New data suggests that skills-based hiring works extremely well for the metrics high-volume recruiters care about. How well? Let’s find out by zooming in on one important metric: attrition!
Attrition is a tricky KPI because there are so many factors that can affect it. In this post, we will look at average attrition rates from all angles, and then unveil some fresh research for high-volume hiring teams.
Understanding Average Attrition Rates
Attrition can be defined as “the rate at which employees leave an organization divided by the average number of employees at the organization over a given period of time.” The period of time will vary depending on who is measuring it, and this is just one factor that affects attrition rates.
When LinkedIn did a study of attrition rates by industry, they used a twelve-month window and found that industries like accommodation or retail had higher attrition than the overall industry global average attrition rate of 10.6% in 2022. They also found that while attrition rates were different between industries, they also varied greatly by department and even company size. For example, it was found that HR departments had the highest attrition rates at 14.6%, and SMBs (12%) had higher attrition than enterprises (9.9%). Clearly, there’s a lot to consider when it comes to measuring attrition and anyone considering benchmarking their company’s attrition rate with an industry average should be looking at relative company size, industry, and even department.
New Data on Attrition Rates in Contact Centers
For contact centers attrition can be dramatic next to the total industry average, putting more pressure on the volume of hires needed. In a call center, attrition rates can be as high as 38%! That being said, should all contact centers hold themselves to this standard?
New data suggests that even within the call center industry, from a geographical perspective alone, attrition rates vary greatly between countries. The research revealed that average call center attrition rates ranged from as low as 5% in Austria to as high as 28% in India.
It was also found that there was an observable difference in attrition rates by location and in companies that hired using in-house teams versus those that outsourced this function. For example, in Sweden, the attrition rate for an in-house team was 8%, but for those who outsourced hiring in Sweden the attrition rate was 19% - That’s a 16% difference for the same type of industry in the same location!
Average Attrition Rates in Customer Service and Sales
Our recent Skills-Based Hiring Performance Report looked at a pool of over 5000 candidates who took a soft skill assessment as part of their interview process. Of those who were hired, the pool was analyzed by role, by top and bottom performers, and by those who attrited after four months. These were the results:
- For every 1 top-skilled customer service employee hired, 27.3 bottom-skilled employees attrited.
- For every 1 top-skilled sales employee hired, 9.8 of the bottom-skilled employees attrited.
Overall this means that highly skilled candidates and employees will attrit less. In turn, the ability to identify skilled performers during the hiring process allows organizations to curb their attrition rates before they happen, especially for high-volume hiring scenarios.
Takeaways on Average Attrition Rates
There are so many factors that can affect attrition from industry to company size, location, hiring function, and more. With so many variables, apples-to-apples comparisons can be difficult to make. Use the average attrition rates here cautiously, aiming to get as close to your organization’s circumstances as possible. Benchmark your average attrition rate over a given period. Use that as your baseline, and then refer to the averages featured here aspirationally. And if you’re in a high-volume role, consider screening for skilled candidates in the hiring process to reduce attrition rates down the road.
Image Credits
Feature Image: Unsplash/International Student Navigator Australia
Image 1: Property of HiringBranch. Not to be reproduced without permission.
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