7 ways employee attrition rate affects business advancement

Further, according to research, 50% of candidates say they wouldn’t work for a company with a bad reputation even if they get paid higher. Given that, it is extremely important for your organization to have a good reputation and your employee retention rate is a key performance indicator of your company’s stature. Now, think of what happens to your company’s reputation if you have a high attrition rate? Also, think of what your former employees will say about your company to others? A high attrition rate indicates that your employees have a lot of issues with your organization. Consequently, they’ll only spread a bad word about your company.

This will pose a huge risk to your company’s reputation and make it difficult for you to find the right replacements. Moreover, if you have a high turnover rate, you are also more likely to suffer from negative employee reviews. Today, candidates check the reviews of a company before applying for a job position. According to research, 61% of Glassdoor users seek company reviews and ratings before making a decision to apply for a job. Again, high employee attrition can damage your company’s reputation and make it challenging for you to find the right replacements.

2. Regular disruptions in workflow management

This is one of the biggest disadvantages of high employee attrition. It slows down your company’s progress. Why does it happen? Research has shown that it takes around eight months for a new hire to become fully productive. Needless to say, new employees will require their own share of learning and training to develop competencies that will add to the organization’s progress.

Having said that, when there is constant rehiring in the organization due to high attrition, the workflow management will suffer. Consequently, you will concede the advantage to your competitors and have a hard time trying to match strides with them. In times of such massive competition, that is something you would not want to do for sure. Hence, it is wise to put your best efforts to improve employee retention in your company.

3. Lowers employee morale

With high levels of morale, organizations can achieve new milestones and capture new markets. However, organizations begin to doom when employees lose morale and begin to disengage. Having said that as a leader, you ought to look after your employees' morale and motivation at all times.

However, when employees see their colleagues leaving the organization, it does take a toll on their morale. The more frequent the resignations from the company the greater the slump in the overall organizational morale. To explain, it leaves other employees questioning the reasons for a large number of resignations. Your employees may not express these insecurities directly but it will affect them for sure.

In fact, some might even think that there are better opportunities available outside or your company has some serious problem that is not yet in their grasp. Eventually, their morale will begin to drop and large rates of disengagement will begging to creep in. The prolongation of the same will hurt the organization in the long run and will inflict heavy losses.

5. Deteriorates customer experiences

One of the most obvious disadvantages of a high attrition rate is that it deteriorates product or service quality. A new hire takes around eight months to match the level of the experienced employee who left. Given that, your product or service quality certainly gets impacted. When your customers don’t get the quality they expect from you, they lose their trust in your products and services.

Consequently, they develop an inclination towards your competitors. As you already know, losing your customers is one of the worst things that can happen to your business. Having said that, high attrition rates can take your business downwards on the graph of growth by leading to the loss of your precious customers. If you aspire to grow your customer base, it is crucial that you put your efforts to keep your employees with you in the long run.

6. Hinders the potential of HR managers

When your organization suffers from a high attrition rate, HR managers have to focus more on hiring which prevents them from focusing on your existing employees. Consequently, they feel ignored. Loss of employee engagement, lack of employee growth and development, and loss of employee happiness are some obvious effects of such happening. This further contributes to even higher attrition rates. Having said that, high turnover can stimulate even more turnover by making your existing employees feel ignored.

7. Increases instances of employee burnout

When a team member is absent even for a day, others suffer. They have to shoulder his work responsibilities as well. Such things are okay in the short term but they become catastrophic in the long run. High attrition rates push your existing employees to shoulder the work responsibilities of those who have left until a suitable replacement is found or the new hire becomes capable enough to shoulder his responsibilities properly.

Overworked employees experience high-stress levels and become prone to burnout. Employee burnout has immense negative effects on an organization. When your employees experience burnout, they experience physical, emotional, and mental exhaustion. This exhaustion makes them physically sick, causes anxiety, and sends them on the path of disengagement. Consequently, their productivity drops and your company suffers. This is another way in which high attrition rates take a toll on your organization.

As discussed throughout, high employee turnover or attrition rates can have significant negative impacts on your business’s growth. Given that, it is crucial for you to make reducing employee attrition one of the most important goals of your organization. As you reduce employee attrition rates, you’ll naturally give a boost to your business’s growth. Wish you All the very best.

- Kiara miller