Determining hiring needs and planning for future growth is a challenge that every company will face. To make the best hiring decisions, you need to understand your company's current attrition rate.
The most common problem that businesses experience when trying to predict the resources they need is underestimating their attrition rate. Even if you think it's impossible, your employees will eventually leave.
There's no way for you to prevent every employee from leaving, but it's important that you understand how much turnover your company has, so you can accurately plan for the future.
Let's say you work for a company with 30 employees. It's growing by 10 percent a year, so you know you'll need three more people in 12 months just to keep up with growth. But what about turnover?
Turnover is expensive, and it can impact your business in many ways. For example, if two employees decide to quit in the next year, you'll have five new positions to fill instead of three. If you had 20 percent turnover instead of 10 percent, you'd need six new hires instead of three.
You should always account for attrition when calculating hiring needs.
Here are seven reasons you should measure hiring needs against attrition rate.
- It will help you understand how aggressive you need to be in recruiting new hires.
- It will help you understand how aggressive you need to be in retaining the employees you have.
- It will help you avoid overstaffing. Overstaffing can lead to unnecessary labor costs for your company and additional training expenses for new hires. Measuring hiring needs against attrition helps ensure that you have an adequate number of employees based on current business demands.
- It will help identify where your organization has problems attracting or retaining talent for specific roles or locations. Suppose you know that your software engineers have an attrition rate that is twice as high as normal. In that case, you can divert more resources toward efforts that address that issue, such as better compensation, flexible work options, or improved benefits packages.
- It will help you understand turnover trends. Digging deeper into your data can help you understand why employees leave — is it because they are demotivated by their managers, or do they not see a career path ahead of them?
- It will help identify where targeted recruitment efforts might be appropriate to help close the gap between hiring needs and attrition rates for specific job types or locations.
- It allows you to create a forecast based on real data. If you connect your HRIS or HRMS system to eqtble, you will have all the information required to accurately forecast future hiring needs.
There’s wisdom in the old saying, “you can’t manage what you don’t measure.” And there’s certainly truth to it when it comes to hiring.
If you want to land top talent in today's competitive market, you need a solid hiring strategy in place. Otherwise, how can you be sure your efforts will be successful?
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