2. WHAT IS CHURNING
• Churn rate (sometimes called attrition rate), in its
broadest sense, is a measure of the number of
individuals or items moving out of a collective over
a specific period of time. It is one of two primary
factors that determine the steady-state level of
customers a business will support. The term is used in
many contexts, but is most widely applied in
business with respect to a contractual customer
base.
3. EMPLOYEE MOVES/ATTRITION RATE
• Churn rate can also describe the number of employees
that move within a certain period. For example, the
annual churn rate would be the total number of moves
completed in a 12-month period divided by the
average number of occupants during the same 12-
month period.
• Monthly and quarterly churn rates can also be
calculated.
• Formulae:
Attrition Rate(%) = Number of resigned for the
month/(Total Number of employees at the start of the
month + Number of Employees joined for that month -
Number of Employees resigned)*100
4. CHURN AND NETWORK ECONOMY
Kelly writes that Donald Hicks of the University of
Texas studied the half life of Texan businesses for the
past 22 years and found that their longevity has
dropped by half since 1970. That’s change.
But Austin, the city in Texas that has the shortest
expected life spans for new businesses, also has the
fastest growing number of jobs and the highest
wages. That’s churn.
Hicks told his sponsors in Texas “the vast majority of
the employers and employment on which Texans will
depend in the year 2026 – or even 2006 – do not yet
exist.”
CONNECTING EVERYTHING … INFLUENCING THE RULES OF THE NEW ECONOMY – Digital Spark Margeting
5. IMPLICATION
• We need to create churn through innovation to
continue to prosper.
• Kelly’s concept:
Wealth in this new regime flows directly from
innovation, not optimization. That is, wealth is not
gained by perfecting the known, but by imperfectly
seizing the unknown.
