How to Use Data to Better Understand Attrition and Retention

One of primary challenges HR leaders and employers face in the workplace is developing strategies to minimize employee turnover. This is because retaining employees involves understanding their diverse needs and motivations, addressing issues that affect job satisfaction, and implementing effective employee retention programs. 

However, big data is considered an effective tool in tackling these challenges, as it provides insights into trends, reasons for turnover, and employee satisfaction levels.

In this article, we will demonstrate how using attrition and retention data can empower your business to make informed decisions that enhance employee satisfaction and in turn, reduce turnover rates.

Understanding Employee Retention

Employees are every company’s greatest asset. This is because they bring in skills, creativity and innovation which are critical for the company’s success. Smart employers who know this spend time and resources looking for the best talents who can contribute to the growth and competitive advantage of the business. 

The difficult thing is all this investment can go to waste if HR leaders and managers don’t develop retention practices to prevent their talents from leaving. 

You understand the costs associated with hiring; now consider the significant expenses incurred when losing employees. When this happens, businesses take a financial hit, face disruptions in productivity and potentially lose their best talents to their competitors when they miss out on adopting employee retention strategies. 

Attrition vs Retention

To understand how attrition and retention is measured, you must know the similarities and differences of each. Here we explain each concept.

What is attrition?

Attrition, also known as employee turnover or labor turnover is a measure of the percentage of staff who leave the company during a particular period. 

Read next: What is Attrition Rate? Tools and Tips to Calculate, Analyze and Improve Your Team’s Retention

Turnover is classified into two different types such as voluntary turnover or involuntary turnover.

Voluntary turnover occurs when an employee decides to quit due to: 

  • Pay benefits: Staff who feel they are not paid fairly or that some other company will pay them higher, will lead to them being dissatisfied. This eventually causes them to leave. According to a study conducted by the Pew Research Center, 63% of the respondents mentioned low pay as a primary reason for leaving their job. 
  • Role mismanagement: This can happen when the employee perceives their job scope to be ambiguous or disconnected.
  • Workload: 46% of HR leaders claim that employee burnout could be responsible for as much as half of all workforce turnover. If an employee is overloaded with work, it could cause high stress levels, decreased productivity, and potential resignation. Contrastingly, if employees have limited tasks, they feel disengaged from the workplace and would seek opportunities elsewhere.
  • Manager’s attitude: Employees might choose to leave if they struggle with their manager’s ineffective leadership or mismanagement style.

Relevant reading: The Manager’s Guide to Asking for Feedback

Involuntary turnover happens when employees leave a company due to reasons beyond their control. This includes layoffs, restructuring, or termination for performance or misconduct reasons initiated by the employer.

What is retention?

Retention is the ability of a company to keep its staff. In other words, a direct measure of how long each employee stays. 

A high retention rate indicates employees are satisfied with their jobs and are less likely to leave the company. A low retention rate on the other hand, indicates that employees are unhappy with their jobs and are more likely to leave the company. 

Many factors contribute to employee retention, such as offering competitive salaries and benefits, opportunities for career growth, appreciation for employees’ hard work. Encouraging open communication and creating a positive workplace culture are additional ways to improve retention. 

Importance of Measuring Attrition and Retention

retention vs attrition


Identify problem areas and develop targeted solutions

When companies have access to attrition data (that is they can pinpoint departments and roles with high turnover rates), it becomes easier for them to develop targeted solutions to address these challenges and improve retention. 

Inform employee retention strategies

With a better understanding of attrition rates, employers and HR leaders can plan their retention strategies accordingly. They can tailor strategies such as mentorship programs, adjustments in compensation packages, career development opportunities, or work-life balance initiatives to address specific needs and concerns of their employees.

Improve productivity and employee satisfaction

Strategies to counter attrition can in turn help increase efficiency and employee satisfaction. Companies benefit from high productivity and satisfaction levels, and enhances overall team stability and performance. 

Helps manage cost of recruitment

High turnover can be expensive. Replacing a full-time employee can cost anywhere between half to twice the employee’s annual salary. Measuring attrition rates helps organizations understand how much they’re spending on replacing employees and where they can save money by improving retention strategies.

Learn more: The Cost of Recruitment: HR’s Guide to Creating, Tracking and Implementing a Salary Budget


Ensure knowledge transfer and innovation

As experienced employees leave, they take their knowledge and expertise with them. For example, a sales manager leaving could result in loss of client relationships and sales strategies that were key to the team’s success. An increase in retention rates ensures that these knowledge and skills are passed down effectively, supporting business growth and longevity. 

Boost employee morale

Employee morale is closely linked to employee productivity. Companies can boost employee motivation by implementing effective retention strategies, such as recognition programs that contribute to job satisfaction, and overall happiness at work. 

Develop targeted retention strategies

Measuring retention rates provides insights into the effectiveness of existing efforts and enables organizations to tailor retention initiatives to better meet the needs of their workforce.

Track effectiveness of HR initiatives and company culture

Retention metrics show how healthy the organization is and how strong its culture is. By tracking retention rates over time, companies can see how HR policies, programs, and culture initiatives affect employee engagement and loyalty. This helps HR leaders improve workplace dynamics and keep employees happy.

Using Data to Understand Attrition and Retention

As you know by now, measuring and understanding attrition and retention is crucial for business success. Here’s how you can use data to get deeper insights. 

1. Unveil underlying reasons

Before you go into addressing your attrition and retention rates, you must first discover why employees leave, how long they stay, and what can be done to keep them longer. 

Your data collection process should involve gathering information from employee records, performance reviews, and exit interviews, and further analyzing it using different statistical methods. 

The next thing is to examine this data over time to identify regular patterns in employee attrition and retention. For instance, you might discover that more employees leave after yearly reviews. Perform a deep analysis to uncover the reasons behind employee turnover. 

Perform employee feedback analysis

Performing employee feedback analysis involves looking at employee satisfaction surveys or exit interviews to find common complaints and issues. This way, organizations can focus on fixing the most important problems to keep employees happy and reduce turnover.

Learn more: 20 Strategic Employee Engagement Survey Questions

2. Create targeted solutions and strategies

Segment data for targeted approach

Different groups of employees have different needs and challenges. By segmenting data, you can better understand these specific needs and tailor your strategies accordingly. This is done by grouping employees in various categories such as departments, job role, performance level and demographics. 

Implement proactive strategies through predictive analytics

Another method used in understanding attrition and retention involves using AI tools and statistical modeling to predict which employees might leave based on their past behavior. 

With these insights, you can create proactive strategies such as mentorship, career development plans, and better benefits specifically for identified employees with higher risk of leaving. This helps to prevent turnover and retain valuable talent within the organization.

3. Measure impact and ROI

Benchmark data against industry standards

Compare your company’s employee attrition and retention rates with those of similar companies in your industry. This benchmarking process helps you see if your company is doing well or needs to improve.

Evaluate retention programs 

By conducting a regular review and assessment of your employee attrition and retention programs, you can discover if the initiative is effective. Use metrics like employee satisfaction, engagement scores, and turnover rates to determine which programs are working and which need adjustment. 

Quantify financial impact of attrition

Companies that calculate the financial gains or losses from their retention efforts can allocate resources better and make smart decisions to improve overall company performance.

4. Make data driven decisions

Take the guesswork out of managing attrition and retention

Use data analytics to guide decision-making and develop strategic retention plans. This ensures strategies are based on evidence and are aligned with overall business goals.

Constantly monitor and track effectiveness of strategies

Monitoring and tracking the effectiveness of your strategies involves these two things: 

  • Implementing systems for ongoing monitoring of key metrics such as turnover rates, employee engagement levels, and the effectiveness of retention programs.
  • Conducting regular reviews and analyses of the attrition and retention data to identify trends and adjusting strategies along the way. 

10 Metrics to Include When Measuring Attrition and Retention

attrition vs retention

To effectively measure attrition and retention, companies should track certain key metrics. Here are 10 important metrics to consider:

Attrition metrics

Overall attrition rate

This is the percentage of employees who leave a company over a certain period. Attrition rate is calculated by dividing the number of employees who left within a specific timeframe by the average number of employees during the same timeframe.

Attrition rate % = (No of employees who left the organization/Total number of employees) × 100

Calculating and measuring attrition and retention rates helps organizations measure the health of their workforce. A high attrition rate indicates potential issues such as ineffective hiring processes, low employee satisfaction, or a toxic work environment. 

Time to hire

This measures the amount of time taken to fill a vacant position from the moment it is advertised until the candidate accepts the job offer. It is also an important metric used to determine the success of your recruiting process. 

For example, a long time to hire can indicate underlying issues like inefficiencies in the process, trouble attracting qualified candidates, decision-making delays, or poor coordination between hiring managers and recruiters. Fixing these issues can speed up hiring, lower recruitment costs, and improve the recruitment process.

Cost per hire

The cost that goes into hiring a new employee such as advertising, recruitment agency fees, and onboarding expenses is critical. It helps provide an understanding of the financial investment required to bring new talent into the organization.

Turnover by department/team

This metric calculates the attrition rate for specific departments and teams within the organization. It highlights areas experiencing high turnover, allowing HR teams to make insightful decisions.

Retention metrics

Overall retention rate

If a company’s turnover rate shows the people leaving a company, then the retention rate measures the opposite. The retention rate is a determination of how well a company can retain its employees. It is calculated by dividing the total number of employees deciding to stay in the company across a certain period with the number of employees deciding to stay within the company in the same period.

Retention rate % = (Number of employees at the end of a set time period / the number of employees at the start of a set time period) x 100

Length of service 

This retention metric calculates the average duration for which an employee holds their position. Longer lengths of service indicate higher retention rates and greater employee satisfaction.

Employee engagement scores

High engagement scores are often correlated with lower turnover rates. These scores help HR understand how employees feel about their roles and the company, guiding improvements in workplace culture and practices.

Promotion rate

This metric determines the percentage of employees who receive promotions over a specific period, indicating career growth opportunities within the organization.

Read next: The Employee Promotion Guide: Policies, Processes, and Best Practices

Additional considerations

Quality of hire

Another important attrition and retention metric to consider is quality of hire. With this metric, you can assess the performance and success of new hires after they have joined the company. 

Absenteeism rate

Absence rate or absenteeism is an attrition vs retention metric that calculates the total number of days an employee is absent from work. It is calculated by dividing work days missed by total scheduled days. Then the number obtained is multiplied with 100. It is important to note that the number of authorized days off work is not considered when calculating absence rate. 

Build a Thriving Workforce with Omni

Keeping your finger on the pulse of your workforce helps mitigate attrition rate risks such as dips in employee engagement or performance skill gaps. 

Omni centralized and tracks a wide range of employee data, from attendance records to attrition rate, automatically within our platform. Real-time graphs and easily exported reports simplifies employee analytics and cuts down on calculation times and errors, arming you with the data you need to understand the trends within your organization. 

Employee attrition and retention rate can be easily accessed for monthly, quarterly, annually, or any custom range of dates within minutes, making it easier for HR leaders and CEOs to keep track of their churn rate and address pain points at the first sign of trouble, helping to reduce your attrition rate and improve employee retention.

To learn more about how Omni can help you unlock your business’ potential, schedule a demo with our team today.

Get started today!

Get a 14-day free trial and see how Omni can work for your business.