Helping to reduce risk by improving clarity

Staff turnover presents a constant challenge for all organizations. With every change in your team comes reduced continuity, increased training costs and a possible slowdown in operational progress. Given the continuing and inevitable nature of employee attrition and its impacts, managing and minimizing negative consequences as effectively as possible can lead to better company culture and staff wellbeing—as well as helping the bottom line.

Precise estimates of staff attrition rates form one of the key inputs for accurate financial forecasts, affecting direct salary costs and indirect overheads that are driven by staff numbers. While direct salary costs can be simple to identify and analyze, finding and incorporating indirect costs into FP&A can be more difficult. For example, even if high staff attrition appears to reduce or have no effect on salary costs, indirect costs—such as advertising, training, onboarding, compliance and HR—may rise significantly. In addition, creating the appropriate link between staffing and the variability of indirect costs can add further complexity.

Bringing greater transparency to the true cost of staff attrition can show managers the benefits of a working environment that encourages employees to stay with the company. For example, incentive-based initiatives to retain staff can be measured and compared precisely against the attrition costs they are designed to reduce. With clear analysis, the expense of nice-to-have staff benefits can be measured against the impact they have on cutting attrition costs.

At Apliqo, we have developed a software model designed to predict and forecast employee turnover rates and analyze the associated workforce costs. Our model helps reveal the financial impact of scenarios based on different attrition rates and uses AI to help forecast which employees are most likely to leave.

The Apliqo Workforce Attrition Model uses AI algorithms to analyze factors, including employee demographics, job satisfaction metrics, performance indicators and more. The model combines this data with external feeds, such as labor market statistics, to generate an employee attrition analysis that highlights future financial challenges and risks.

With AI-generated insight, executives can identify areas of concern and take proactive steps to improve retention and mitigate risks. Underlying the employee attrition predictions, the model provides detailed and sophisticated cost forecasts, which can be incorporated into FP&A. Equipped with this insight, executives can make better-informed decisions regarding resource allocation, budgeting and strategic planning. Similarly, with AI helping to predict the future attrition rates and their impact, the HR team and other stakeholders can plan new ways to optimize talent management, improve employee retention and make a direct contribution to business success.