Voluntary employee attrition. Descriptive and predictive analysis

Abstract

Abstract Voluntary attrition represents the percent of employees voluntarily leaving a company. Counteracting this phenomenon with hiring new employees has a great negative impact on the company for several reasons. Firstly, it hinders timely delivery of current projects and, consequently, damages reputation and diminishes client portfolio. Secondly, it increases costs by generating the need for many recruitment specialists. Thus, adapting the HR strategy is essential, especially as increasingly more Millennials enter the labor market. The present paper aims at presenting options for studying voluntary attrition and the situations when they can be used. We indicate both descriptive methods (turnover and retention rates, cohort analysis), in order to present tools that any HR manager can easily employ, and predictive methods (logistic regression, survival analysis), which are more accurate and provide more actionable insight towards minimizing attrition, but require data and skills. The results are presented comparatively, highlighting the advantages and disadvantages of each category. Most literature focuses on a single method, thus the main contribution of this article is that it compares several methods, allowing for an informed decision of the HR specialist, depending on the company’s resources, personnel qualification and specific context.