Employee Engagement Internal Talent Marketplace Talent Management

Guide on How to Reduce Attrition Rate of Employees

Table of Contents

1) Introduction

2) Why is it important to have a lower employee attrition rate?

3) 6 Ways To The Lower Attrition Rate

4) Conclusion


Employee attrition or turnover can dramatically influence a company’s financial state and the morale of the working environment. It is one of the major challenges faced by HRs and top management. Maintaining a lower attrition rate is more complex than employee recruitment. The complexity of the corporate landscape today has revolutionized the recruitment industry.

Why is it important to have a lower employee attrition rate?

The top management has finally realized the value of its labor force, thereby, is working on how to reduce attrition rate of employees and taking measures to ensure the utmost fulfillment of its employees. The job roles are being tailored as per the abilities and skills of the employees.

Employees are even asked to or assigned projects that pertain to their strengths and what they best at. Companies are reengineering and reconstructing their work culture at lighting speed, and thereby they need an intelligent way to move large right people into the right role. Hence, companies need to work on internal talent mobility and thereby find internal experts who are often hidden within the organization. So the concept of internal talent management has been buzzing the HR industry lately.

6 Ways To The Lower Attrition Rate

Employee attrition may be defined as the reduction of staff when employees leave the organizations and replacement is not done. It heavily affects the workforce and ultimately poses a serious threat to overall productivity, that is why lower attrition is a must. There is a formula for Employee Attrition Rate

ways to Reduce Attrition Rate of Employees
Ways to Reduce Attrition Rate of Employees

Attrition Rate= ( No. of employees resigned/No. of employees at the start of the month + No. of employees joined-No. of employees resigned)*100

The retention of the employee can be embedded in the internal marketplace and similar other initiatives that can help the organization restore its top talents, so as to improve work proficiency and financial figures. Let us have a detailed discussion on how to reduce attrition rate of employees

1. Generous Compensation

“How to reduce attrition rate of employees?” you ask? The answer is-Generous Compensation. It might be an impractical proposition to reward your employees with a handsome paycheck every month. It takes a serious toll on the financial position of the organization. However, it is also not acceptable to drop below industry standards. Try being at par with your competitors while deciding on the payroll of the employees. Research has stated that if the compensation plan of a company is even 10% lower than the competitors, the employee is likely to voluntarily resign after some time. Generous compensation is a great way of employee engagement.

2. Professional Recruitment Strategy

It is indispensable to choose the right person for the right job role. Through a systematic ascertainment of people’s skills and strengths, people’s decisions gain a strategic agenda. The skill or competency mapping allows you to take stock of skill inventories lying with the organization. This is especially important both from the perspective of the company as well as employees because the right person is deployed in the right position, and employees’ productivity is increased. This proves to be an efficient way to keep the employees engaged and reduce the attrition rate.

3. Engaging In The Professional Development Of The Employees

Engaging in the professional development of the employees is your answer to how to reduce attrition rate. When a company gets to know who its high potential is, it becomes easier to invest in their professional development and thereby channelize their talent in the right direction, so use the same for the benefit of the company. Investment in the skill development of employees can further the goals of the organization as well because the employees learning new skill set will consequently help in increasing the profitability and efficiency of the company. It can be an excellent way of employee engagement, and internal talent marketplace can be a feasible option to achieve the same.

4. Training Your Middle Managers

In most of the cases, people tend to leave their bosses, not their jobs. 92% of the employees leave their jobs due to unapologetic and rude bosses. The middle managers and supervisors should be trained properly so that they can handle the employees and subordinates with utmost empathy and generosity. When the subordinates feel that they are being valued, the level of employee engagement rises, which in turn, leads to reduced attrition rates.

5. Retaining Top Talents

This can be a tricky one as the stakes are high here. Despite changes in the global economy, attrition remains a major concern of organizations. Retaining top talent is important to leadership and growth in the overall industry. Organizations that fail to retain their top talents are at the risk of losing out to competitors. The focus is now charting employee retention programs by alluring them with incentives, bonuses, and other perquisites and strategies to recruit, develop, retain, and engage quality people. Employee growth in a career has to be taken care of, while succession planning is being performed. Those who are on the radar need to be kept in the loop so that they know their performance is being appreciated or rewarded. In short, the company should mark their asset employees and work towards their job enrichment, so that the attrition rate is lowered.

6. Engaging Employee

The art of employee retention requires the superiors to curate a work culture, which can get employees excited for even the most mundane of activities. It is impossible to reduce turnover rates in the absence of employee engagement. It is advisable to conduct periodic feedback sessions to evaluate the state of your employee. A disengaged employee can be seen as a rotten apple. The remaining employees are likely to be affected by the negativity, which in turn will shoot up the attrition rate. Hence, this should be taken care of.


We are pretty sure that you got your answers to the question- How to reduce attrition rate of employees. Attrition is a costly affair and definitely hits the company’s pocket. However, the ulterior cost of attrition depends on how much it is going to cost the company to train the new joiners, so as to take up the responsibility of the vacated post due to resignation or retirement. Attrition of revenue-driving employees is one of the greatest blows a company has to suffer. Hence, it is important to create an engaging workspace for the employees to reduce the attrition rate and increase productivity.

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