Make Smarter Talent Acquisition Decisions with Our Latest Insights on India's Job Trends Download Now!
Employee-Attrition-Banner-Image-2 />

An Overview of Employee Attrition and How to Prevent It

Manish Gupta - Chief Growth Officer at Taggd
By Taggd Editorial Team


min read

sign up and join the careers circle to unlock this article

Find more curated content by Taggd

sign up sign in


Imagine a prosperous business with pride in its brilliant staff and innovative projects. However, employee attrition, a hidden but substantial concern, looms in the background. Despite its success, the company has trouble keeping its top performers, leading to a never-ending hiring and training cycle that depletes resources and stifles development. In the cutthroat corporate environment of today, this scenario is all too often underscoring the urgent need to comprehend staff attrition and take preventative steps.

When discussing employee attrition, various factors include terminations, retirements, resignations, and unplanned incidents. As we know, the excessiveness of anything is nothing but trouble; similarly, excessive attrition can be an extra expense for companies regarding recruitment costs, the loss of institutional knowledge, and team cohesion. However, a standard degree of turnover is inescapable and may even aid in businesses’ success. Organizations must take a proactive technique to address the underlying grounds for attrition and establish an atmosphere encouraging employee engagement, contentment, and dedication. This blog will look at different parts of talent attrition and how to prevent it .

Employee Attrition: Overview

Leaving a company either voluntarily or involuntarily is referred to as employee attrition. It is a way to gauge how frequently workers leave an organization over a given period. Differentiating between voluntary and involuntary attrition is crucial. Employees who willingly leave an organization do so of their own unrestricted choice. However, those who voluntarily leave an organization due to circumstances beyond their authority, such as layoffs or termination, do not.

According to our Decoding Jobs Sectoral Reports, more than 2 million IT workers are anticipated to leave their employment by 2025, adding to the sector’s already challenging circumstances with attrition rates between 23-25%. Despite organizations’ best efforts, the situation still seems terrible. With the Indian IT sector employing over 5 million people and currently valued at $227 billion, the impending loss of talent raises serious concerns.

Employee Attrition Vs. Employee Turnover

Employee Attrition: Employee attrition is the natural process of employees departing a company over time. Both consensual and involuntary separations are included. Attrition can happen for various reasons, including employee departure for other possibilities, retirement, termination, or layoff. It is a gauge of the pace at which workers leave a business.

Employee Turnover: “Employee turnover” explicitly refers to the frequency employees depart from a company and must be replaced. Typically, it concentrates on voluntarily ending relationships, like resignations. When calculating turnover, it’s common to use a percentage representing the number of departing employees divided by the total number of employees over a given period.

What Causes Employee Attrition?

Attrition rates are rising in the Indian IT industry for a number of reasons. Attrition rates for contract staffing have significantly increased, rising as high as 55% from 49% the year before. Similar turnover rates of between 25 and 30 percent have been observed among permanent hires, indicating a concerning trend. These figures from our Decoding Jobs Sectoral Reports highlight the difficulties the industry has in keeping its skilled employees.

While Accenture does not share country-wise attrition rates, it was 14 percent for the company as a whole last year. Accenture globally has a strength of 674,000 people. Millennial and GenZ employees make up nearly 90 percent of the workforce of Accenture in India. The company encourages employees to set personalized priorities, and the performance management process helps managers focus on these priorities and share continuous feedback. “Our purpose, which is to deliver on the promise of technology and human ingenuity, shapes our overall growth strategy and priorities,” says Lakshmi, C., MD and Lead-Human Resources, Accenture in India, mentioned in our report of Best Companies To Work For.

Following are a few typical reasons for talent attrition:

Lack of Career Advancement: Employees who perceive little room for growth and advancement in their current positions may look for opportunities elsewhere. Attrition and disengagement can occur when a lack of a defined professional path or development opportunities exists.

Inadequate Compensation and Benefits: Employee retention depends heavily on competitive compensation. Employees may be inclined to look into positions with greater pay and perks if they feel their pay needs to reflect their contributions or the market value of their talents.

Poor Work-Life Balance: An unbalanced relationship between work and personal life can cause burnout and employee discontent. Employees may look for opportunities that offer a better balance if an organization frequently requires long working hours or fails to offer flexible work arrangements.

Lack of Recognition and Appreciation: Employees thrive when their contributions are recognized and valued. They may feel underappreciated and disconnected when their efforts go undetected or unappreciated, which can eventually result in talent attrition.

Poor Leadership and Management Techniques: Managers and supervisors are vital to employee retention and happiness. Employees may leave the company due to a lack of proper management, micromanagement, support, or a toxic work environment.

Strategies to Prevent Voluntary Attrition

Equip Managers with Effective Management Skills: Recognise that effective management calls for a specific set of abilities. Develop your managers’ leadership and team-supporting skills by offering thorough training programs. Investing in management training ensures the retention of competent managers, which also lowers worker attrition.

Conduct a Salary Survey and Benchmark Salaries: Conduct a thorough salary survey to assess your pay structure. Make sure that your pay is fair and in line with market prices. Retaining employees is difficult if they believe their pay is below the industry average.

Implement Stay Interviews: Hold stay interviews to show that you genuinely care about the opinions of your staff. Use the information you learned from these interviews to change and improve the organization as needed. Employee retention is improved and prevented by acting on the feedback obtained.

Foster flexibility: By accepting flexible work arrangements like flexible start times or remote working alternatives. Many jobs can be successfully carried out from home, based on the lessons learned from the move to remote work in 2020. By allowing flexibility, employers can increase satisfaction among workers and lower attrition.

Ensure Accurate Job Postings: Create job postings that are true to the position being offered and your organization. Higher attrition rates may result from candidates being misinformed about the requirements of the job or the workplace. Candidates that genuinely want to work for your company are more likely to apply when job advertisements are transparent.

Review and improve the perks and benefits: Make sure your benefits and perk package are consistently reviewed to reflect your staff’s changing demands and preferences. Take into account their demographics and modify the services as necessary. For instance, younger staff members might emphasize perks differently than those with family obligations.

Wrapping Up

Numerous businesses only pay attention to staff turnover rates, which can exclude crucial information. You must be aware of employee turnover at your organization, its reasons, and the best ways to handle skills gaps. According to a recent study, employees typically leave their jobs over issues employers might resolve. Long-term workforce planning techniques can be used to control attrition so that it does not negatively impact your organization by having a clear grasp of the reasons for employee attrition at your company and an overview of your attrition rates.

To increase employee retention, use Taggd’s knowledge to find the perfect fit for various positions. Organisations can boost the possibility of sustained employee engagement and satisfaction with Taggd.

By Manish Gupta

Chief Growth Officer