first year. First-year turnover is an incredibly frustrating issue, particularly because it continuously sets back productivity. Therefore, one of the most productive steps you can take to reduce employee attrition is to learn why the first-year staff is choosing to leave your organization. This plan means evaluating onboarding processes, leadership behaviors, job expectations, and comparable factors.
  • Losing critical employees (referred to as “key talent turnover“) is a unique situation. So, it only makes sense that your approach to analyzing related data would also be different. This employee population may require you to accumulate data that paints a picture of management issues, career advancement prospects, employees’ goals, etc.


Each segment of the employee population serves as a piece of the puzzle, so your organization can ensure a comprehensive plan that makes improvements across the board.

Don’t underestimate the value of exit interview data.


It’s not uncommon for organizations to discount the usefulness of exit interview data, mainly because the turnover incident has already occurred. However, our research shows that employees’ reasons for leaving – which can be collected during an exit interview – are important predictors for future turnover.


It’s not only the questions asked in an exit interview that matter; the timing of the interview is also impactful. With a thoughtful, highly intentional methodology, you can turn each employee’s loss into an opportunity for learning.

Develop a clear understanding of the cost of turnover at your organization.


The true cost of employee turnover is vastly undervalued, often leading employers to be slow to take action. As you weigh the worth of investing in analytics solutions, it is extremely useful to calculate how much employee turnover costs your organization effectively.


There are both direct and indirect costs associated with turnover:

  • Direct costs of turnover include:
    • Separation costs (exit processing, unemployment tax, separation pay)
    • Replacement costs (administration for pre-employment, interviews, testing, orientation, relocation, etc.)
    • Training costs (materials, equipment, wages)
  • Indirect costs of turnover include:
    • Decreased productivity
    • Reduced morale
    • Loss of a reliable or high-performing employee


When you add up all the ways turnover translates into financial expenses, your organization is far better equipped to track the potential and actual return on investment with quality retention strategies.

Employees – not the employer – should be the focus.


While many platforms are advertised as employee engagement and retention solutions, a significant majority are missing a pivotal piece: provisions that give employees the voice they deserve.


The “Voice of the Employee” concept focuses on designing analytics solutions that compile the information that matters, boosting overall data quality and the overall success of short- and long-term improvement efforts. Based on a defined cycle that outlines consistent research and data collection, it creates an environment in which employees’ needs can be truly addressed.

In the absence of action, analytics are useless.


Data can teach us so much about the opportunities for improvement within an organization. However, analytics alone cannot change anything – your organization must use the data to take action.


Therefore, it is crucial that you partner with a team of professionals that can assist you in collecting and understanding the data in a meaningful way. And then, you must utilize the feedback to develop and carry out a suitable strategy to improve employee outcomes. From there, an organization should also consistently evaluate the efficacy of said strategy by tracking the progress of its objectives.


Think of analytics as the tool you’ll use to achieve higher employee retention rates, not a comprehensive solution in and of itself.

Customized Employee Attrition Analysis Solutions are a Must


Before implementing an analytics solution for your organization, it is important to understand that there is no “one size fits all” service. Every workplace is unique, as are its specific challenges. As such, to achieve measurable results, it is essential to carefully tailor a solution that aims at root issues.


Work Institute provides a diverse range of services to support reduced employee turnover, personalized according to each client’s distinct needs. Our goal is to provide employers with the practical data they need to develop actionable strategies for improvement, helping to create stronger, most efficient workplaces that benefit both leadership and employees alike.


Our services include:

  • Employee engagement studies
  • Exit interviews
  • Stay interviews
  • Pulse studies
  • Onboarding studies
  • Leadership and development solutions
  • Candidate experience studies


Work Institute empowers you with vital employee feedback information from initial recruitment efforts to employee exits. And because we balance employee-centered tactics with data science, our innovative approach drives meaningful outcomes.

Let Us Help You Reduce Your Attrition Rates Now


At Work Institute, our mission doesn’t end once we provide you with the relevant data. By supporting you through the collection and analysis of employee research data and the implementation and evaluation of effective strategies, our team will support you in achieving key objectives. At every stage of the process, we focus on delivering a personalized experience that sets you up for success.


For more information about how to reduce employee turnover by implementing an analytics solution, contact Work Institute today.


Image Source: Vitalii Vodolazskyi/nialowwa/Shutterstock