top of page

THREE Leading Indicators of Attrition – Stop It Now!

Updated: 6 days ago




Attrition is either voluntary or involuntary. It can happen on the spur of the moment, through planned RIFs, or opportunistically. Regardless of how it happens, or why, it comes at great expense for employers. 


The cost of attrition can include recruitment, onboarding, training, delayed projects, and depending on the level or scarcity of candidates, it can even have costs related to relocation, family accommodations, and so on. Replacing a mid-level employee can incur costs that are 1.5 times their annual salary. It’s expensive. 


Voluntary attrition usually comes with little notice and a high degree of organizational pain and cost. How can you be on the lookout for employees that are thinking about leaving. After all, you can’t read employees’ minds.


Which top three leading indicators can offer clues?


  1. Decreased Engagement or Enthusiasm: A decline in expected output, engagement, or enthusiasm for work projects can signal potential attrition. Monitoring these factors can help companies identify employees who may be at risk of leaving. Observe:

    • Engage department heads to observe their team members for:

      • Work takes longer to complete than it could have.

      • Only putting in the minimum amount of effort necessary to get the job done.

      • Arriving late and/or leaving early without supervisor approval.

  2. Reduced Participation in Company Activities or Employee Surveys: A decrease in participation in company activities or employee surveys can be a leading indicator of attrition. This lack of engagement may indicate dissatisfaction or disconnection from the organization. Measure: 

    • At PARiTA, we use our PARiTApulse platform to measure

      • Inclusion,

      • Belonging, and

      • Engagement.

    • We compare responses by employee groupings, like race or generation, to see what’s really behind the mass exodus for the door.

  3. Increased Absenteeism without Clear Reasons: A sudden increase in absenteeism without clear or meaningful reasons can be a warning sign of potential attrition. This behavior change could indicate underlying issues that may lead to an employee leaving the company. Measure: 

    • At PARiTA, we use our PARiTAinsight platform to get the whole story, we measure days leave of absence by: 

      • Type of leave,

      • By department, and

      • By key demographic groups.


Understanding that your employee may be on the way out is important, but even more so is creating a work culture where employees want to stay. People leave a company largely for three reasons: compensation, recognition and career growth.


Let's dive into what that means, and which best practices you have to handle it.


Reason 1: Total Compensation (Including Benefits)


There are two types of compensation issues for employees:

  1. Occupational segregation (or vertical segregation), is a technical term used to describe when one demographic group is generally found in lower paying jobs and another in higher paying jobs; and

  2. Unequal pay (or horizontal segregation), which refers to people not receiving the same pay for the same or similar work. While there is a far bigger pay gap in occupational segregation (about 16%) than from unequal pay which, on average in the US, is about 1%

      

Pay is the number one reason why employees voluntarily leave the organization. Regardless of which issue is at play, a pay gap that is too wide or simply doesn’t appear to ever close can lead to unhappy employees. They may start to believe there is no hope for their career at their current place of employment and will often start to look around for better opportunities.


Three best practices to help you:

  • Measure it! Workforce analytics platforms like PARiTA can show you both your adjusted and unadjusted pay across your entire organization. See our Equal Pay Report for formulas you should consider to identify your pay gap, both adjusted and unadjusted. 

  • Understand it! Know which demographic or socio-economic groups are paid the lowest and the highest in your organization. This will help you better understand the impact of your recruitment program, the fairness of your approach to promotions, and your overall training and preparedness programs for employees advancing up the ladder.

  • Track it! Follow your progress over time using longitudinal visualizations to see if you are tracking to your compensation goals or not. Take action when you don’t see adequate movement. Investigate at the division or department level to see where the issue exists the most. Platforms like PARiTA can help you with this by showing you, within seconds, where the issue is most prevalent.  

 

Reason 2: Lack of Recognition for a Job Well Done


A recent study found that when employees don’t feel appreciated they tend to start their job search in earnest, looking for a place that will recognize and reward them for their talents.   

     

Three best practices to help you:

  • Just say it! Simple recognition has incredible value. According to a Gallup and Workhuman study, by simply making recognition an important part of company culture, a 10,000-person organization with an already engaged workforce can save up to $16.1 million annually due to reduced employee turnover. Create a multi-faceted plan of recognition across your organization. 

  • Just do it! Create a simple program encouraging employees to recognize their fellow employees for acts of kindness, jobs well done, thank yous for help, etc. by giving them a pre-printed paper or digital version of a recognition “badge” or note with a space on it to describe the thing they did. These notes can be sent from the CEO, a peer, a boss, or anyone in the organization. 

  • Talk about it! Take the time during every all-hands meeting to acknowledge a few employees that have gone above and beyond what was asked of them. 


Reason 3: Lack of Career Growth and Development


It’s often difficult for underrepresented people to get an organization’s attention to consider them for higher roles. One of the reasons is because human beings tend to be pattern matchers. They tend to make decisions based on the way things have always been done.


To get a diverse set of job candidates ready to move into more challenging (and often higher paying) roles, it’s important to change things up. The first thing to do is to identify your high potential performers, or HiPo’s. Ensure that there is a representative mix based on gender and race or ethnicity. Once identified, spread the development opportunities out.


When you do that, you’ll have a ready pipeline of diverse talent for the next big job that opens up.


Three best practices to help you:

  • Sponsorship (not just mentorship). Mentors are wonderful sounding boards for employees who have aspirations for advancement in an organization. But if you are a HiPo employee and you want to get ahead, and I mean really get ahead, you need to have someone in the room advocating for you when special assignments, promotions, salary increases, or bonuses are being handed out. If someone is on your HiPo list, assign them a sponsor that is at least 1-2 levels above them. 

  • Stretch assignments & job rotation. There probably aren’t enough open seats to promote all of your HiPo employees at once. Ideally, they are all at different stages of development and their advancement plans should reflect that. Those that are 3-5 years away from that executive level job should be given at least a couple of stretch assignments focusing on expanding their skills and thought process. A part of stretch assignments is job rotation where you literally drop a talented employee in a new role that they may not have experience in doing, but they have the skill set to figure it out and excel. When the big job comes open, you will have a diverse set of employees to choose from that are not only well rounded and prepared, but tested and ready to take on what the organization needs.

  • Leadership development training. Offering your list of HiPo employees leadership training is a must. There are a number of 2, 4, or 6 week or more programs offered by universities or private organizations that offer very specific and customized training. These courses teach everything today’s leaders need to know from situational decision-making, self-awareness, and  ethics to courses in emotional intelligence. 


Voluntary attrition is something you can impact. With a team workforce platform like PARiTA that works  with division and department heads, you and every department head can identify where your attrition risk is and stem the tide and stop the leak going out your back door, now. 

Comments


bottom of page