Recruiting and hiring can be one of the more time consuming and expensive parts of any business. Whether you are in manufacturing or medicine, losing key employees can reduce productivity and lower employee morale. It’s not always easy to fight a high attrition rate, but in many cases, it starts with building value in and for your remaining employees.

Is Your Company’s Attrition Rate Too High?

If you run a manufacturing company with many workers, it can feel like you are constantly trying to fill open positions. In other professional service industries, like accounting and medicine, even a single vacancy can significantly impact your productivity. It may feel like you are constantly losing employees, but how do you know if your attrition rate is too high? Let’s start with the numbers.

To calculate your company’s attrition rate, pick a meaningful period of time, maybe the last fiscal year. Then count up:

  • The number of people who left (quit or were terminated)
  • The total number of people employed at the start of the period

Divide the first number by the second number and multiply by 100. That is your attrition rate.

Once you have the number, you need to know what to measure it against. National factors and the global economy can affect your attrition rate and make it more or less difficult to replace skilled employees.  When unemployment rates are low and workers are scarce, employees are bolder and more likely to leave stable jobs to improve their circumstances. When the unemployment rates rise, there are more competition for jobs and employees will think twice before leaving your company. This is particularly true of more competent and ambitious staff.

The voluntary employee turnover rate for all industries was a record-setting 27% according to a 2019 Work Institute report. However, employee retention varies widely in different sectors. High-stress, fast-paced industries often have attrition rates over 100%, while utility companies and the insurance industry are far lower (8.8% and 12.2% respectively as of 2016). A workplace consultant can help you calculate your current attrition rate and measure it against your industry average and national trends to see whether you have an employee retention problem.

Ask Your Workers Why You Have a High Employee Turnover Rate

Once you have the numbers in hand, you will want to take steps to bring your attrition rate down. The path to high employee retention starts before your workers are ever hired. The best strategy is to start with the workers who are leaving. Consider developing an exit interview or survey that you can give to employees who submit their notice. Over time, you will start to see trends such as:

  • Low wages
  • Long work hours
  • High performance expectations
  • Challenging workplace culture
  • Personnel differences with managers and supervisors
  • Hostile work environment

may want to hire a business consultant to perform these interviews.  Usually, even former employees will not truthfully tell you or one of your managers why they are leaving. Once you know what is driving your staff away, you can develop strategies to fix the problems.

You can be ahead of the curve by not waiting until a worker has already left to ask what could be better at work. By asking current employees to identify the worst parts of their jobs, and committing to improving them, you can help keep the staff you have and reduce your employee attrition rate.

Building Value for Employees

The key to retaining high-quality employees – the ones who work hard and don’t cause problems – is in giving them reasons to stay. Sometimes that can be as straightforward as a raise, but not always. In many cases, employee loyalty has more to do with the value they derive from what they do than the amount of money they earn. Consider offering flexible schedules or the possibility of remote work. Prioritize developing a welcoming work culture. If your primary concern is keeping your top performers, the answer may be to invest in your employees individually.

Training and Leadership Coaching Helps Employers and Employees

Losing entry level workers can cost your business time and money as you find replacements, but the higher up the corporate ladder you climb, generally the more valuable your employees become. If you are seeing turnover among your managers, supervisors, or department heads, it may be time to invest in your employees. One reason people leave these mid-level positions is to advance their careers.

You can fight this by giving your high-value employees reasons to stay and improve themselves where they are. Ask your employees where they see themselves in a year, 2 years, or 5 years, and then help them identify the skills they will need to reach their goals. Offer skills training, mentoring, or leadership coaching to help them transition from an adequate middle manager to a successful leader within your company.

Spending time and resources developing your managers can also improve your company-wide attrition rate. Nationally, 57% of workers have left a job specifically because of their manager. Another 32% have considered it. When a manager lacks empathy, is disrespectful or unprofessional, or ignores employee concerns, it can cause entire teams to turn over in search of happier work environments. By providing those managers training, professional education, and one-on-one mentoring you have, you can save time, money, and frustration and successfully fight a high attrition rate.


David Stanislaw is an organizational development specialist with over 30 years’ experience helping employees and companies find their value. Through one-on-one executive coaching, David helps small and medium-sized businesses reduce attrition and get the most value from their employees. Contact us to meet with David to start improving your employee retention today.