Global Work Glossary
Table of Contents
What is attrition?
Employee attrition is a natural process within organizations, but it's essential to manage it effectively to maintain a healthy workforce. Here's a comprehensive guide to understanding and controlling employee attrition:
Definition and Measurement
Attrition Definition: Employee attrition refers to the departure of employees from an organization for various reasons, including resignation, termination, retirement, or death. Attrition Rate Calculation: The attrition rate can be calculated by dividing the average number of employee departures during a specific timeframe by the average number of employees in that same period, then multiplying by 100.
Employee Attrition vs. Employee Turnover
Attrition vs. Turnover: Attrition refers to the gradual reduction of the workforce over time, while turnover involves positions that need to be filled again. Monitoring and Addressing: Understanding the difference helps HR teams monitor long-term vacancies (attrition) and evaluate talent retention effectiveness (turnover).
Types of Employee Attrition
Voluntary Attrition: Employees leave the organization by choice due to factors like compensation, growth opportunities, company culture, or work-life balance. Involuntary Attrition: Employees are let go by the company due to reasons such as mergers, downsizing, automation, or terminations. Retirement Attrition: Employees retire from their roles naturally, highlighting the need for succession planning and knowledge transfer.
Common Causes of Employee Attrition
Voluntary Attrition Causes: Insufficient compensation, lack of growth opportunities, poor work culture, work-life balance issues, and better job opportunities elsewhere. Involuntary Attrition Causes: Mergers, downsizing, automation, terminations, layoffs, and external events like pandemics or recessions.
Strategies to Control Employee Attrition
Positive Offboarding Experience: Ensure departing employees leave on a positive note through transparent communication, effective offboarding processes, and maintaining relations with former employees. Continuous Improvement of Work Culture: Analyze exit interview data, hold HR retrospectives, and incorporate learnings into cultural practices to continuously evolve the work culture. Prevent Unplanned Attrition: Facilitate internal mobility, invest in training and development, provide growth opportunities, offer competitive compensation and benefits, and understand the value of perks to prevent unplanned attrition.
