Attrition Rate
Attrition rate, also called employee turnover rate, measures the percentage of employees who leave an organisation (through resignation, retirement, or termination) during a specific period, relative to the average number of employees during that period. It is a key HR metric used to assess workforce stability, engagement, and the effectiveness of retention strategies.
The standard formula is: (Number of employees who left / Average number of employees during the period) × 100. Attrition can be voluntary (resignation) or involuntary (termination/layoff), and organisations often track both separately along with department-wise and tenure-wise breakdowns to identify specific retention issues.
Key points
- ✓ Formula: (Employees who left / Average headcount) × 100, usually expressed monthly or annually
- ✓ Can be split into voluntary attrition (resignations) and involuntary attrition (terminations)
- ✓ Industry benchmarks vary widely; IT/BPO sectors often see higher attrition than manufacturing
- ✓ High attrition increases recruitment, training, and productivity-loss costs
- ✓ Often analysed alongside exit interview data to identify root causes
Example
If a company had an average headcount of 200 employees in a year and 24 employees left during that year, the annual attrition rate is (24 / 200) × 100 = 12%.
Frequently asked questions
What is considered a healthy attrition rate?
What's the difference between attrition and turnover?
How can HR software help reduce attrition?
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