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First-year Attrition Rates and Hiring Intelligence

Optimizing your sourcing channels, assessment tests, and interviews is necessary for most hiring teams and team leaders, especially if you have proven methods that yield quality hires. But attracting and securing quality hires isn’t enough. You also have to retain those hires if you want to see long-term hiring success. 

88 percent of employees believe their employers did not do a good job when onboarding them, and studies have found that as high as 20 percent of employees leave within the first 45 days due to poor onboarding practices.

To better understand your onboarding practices and retention rates, you can start by measuring your first-year attrition rates. 

What is a first-year attrition rate?

First-year attrition rate refers to the percentage of candidates that leave or are terminated within their first year as an employee. Not to be confused with turnover rate, which only measures the rate at which employees voluntarily leave, attrition rate includes terminations, voluntary leaves (quitting), retiring, and all other reasons that an employee departs from the company. 

However, you can and should break down your attrition by turnover, termination, retirement, etc. Siloing these categories will give you a better idea of which parts of your hiring process and work culture may need improvement. 

What is a good first-year attrition rate?

A “good” first-year attrition rate will depend on your industry and work needs, but companies typically aim for an attrition rate of less than 10 percent. However, most organizations experience attrition rates that are closer to 10-20 percent, but these rates will change from year to year and business to business. 

How do you measure first-year attrition rate?

Because you’re measuring first-year attrition rates, you only want to measure the number of employees who leave or are terminated within the first year of employment. To get the most accurate and useful metrics, you should have at least two to three years of data to measure.

Here’s the formula you would use:

(# of new hires that were terminated/left the company within their first year ÷ # of new hires who did not exit within their first year) x 100. 

So, if you hired 50 employees over three years, and 10 of them left within their first year, you’d have a 20 percent attrition rate. First-year attrition rates will tell you more about your hiring process, including onboarding and quality of hire, than other long-term attrition rates. If employees drop off within their first year, you could have an issue with the quality of candidates, your onboarding process, or your ability to cultivate and nourish talent. 

The more years and first-year employees you have to measure, the more data you’ll have to identify hiring trends… and hiring intelligence is often the key to making sense of that data. 

How hiring intelligence helps first-year attrition rates

Hiring intelligence leverages advanced analytics and data to optimize and improve every hiring step in the hiring funnel. Hiring analytics can give you a bird’s-eye view of the hiring funnel, identifying where you’re sourcing the most qualified candidates, how well your assessment methods are at screening candidates, and how effective your interview panel is. 

Hiring analytics can also track new hires and assess new-hire performance month-over-month, providing you with key insights into the best-performing and highest ROI hiring sources. Platforms like Crosschq can tell you which recruiters yield the best hires that last the longest and what characteristics/qualifications lead to better hires. When you hire candidates that fit your company culture and share the same interpersonal qualities, you can expect them to stay with your organization longer. 

With Crosschq, you can improve your attrition rates and quality of hire with:

  • Quality of hire data that can correlate candidate skills and competency with prior work experience
  • Predictive technology that can help you align candidate fit with every role
  • Time-saving enhanced search capabilities
  • 100+ out-of-the-box reports and easy integrations to enable your quality-of-hire analytics
  • Easily customizable surveys that can better inform you as to why candidates left the organization
  • Customizable real-time alerts that provide you with the information you need when you need it
  • Candidate data enriched with soft skills, past education, performance, and more

Crosschq and first-year attrition rate

Crosschq can help you improve your attrition rate, quality of hire, and other key hiring metrics. Our proprietary technology can help you learn from your previous hires, providing you with all the tools you need to make more informed hiring decisions for the future. With Crosschq, you can have quality of hire as well as retention.

Get a Crosschq demo to see how we can help you create a more equitable and compatible workforce today. 


Mark Ko

by Mark Ko

Content Writer

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