What Is the Relationship between Attrition and Retention?

Geri Terzo

By definition, attrition and retention are opposite phenomenons driven by corporations and other employers. The former is the evolution of losing employees, usually to retirement, while the latter focuses on maintaining the current staff for as long as possible. Sometimes, an employer may want to usher in a new generation of employees, so retention efforts might be eased so that attrition takes place. Employers invest capital in retention programs, but just as much of an investment could be made in designing early retirement packages so that there is room for new hires.

Magazine publishers use attrition rates as a measure of success or failure.
Magazine publishers use attrition rates as a measure of success or failure.

Attrition and retention serve different purposes, but the crux of the relationship is that one makes way for the other. In order to promote retention within an organization, an employer might invest to create a corporate culture where employees grow and excel so that these individuals find little reason to leave. These efforts might begin with an informative and transparent orientation for new hires in an attempt to make employees feel knowledgeable about a corporation from day one. Mentoring programs might be available or something less formal where young workers have someone to emulate within an organization. These efforts are all attempts to create retention.

Customers may leave a business because the employees seem ill informed or disinterested.
Customers may leave a business because the employees seem ill informed or disinterested.

Once employees have been retained at an organization for a number of years, these individuals become eligible for retirement. Many times, these employees have been with an employer for decades and have developed skills along the way that warrant generous salary and benefit packages. An employer might decide that it would improve the financial picture at a firm if these veterans would retire early and be replaced with younger, less-experienced employees who command lower salaries. As a result, the older group of employees might be offered a premature retirement package as an incentive to leave, which allows the company to introduce a new generation of workers. Attrition and retention are working together as one group is pushed out through attrition just as the company attempts to retain another.

Employers should create an environment where employees can grow and exel.
Employers should create an environment where employees can grow and exel.

In the health care industry, attrition and retention are similarly intertwined. In an attempt to generate new business, health care providers are often focusing efforts on adding new patients. If the facility is not mindful, there might also be a wave of attrition that takes place from existing patients who may feel neglected. Ideally, a medical facility could bypass the push-and-pull dynamic between attrition and retention by attracting new business without diminishing the current roster of patients.

Ensuring that employees are properly trained may help reduce attrition.
Ensuring that employees are properly trained may help reduce attrition.
Offering bonuses may help curb high attrition in the telemarketing industry.
Offering bonuses may help curb high attrition in the telemarketing industry.
Taking the time to hire the right person initially is a great employee retention practice.
Taking the time to hire the right person initially is a great employee retention practice.

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