What is Attrition?

Learn about attrition and why you should be paying attention to it.

What Is Attrition

May 13th, 2019

Attrition is the gradual reduction of a workforce as employees leave or retire. This is usually measured by what is called the attrition rate. Most employers want a low attrition rate because it means that employees are satisfied and they don't have to train new people.

Rate of Attrition Formula:

ATTRITION RATE (%) = (Number of leaves ÷ number of employees) x 100

You can see that the rate of attrition is described as a percentage of your total workforce. By tracking attrition rates from one year to the next, you can identify patterns and pinpoint high or low points in employee retention.

Attrition is closely related to employee turnover or churn rate. However, turnover has more to do with the culture that you create within your company and the frequency of hiring and quitting/firing. Attrition is more concerned with the big picture and the numerical change in your workforce.

How to Lower Your Attrition Rates:

1. Pay attention to employee satisfaction.

As they say, the simplest explanation is usually the best. Often, the reason that employees leave a company for a new work opportunity is that they aren't happy where they are. Maybe they don't like the company culture, feel unappreciated, or would like to take on new responsibilities in their job. You can mitigate all of these factors by making employee satisfaction a priority.

Check out our article on employee engagement to learn more about how you can ensure that your employees are satisfied.

2. Offer competitive compensation.

People are far less likely to head for the exit if you can pay them as much or more than your competitors. A qualified employee has little reason to remain loyal to you if they could make more money somewhere else. Do some market research to determine what the average earnings are for people in your industry so that you can compensate your employees competitively. This is usually done by a compensation analyst.

3. Hire for the long term.

Good hiring practices can help to prevent high attrition rates in the future. When you hire new employees, evaluate them thoroughly to make sure that they are a good fit not only for the position but for the culture of your organization. One of the best interview questions that you can ask is, "How long do you see yourself in this role?" Essentially, you should dig deeper to find out if the candidate is ready to make a long term commitment to work for you.

The Bottom Line:

Attrition is an important HR metric that can tell you a lot about the direction of your business and possible problems that you may need to address. You can use these simple tips to help lower your attrition rate and keep the same employees in place for years to come.

How To Calculate Attrition
How to Calculate Attrition:

Attrition can be calculated by multiplying the number of employees who have left by your total number of employees and multiplying the result by 100. The formula looks like this: ATTRITION RATE (%) = (Number of leaves ÷ number of employees) x 100.