Employee Offboarding
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Employee Offboarding

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Reporting on Attrition

As employees leave your company, it’s critical to keep clear records of not only who is leaving, but when and for what reasons. Having good data integrity (i.e. clean, reliable data) early on will prove valuable in the future as you monitor your company’s attrition trends.

Tracking Termination Data

If your company has an HRIS, it should be capable of tracking basic termination information, such as employee name, date of termination and reason. You’ll want to set up termination reasons in your HRIS, and most companies start with simple termination reasons, such as “Voluntary” and “Involuntary.” As your company grows, however, and experiences more attrition, you’ll find that more detailed reasons will allow you to better understand the reasons why employees are leaving, track these trends over time, and hopefully address them. Employee exit surveys can also help provide more context on an employee’s decision to leave the company. Here are some common termination reasons:
Voluntary
Better Opportunity
Career Change
Relocation
Better Compensation
Retirement
Personal Reasons
Job Abandonment
Involuntary
Poor Performance
Reduction in Force
Layoff
Position Elimination
Misconduct
Job Abandonment
End of Project or Contract
You may also want to include an option to mark voluntary terminations as “Regretted” and “Non-Regretted.” A “Voluntary - Regretted” termination is a termination where the company regrets that employee’s departure and would have benefited from that employee staying. A “Voluntary - Non-Regretted” termination is a termination where the company accepts that employee’s departure and does not believe it would have benefitted from their staying — this may be the case in the event that an employee quits but was experiencing performance issues. This distinction can help you focus on metrics for truly regretted attrition.

Reporting on Attrition

While you can report out on the sheer number of terminations your company is experiencing, the industry best practice is to report on terminations by calculating an attrition rate (sometimes referred to as a turnover rate). Attrition rate is a helpful metric to share with your executive team, coupled with high-level data from your employee exit surveys to paint a holistic picture on employee attrition.
The monthly attrition rate is determined by the number of terminations in a month, divided by the average number of employees for that month, multiplied by 100 (to get a percentage). To calculate the average monthly headcount, take the month’s beginning headcount + ending headcount, and divide it by 2.
Monthly Attrition Rate = (# of terminations/avg. # of employees) x 100
The Monthly attrition rate can then be used to calculate an annual attrition rate, or year-to-date attrition rate, by adding the monthly attrition rates together.
Annual Attrition Rate = January Attrition Rate + February Attrition Rate + March Attrition Rate...
You can calculate attrition rate as an overall attrition rate (involuntary and voluntary terminations), or you can calculate a voluntary attrition rate by just including the voluntary terminations in your calculations (and you can slice this even further to calculate attrition rates for voluntary, regretted attrition, or attrition rates for specific departments or business units). Consider sharing these attrition rates with your executive team, calling attention to any concerning trends. All companies will experience some attrition, and you should be aware of your industry’s standard attrition rates. You can use data from employee exit surveys to add context to the data, and propose actionable insights for addressing attrition.
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Frequently Asked Questions
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Separation Agreements and Releases
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