Glossary

What is attrition?

Attrition in HR management refers to the gradual reduction of an organization's workforce when employees leave their roles and are not replaced. These departures can result from voluntary decisions, such as resignations or retirements, or involuntary actions, such as layoffs or terminations. Unlike turnover, where vacant positions are promptly filled, attrition reflects a permanent reduction in headcount over time.

Attrition is typically measured through the attrition rate, calculated by dividing the number of employee departures during a specific period by the average number of employees during that time, then multiplying by 100. This metric helps organizations track and understand workforce changes.

Employee attrition vs. employee turnover

While both terms describe employees leaving an organization, there’s a key difference:

• Attrition: Refers to positions left vacant indefinitely, reflecting a strategic decision to reduce workforce size.
• Turnover: Refers to roles actively filled after an employee’s departure, measuring retention and hiring effectiveness.

Types of attrition

To manage attrition effectively, organizations must first identify its type and underlying causes.

• Voluntary attrition: Employees choose to leave for reasons such as better opportunities, dissatisfaction with the workplace, or personal circumstances. This type requires immediate attention, especially if it affects high performers or becomes widespread.
• Involuntary attrition: The organization initiates these departures, often due to layoffs, restructuring, or performance issues. While sometimes unavoidable, HR teams should address the potential morale impact.
• Retirement attrition: Employees leave due to retirement. This natural form of attrition may require succession planning or mentorship programs to retain institutional knowledge.

Common causes of attrition

Voluntary attrition drivers:

• Insufficient compensation
• Lack of growth opportunities
• Poor workplace culture
• Limited focus on diversity, equity, inclusion, and belonging (DEIB)
• Poor work-life balance
• Excessive workload or stress
• Better job offers elsewhere

Involuntary attrition drivers:

• Mergers or restructuring
• Downsizing or cost-cutting initiatives
• Automation or outsourcing
• Performance-based terminations
• Layoffs due to economic or external events

Managing and controlling attrition

While attrition is natural, proactive measures can help organizations mitigate its negative effects and ensure workforce stability.

• Don’t burn bridges: Treat employee departures as an opportunity to build goodwill. This includes clear communication, robust offboarding processes, and maintaining relationships with former employees, including “boomerang” hires.
• Evolve work culture: Use insights from exit interviews to identify areas for improvement. Regularly evaluate and enhance company culture to address recurring issues.
• Avoid unplanned attrition: Proactively reduce unexpected departures by facilitating internal mobility, offering professional development, conducting salary reviews, and providing valuable benefits.

Attrition, when understood and managed effectively, can be a tool for improving workplace practices and ensuring long-term organizational health. By addressing its causes and strategically planning for workforce changes, companies can retain top talent while maintaining a positive and resilient culture.