Attrition is a function of Employee Engagement such that for an increase in employee engagement there will be a corresponding reduction in employee turnover.

While 66% of actively engaged employees reported that they had no plans to leave their company, only3% of them were actively looking, compared to 12% and 31% respectively, for actively and passively disengaged employees [1].

Drawing a comparison between the extreme levels of engagement showed that actively engaged employees were [2]:

  • 87% less likely to leave their companies than their disengaged counterparts
  • 4 times less likely to leave than the passively engaged

Employee Engagement can be further sub-categorised under Emotional and Transactional [3] where Emotional engagement is four times more valuable than Transactional in driving employee effort. While competitive compensation and benefits packages are crucial to attracting and retaining skills [4], emotionally engaged employees deliver an increase in performance of up to 20% compared to 9% for the transactional engaged employee [5].

Superimposed on this is that the attrition rates are dependent on the length of service of the employee. Within the Financial Sector, the Millennial generation has a rate of attrition at 22% whilst for Gen X it is 23% while for the rest of the UK the same generations are 12%  and 15% respectively) [6].

Attrition has significant hidden costs such as loss of IP and a direct increase in operational costs. Whilst increasing the employee engagement by 1% will improve employee retention by 0.5%, which has a direct bearing on reducing the expenditure dedicated to employees by 5%. The bottom line effect is consquently improved by 0.7% of total revenues

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Engagment Attrition
Financial Benefits Attrition


Potential Financial Benefits from Reduced Attrition on operational cost and loss of IP resulting from Improved Employee Engagement

[1]        Towers Perrin European Talent Survey, 2004
[2]        Corporate Leadership Council
[3]        CIPD, 2012
[4]        Institute of Fiscal Studies, 2005
[5]        Corporate Executive Board, 2004
[6]        Director of Finance Online, 2010


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