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How to reduce employee churn rate with predictive AI?

Amrita Kar

Last Updated: 30 March 2023

In this article:

In 2022, Amber surveyed employees exiting from more than 250 organizations to understand why they had decided to leave. And here are some of the reasons that came up in their conversations.

Team leader’s behavior is very bad. In fact, the assistant manager’s behavior is worse

“The work culture is not good at all.

“Too much workload and work pressure.

Already told in the last discussion

Employees quitting their jobs is a natural order of things. But things get dicey when too many of them start leaving too soon, and to top it off, you have no clue why they're jumping ship!

In this blog post, we will explore how HR professionals can use predictive AI to reduce employee churn, improve retention rates, and create a happier and more productive workforce.

What is employee churn?

Employee churn is the rate at which employees leave your organization voluntarily or involuntarily, and are replaced with new candidates. 

Causes of employee churn in enterprises

In 2022, Amber decided to ask some of the employees who were leaving our organization why they chose to do so. Here’s what came up. 

  1. 34.3% of employees left an organization due to poor work-life balance and burnout.
  2. 15% of employees that left an organization cited manager support and management style as their reason for leaving. 
  3. 14.2% of employees left an organization due to a lack of career growth and job satisfaction
  4. While these were the top 3 reasons, some other reasons employees left their jobs are - benefits & compensation (10%), physical & mental well-being (9.9%), and lack of recognition and feedback (3.5%).

Screenshot 2023-03-28 at 4.55.39 PM

How to calculate the employee churn rate?

Here’s the formula for calculating the employee churn rate for a given period:

Employee churn rate during a given period =

(Number of employees exits/ Average number of employees) x 100                  

In this case, here’s how you’ll calculate the average number of employees during a given period: 

Average number of employees during a given period =

(Number of employees at the end /Number of employees at the beginning) / 2.

So, if your average number of employees during a quarter is 400, and 8 of them leave during that period, your employee churn rate would be

Employee churn rate = (8 x 100) / 400 = 2%

Average employee churn rate by industry


The historical average churn rate in healthcare has been 21.08%, which increased to 22% in the first quarter of 2021.


Next to healthcare, the IT industry suffers from a high average churn rate of 18.3%.


The historical average churn rate for the retail sector has been skyrocketing at 34.55%, and it will reach 35% in 2021.

Employee churn prediction

The average cost of replacing a top performer is 213% of their annual salary. That’s why leaders resort to employee churn analysis and AI-based tools to identify at-risk employees who may be on the verge of leaving the organization.

Predictive analysis uses data modeling, statistics, and mining to analyze current and historical figures and draw patterns for futuristic prediction. All techniques carry their share of benefits.

Benefits of using predictive AI for employee churn

1. Enables data-led decision-making

Data mining and analytics can help you identify patterns in employee behavior and get a sense of the experience that they are having at your organization. By using data-driven decision-making, you can monitor performance, recognize achievements, and highlight areas for improvement. Measuring employee experience in real-time boosts retention and spots employees at risk of leaving. 

2. Provides a better understanding of employee needs

Predictive tools like Amber’s employee experience platform can gather genuine feedback on company culture and the work environment. Employee exit surveys can help you uncover the true reasons for employee departures so you can take corrective measures.

3. Helps you retain top talent 

Data analytics comes in handy to predict top talent turnover. It can assist you in detecting the crests and troughs in performance to identify the employees who are disengaged or flight risks for your company.

4. Personalizes employee development plans based on analytics 

In-depth data shows each employee’s strengths and weaknesses. Analyzing that information can help you figure out employee skills and competencies. Once you know what your employees are good at, you can create personalized training and development plans.

Strategies to Mitigate Employee Churn

1. Enhance employee engagement

Employees who are highly engaged at their workplaces are up to 87% less likely to quit. They are known to be more productive and have lower absenteeism than disengaged employees. These reasons are enough to attract your attention. You can boost employee engagement by

  • Encouraging employee participation in the decision-making process
  • Sharing regular updates on your business plan and company performance
  • Nurturing a sense of belonging and recognition
  • Focusing on employees’ health and well-being
  • Encouraging an open-door policy
  • Supporting employees' interests and hobbies

2. Offer competitive compensation

Offering employees salary and perks as per the industry standards is critical in retaining them and preventing exits. Fair performance-based pay and bonus programs come in handy to keep employees happy at the workplace and mitigate churn risks.

3. Gather timely and genuine feedback 

Your employees want you to listen to them. While you may not have the bandwidth to sit with every employee and gather their feedback, AI-based chatbots like Amber can take the load off your shoulders. She can be your Chief Listening Officer and uncover real-time employee experiences within your organization through continuous listening. 

By regularly gathering your employees’ feedback, you can identify and address any issues before they become problems. Your employees are more likely to stay when they feel heard.

4. Build a strong employer brand

A positive reputation and a strong brand give your employees a significant reason to stay. While building such a brand is difficult, it is equally rewarding as it develops trust between your employees and the company.

As Sunil Setlur, ex-CPO of Gojek, opens up, “You can’t enforce trust. You can win and earn trust. And you do that by being clear that you will honor your commitment.” He shares how they used an anonymous feedback mechanism to nudge employees to ask questions during town halls. They answered employees’ questions and that built trust. Eventually, employees started opening up without the need for anonymity.

5. Providing leadership opportunities

Employees always seek better growth opportunities and quit if they don’t find such options. You can prevent exits due to such reasons by

  • Offering timely opportunities for promotion
  • Identifying and encouraging employees to take on leadership roles
  • Offering appropriate training and development to enhance their leadership skills

6. Improving work-life balance

If a balanced work environment was a decision parameter for employees to stick with an organization, the pandemic made it indispensable. You can improve the work-life balance in your company by offering flexible work hours and the option to work remotely. You can also promote time off and sabbaticals for reasons like taking time out for family, health & wellness, or professional skill development. You can establish official boundaries and encourage your employees to stick to them to avoid stress and burnout.

Utilizing predictive AI in your HR strategy can be a game-changer when it comes to reducing employee churn. By analyzing various data points and identifying potential patterns, you can take proactive steps to retain your top performers and address potential issues before they escalate.

From identifying flight risks to personalized retention strategies, the benefits of implementing predictive AI are clear. With the right tools and approach, you can leverage this technology to create a happier, more engaged workforce and ultimately drive greater success for your organization. 


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