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June 29, 2023

3 Reasons Employee Attrition Isn’t Always a Bad Thing

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If you’re like most HR professionals, you probably can’t help but cringe when you hear the words “employee attrition.” 

With employee retention a perpetual challenge for growing companies, attrition is the dreaded leaky faucet of the hiring world — slowly dripping valuable talent and leaving seemingly endless repairs in its wake.

But employee attrition is part of the game. 

Today the average employee tenure is just four years. That’s a fact, so why fight it?

Non-regrettable attrition can save you and your company time, money, and energy by avoiding the legal and financial repercussions of a hire-and-fire scenario.

So how can you make space for the right kind of attrition, while still maintaining company culture and productivity?

Let’s dive into the unexpected "bright side" of employee attrition.

What the heck is intentional attrition?

Employee attrition is a broad term used to describe the natural departure of an employee from a company for a number of reasons, such as resignation, relocation, or retirement. Unlike employee turnover, workers lost to voluntary attrition are not always actively replaced.

But what is intentional attrition? And can it really transform your hiring strategy?

Unlike regular attrition where you concede to naturally losing employees over time, intentional attrition is deliberate and backed by a clear plan for a set percentage of attrition in certain roles and over certain time periods.

You essentially build attrition into your talent strategy, rather than passively letting it happen.

Here’s how CEO and founder of global employer branding agency Ph.Creative Bryan Adams describes it in his recent article for Harvard Business Review, Companies Need to Normalize Healthy Turnover:

“Schools make great use of this strategy. From the moment eager students apply, they know their tenure will be finite; it’s supposed to be that way. While some students might stay longer than others or even get long-term campus appointments, most leave after a few years. It’s seen in a positive light because it means the school has done its job.”

When students apply to college, they know they’ll only be there for four years or so. Graduating and moving on to greener pastures is proof that the system is working.

If you’re like most business leaders, you probably have a firm focus on improving employee engagement and employee retention. But without a more nuanced understanding of positive vs. negative attrition, many companies simply aren't developing a strong strategy for either.

What if we started acknowledging the fact that most employees don’t stick around forever?

From loyal alumni employees who left but are proud to sing your praises, to boomerang employees who rejoin the team years later with added employee experience and insight — intentional attrition, or voluntary turnover, can benefit your entire work environment.

Here are two common ways to execute an intentional attrition strategy.

The ‘up-and-out’ process

In his article for HBR, Adams profiles global consulting firm McKinsey as a prime example of intentional attrition in action, using an “up-and-out” system.

Here’s how it works:

“Employees know at the beginning of their time with McKinsey that even if they perform at their highest capacity, they might not progress. With only so many senior positions available, some McKinsey team members will be encouraged to leave,” Adams explains.

Instead of framing every employee who leaves as a bad thing, it’s seen as a mutually beneficial system.

Employees get experience working for a highly reputable global brand. McKinsey can fill a larger number of entry-level roles, without the obligation to promote employees to a limited number of senior positions. Both benefit from the kind of transparency that fuels great work and lays the foundation for future opportunities.

And with a new MIT study finding that the majority of entry-level employees can only climb the ladder by switching companies, this exit ramp strategy could be a futureproof strategy that works for everyone.

The ‘up-or-out’ process

While McKinsey’s up-and-out process encourages employees to move up or move on, other organizations employ an up-or-out approach that requires workers to leave if they don't achieve a certain rank in their career development a certain amount of time.

The US military is famous for this approach. If certain service members are passed over for promotion twice, they are forced to leave the military. This incentivizes military members to work hard and climb the ranks toward senior positions. Those who don’t have the performance track record to remain are expected to drop from their workforce. 

This approach can also commonly be found for employees on the university tenure track, or law firm progression from associate to partner.

While it may feel a bit harsh, most companies could stand to learn a thing or two from the up-or-out practices of these dog-eat-dog industries, especially as a lack of professional growth drives some types of employee turnover across industries.

By building promotional necessities into your HR model, you can transform accidental turnover into intentional attrition.

Whether you opt for an up-and-out or up-or-out process, make sure your intentional attrition process aligns with your brand and its position in the talent market. 

For most growing organizations, a positive, transparent, ‘talent incubator’ or  'career accelerator' culture is a great way to avoid the eat-or-be-eaten environment that may be expected from a large world-renowned or multinational employer.

Why some employee turnover is actually a good thing

Transitioning from a “big happy family” culture to a career stepping-stone mindset isn’t easy. 

Like any major organizational change, it takes work. But by creating a culture that recognizes that employee tenure is limited, you can transform your employer brand for the better. 

Here’s why intentional attrition is worth the effort.

1. It forces you to establish clear expectations from the outset

87% of workers surveyed by Slack said they hoped their next employer would be more transparent. At the end of the day, mixed messages about future opportunities only harms the relationship between employer and employee.

With a mutual understanding that every hire isn’t forever, you can establish clear expectations around employee performance and progression and inspire new hires to do their best work during their time with your company — however long or brief that may be.

Here’s how you can get started:

  • Identify which roles are the best fit for shorter term apprenticeship-style positions.
  • Survey or interview alumni employees on what they like best about working for your company, what they gained from it, and how the knowledge served them in future roles.
  • Update your employer branding to reflect those employee-selected highlights so you can set clear expectations for future employees.

Start the discussion as early as your interview, or even your career page or job posting, so applicants know what they’re getting into — an ace opportunity in exchange for a few years of exceptional performance.

If an employee consistently goes above and beyond and wants to stick around — amazing! You can work together to chart a path to advancement.

But if an employee is getting antsy and feels ready to move on, that commitment to transparency leaves no room for secrets or bad blood — only honesty.

2. It helps you discover new ways to offer mobility

When you build intentional attrition into your company policy, you discover new ways to nurture the talent you have. And in today’s market, that means intentionally creating employee mobility opportunities.

So how can you level up your mobility opportunities while also giving employees durable skills they can take with them anywhere?

Invest time and resources in becoming a supportive 'stepping stone' environment via:

  • Skills development opportunities
  • Quality networking opportunities
  • Clearly defined mentorship programs
  • Promoting from within

Devote time and attention to your mentorship and training programs to ensure employees are always growing — even if they’re growing away from you. This way, departing employees aren’t just faded memories, they’re loyal alumni who can help strengthen your employer brand even after they’ve departed the company.

3. It shows you the real rhythm of your talent flow

Fear of involuntary turnover can do major damage to your business with almost 25% of employers reporting that they’re retaining more low-performers now than years past.

Instead of operating within the blanket mentality of "all attrition is bad", spend some time understanding which ebbs and flows of your annual turnover rate make the most sense for your business.

While there’s no one-size-fits-all metric, you can get started by:

  • Tracking internal mobility
  • Comparing mobility stats to regrettable losses
  • Taking a long hard look at your talent ladder
  • Dedicating more resources to skills development

At the end of the day, retaining the right talent for your business is essential, and intentional attrition — supported by intentional attention to your hiring data — can transform your company if given the chance.

Build a talent strategy you can grow on with Breezy

Don’t be afraid to say goodbye. Knowing when to let go can help ensure that the right people stay, while the rest go on to succeed in other roles and companies. 

Ready to help your people come and go on great terms? Breezy’s simple, visual applicant tracking system can help you streamline your recruitment process and keep your best candidates close. See for yourself with a free 14-day trial.