Attrition Rate

Glossary of HR Terms Attrition Rate

What is Attrition Rate?

Attrition Rate, also known as employee turnover rate, is the percentage of employees who leave an organization over a given period of time, typically measured monthly, quarterly, or annually. It includes voluntary departures (resignations), involuntary departures (terminations), and retirements.

Why it matters

A high attrition rate can signal problems with employee satisfaction, engagement, compensation, or culture. Monitoring attrition helps organizations identify retention challenges, forecast hiring needs, and measure the effectiveness of HR strategies. Controlled attrition, however, can also create opportunities for fresh talent and new skills to enter the organization.

Where it fits in the HR stack

Attrition rate is a key HR metric tracked within the people analytics and workforce planning layer of the HR stack. It relies on data from HRIS, payroll, and performance systems, and is often analyzed alongside engagement and retention tools to understand the “why” behind turnover.

Common use cases/Examples

  • Measuring voluntary turnover to assess employee satisfaction.
  • Identifying high attrition in specific departments or job roles.
  • Tracking attrition after organizational changes like mergers or restructures.
  • Comparing attrition against industry benchmarks.
  • Using attrition data to improve retention and workforce planning.

Examples of companies that track it

  • Enterprises like IBM, Deloitte, and Accenture track attrition closely to manage large global workforces.
  • Tech companies such as Google and Amazon use people analytics to link attrition data to engagement, manager performance, and culture.
  • SMBs and startups monitor attrition to avoid losing key talent in critical growth phases.

FAQ

The terms are often used interchangeably, but some organizations use “attrition” to describe natural exits (like retirements or resignations not replaced) and “turnover” for all separations.

It varies by industry. For example, hospitality and retail often see higher attrition (30–40%), while professional services may target under 15%.

Attrition Rate = (Number of employees who left ÷ Average number of employees during the period) × 100.

Yes. Healthy attrition can remove underperforming employees, bring in new skills, and reduce costs in times of restructuring.

Competitive compensation, career development programs, strong leadership, employee engagement initiatives, and clear career paths are proven strategies.