Employee Attrition | Meaning and Definition

What is Employee Attrition?

Employee attrition occurs when employees leave an organization due to reasons like voluntary resignation, layoffs, retirement, illness, or other personal circumstances. In HR terms, employee attrition represents the number of separations within a company over a specific period.

Why Does Employee Attrition Happen?

Employee attrition can happen for various reasons. Sometimes, employees choose to leave for better opportunities or due to personal reasons. In other cases, they may feel forced to leave because of company policies, layoffs, or a toxic work environment. Understanding these reasons is crucial for organizations to address and reduce high attrition rates.

What Causes Employee Attrition?

Employee Attrition is caused due to the following common reasons:

Negative Workplace Environment
Low Unemployment
Lack of Career Growth and Higher Pay

Let us understand each one of these in detail.

Negative Workplace Environment: A negative work environment or toxic culture often leads to employee attrition, as employees may seek healthier workplaces.
Low Unemployment: When unemployment is low, companies may struggle to fill vacancies left by departing employees, potentially lowering hiring standards or leaving roles unfilled.
Career Growth and Pay: If employees feel there’s a lack of career growth or fair compensation, they may consider other opportunities. Thus, increasing employee attrition.

What is the Employee Attrition Rate?

The employee attrition rate is the percentage of employees who leave an organization over a given period. It’s calculated as:

Attrition Rate = [Number of employees who left / Total number of employees x 100]

Example of Attrition Rate Calculation

Let us understand the employee attrition rate calculation with the help of an example.

How to Calculate Attrition Rate?

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