Employee Attrition Rates in the Philippines: Fast Facts and Stats

What is Employee Attrition?

Employee attrition is the rate workers depart a business over time, frequently due to retirement, resignation, or termination. High attrition rates can be expensive for the company regarding productivity, hiring, and training costs and can cause decreased morale among the remaining staff.

Recruitment solutions expand your talent pool and reach through online platforms, social media, and employee referrals. They help attract qualified candidates who align with your company culture. Leveraging recruitment solutions streamlines hiring, reduces time-to-fill, minimizes productivity loss, and decreases burnout and turnover.

Employee Attrition Facts

Among Southeast Asian countries, the Philippines has one of the highest attrition rates, with 18%, second only to Singapore at 19.6%.

The attrition rate in the Philippines, particularly in the business process outsourcing (BPO) industry, is a major concern for many employers. In the BPO industry, the attrition rate reaches as high as 30% to 40%, significantly higher than the average across all sectors.

Job dissatisfaction and employee turnover are primarily driven by limited career progression, low pay, inadequate employee benefits, poor leadership and management, and work-life balance issues. These factors contribute significantly to employee churn.

The Impact of Attrition Rates on Business Costs and Productivity

Employers frequently struggle to find and keep mid-career professionals since few eligible applicants exist. It can cause high business costs, resulting in decreased employee morale, higher hiring and training costs, and lost productivity. 

To cut costs, some industries in the Philippines have resorted to terminating employees, unintentionally contributing to attrition rates. Some companies have even closed specific business units as part of their efforts to minimize operational expenses.

Due to more employment opportunities, the voluntary attrition rate has risen in other industries, like shared services (15.8%), non-financial services (15.1%), and high-tech (13.2%). 

Impact on Key Industries in the Philippines

The Big Quit of 2021 has significantly impacted industries in the Philippines, including construction, professional, scientific, and technical services, electrical supply, and technology and communication.

Due to issues including burnout, a lack of work-life balance, inadequate pay, and little prospects for career advancement, industries are suffering. As a result, companies in these industries face the challenge of retaining their top talents and attracting new ones to fill the vacant positions.

To address this, companies are implementing retention strategies like competitive compensation, career development, and work-life balance.

Employee Attrition Rate Stats

• The 2021 monthly attrition rate is 14% higher than in 2020 (Sprout Solutions)

According to Sprout Solutions, the rise is due to widespread resignations resulting from exhaustion, reservations, and changing priorities.

• 67% of the employers cited dissatisfaction with pay as the main attrition cause in 2021 (Mercer)

This finding highlights the significance of fair and competitive compensation in retaining top talent. Additionally, 41% of employers acknowledged that limited career advancement opportunities played a role in employee turnover.

• Compared to the full-year rate of 11% in 2021, the half-year voluntary attrition rate reached 6.7% by mid-2022 (Mercer)

This shift in voluntary attrition rates highlights the evolving dynamics of the job market. Employees are becoming more proactive in pursuing better opportunities, seeking roles that align with their career goals, and prioritizing job satisfaction.

• 38% of workers intended to switch jobs in 2021 or after the economy has improved (Personio)

This finding suggests a potential rise in employee turnover in the foreseeable future. Moreover, the Philippines is also expected to experience a rise in employee turnover in 2023. These emerging trends emphasize the need for companies to prioritize effective retention strategies. Organizations must create an engaging work environment that fosters employee satisfaction, growth, and development.

• 4.25 million people left their occupations in January 2022 (People Managing People)

The industries with the highest turnover rate are the hospitality, leisure, and retail sectors, resulting from the COVID-19 pandemic. The data report may also show some similarities with the Philippines regarding the industries affected during and after the pandemic.

Employee Attrition in the Philippines: Insights

• Utilize technology to streamline the recruitment process and make it more efficient

Artificial intelligence-enabled (AI) tools like applicant tracking systems, automated interview scheduling, and video interviewing platforms can streamline and automate the hiring process, saving time and effort. Furthermore, you can also use data analytics and AI to enhance recruiting efficiency and efficacy to find the best candidates and forecast their performance in the position.

• Build a strong employer brand highlighting culture, values, and social responsibility

A strong employer brand is like a magnet for people who share your business’s goals and values. It not only keeps your workers happy and engaged but also helps you develop a reputation that lures top personnel through employee recommendations.

• Offer hybrid work options for employee flexibility

Hybrid work arrangements improve employee attrition rates by allowing flexibility, autonomy, and work-life balance. It can also help attract and retain talent by allowing employees to work from home, save on commuting costs, and have better control over their work environment.

A staggering 76% of employees oppose returning to the office, and more than half (56%) would contemplate quitting over this plan. Embracing hybrid work arrangements allows companies to reduce office space requirements and costs, benefitting employees and employers.

• Leverage recruitment solutions for broader talent acquisition

Leveraging recruitment solutions can help companies expand their talent pool and enhance the hiring process.

Online job platforms, social media, and employee referrals provide access to a sizeable candidate pool. With 86% of job seekers using social media in their search, these platforms can streamline recruitment, making it efficient and cost-effective while bringing in high-quality candidates who fit the company culture.

• Provide career growth opportunities and upskilling for employee development and retention

When employees feel valued and supported, they’re more likely to remain loyal and contribute to the company’s success. Upskilling programs can also improve employee skills and knowledge, making them valuable assets to the company. These, in turn, reduce the reliance on external hires.

Attract and Retain Top Talent with Inquiro

To retain employees in the competitive job market, companies can leverage recruitment solutions, strengthen their employer brand, offer career growth opportunities, and provide hybrid work arrangements. These strategies will not only help attract and keep top talent but also create a positive and engaging work environment.

Inquiro offers expert, efficient data-driven recruitment solutions to help you find and retain top talent. Contact Inquiro today to learn more about our solutions and take the first step in redefining your recruitment strategies.

Frequently Asked Questions

What is the status of the employment rate in the Philippines?  

The Philippine Statistics Authority (PSA) reports that the unemployment rate in the Philippines was at 7.4% in October 2021, which translates to 4.05 million unemployed individuals. The government continues its efforts to boost employment through various initiatives and programs.

What is the average employee attrition rate? 

The general average employee turnover rate across industries is around 15%. However, the rate can vary significantly depending on industry, company size, and location. High levels of employee turnover can result in increased costs for a company due to recruitment, training, and lost productivity.

Why is employee attrition a concern for businesses?

First, having a high turnover rate can be expensive because finding and training new hires can be costly. Second, it could impact the company’s reputation and productivity.

Third, losing knowledgeable workers can affect the organization’s knowledge and expertise, deteriorating quality and efficiency. Finally, a poor work environment and low employee morale brought on by high turnover rates might make it challenging to recruit and keep top personnel.

Interested to uncover new insights about the market? Get in touch with us today and let’s see what we can discover together. Email us at info@inquiro.ph.