Understanding Employee Attrition: Definition, Types, Attrition Rate & Best Practices

by | Published on Sep 18, 2023 | Last Updated on Feb 17, 2024 | Human Resources

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Understanding Employee Attrition

Employee attrition is a significant challenge that organizations face today, impacting productivity, employee morale, and organizational growth. As the workforce landscape evolves, it is essential for organizations to adapt and implement effective strategies to retain their valuable employees and minimize the undesirable effects of employee attrition. But how can organizations tackle this challenge head-on? By understanding the various types of employee attrition, monitoring attrition rates, and employing best practices to enhance employee satisfaction and engagement.

In this blog post, we will delve into the concept of employee attrition, its different types, and the factors that influence it. Furthermore, we will discuss how to calculate and interpret attrition rates, and explore the best practices to reduce employee attrition and maintain a thriving workforce.

Related Article: What is Employee Turnover?

Key Takeaways

  • Employee attrition is the process of employees leaving an organization, and understanding it is essential for organizations to identify potential issues and improve employee retention.
  • Voluntary, involuntary, and internal attrition are types of employee attrition that must be monitored in order to properly address factors such as job satisfaction & compensation, career development opportunities & workplace culture.
  • Best practices to reduce employee attrition include recognizing/appreciating staff through feedback/awards. Providing training & development programs. Promoting work-life balance with flexible schedules & wellness services.
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Understanding Employee Attrition

Employee attrition refers to the process of employees departing from an organization, either voluntarily or involuntarily, and can have a significant impact on an organization’s success. Organizations that keep track of their employee attrition rates are better equipped to pinpoint potential issues and devise strategies to boost employee retention. Factors such as job satisfaction and compensation, career development opportunities, and workplace culture and environment play a crucial role in influencing why employees leave.

Next, we will explore the concept of employee attrition in depth and explain why its monitoring is of paramount importance.

Definition of Employee Attrition

Employee attrition, also known as employee turnover, is defined as the decrease in the number of personnel due to resignations, retirements, or terminations. Comprehending the motives behind departing employees is key to enhancing retention strategies.

While attrition focuses on the number of positions that are not replenished when personnel depart, turnover encompasses the aggregate of all employment terminations, including those employees that are replaced. Offering competitive employee’s annual salary can help in reducing attrition.

Employee Attrition and Sabbatical

Sabbaticals are another significant factor to consider when discussing employee attrition. A sabbatical is a prolonged break from work that employees may take for various reasons, such as personal growth, travel, or to pursue a passion project. While not a permanent departure, sabbaticals can temporarily impact an organization’s workforce just like attrition. However, offering sabbaticals can also be a powerful retention tool. Employees who know they have the option to take a break from work are often more likely to stay with the organization in the long run. Hence, while sabbaticals may contribute to short-term attrition, they can help in reducing long-term attrition rates by enhancing job satisfaction and employee loyalty.

Importance of Monitoring Attrition

Observing attrition rates assists organizations in recognizing problems, enhancing employee retention, and sustaining productivity. Retaining employees helps in preserving institutional knowledge within the organization.

Problem identification and staff retention enhancement hinge on understanding why employees decide to leave, including understanding personal reasons that may contribute to their decision to leave. Cultivating a sense of belonging within the workplace can result in a 50% lower risk of turnover for new employees. Exit and stay interviews can offer an understanding of why employees depart the company and what keeps them, which can help recognize strengths and areas of difficulty.

Requesting and providing feedback enhances employee satisfaction and can be a valuable tool in addressing attrition.

Types of Employee Attrition

Employee attrition can be categorized into voluntary, involuntary, and internal attrition. Each type of attrition has its unique characteristics and implications for an organization.

Grasping these diverse types of employee attrition allows organizations to pinpoint particular issues and devise strategies tailored to mitigate them.

Voluntary Attrition

Voluntary attrition is when employees choose to terminate their employment. This can happen for a variety of reasons, including:

  • Better opportunities elsewhere
  • Dissatisfaction with their current position
  • Health-related issues
  • Relinquishing their role due to a hostile work environment

A potential cause for concern regarding voluntary attrition might be when a company observes its marketing experts leaving various business units.

Attempting to reduce voluntary attrition among high-value talent can help to prevent a decline in productivity in the long-term. Uncovering the causes of voluntary attrition and tackling them head-on empowers organizations to hold onto their prized employees and sustain a robust, productive workforce.

Involuntary Attrition

Involuntary attrition occurs when the company initiates the departure of an employee. The most common instance of involuntary attrition is when a company opts to remove a given position, often in an effort to reduce expenses and ensure financial stability. In some cases, involuntary attrition may be due to poor performance or misconduct on the part of the employee.

Emphasizing talent progression through cross-training could be a suitable option to address involuntary attrition resulting from position eliminations. Organizations that invest in the growth of their existing employees can dampen the adverse effects of involuntary attrition and uphold a competent, flexible workforce.

Internal Attrition

Internal attrition is when employees transition from one department to another within the same organization. This type of attrition can be advantageous when it directs talent to more profitable areas and ensures a better match between employee and job. However, internal attrition can be detrimental if it results from deficiencies in the job or inadequate management capabilities.

Organizations need to carefully assess the causes and consequences of internal attrition to ensure that they are fostering an environment that supports employee growth and development. By proactively tackling potential issues, organizations can lessen the detrimental impact of internal attrition and preserve a dynamic, driven workforce.

2023 Employee Attrition Rates

The chart below shows attrition rates for 2023. This data is based on a variety of sources, including the Society for Human Resource Management (SHRM), the U.S. Bureau of Labor Statistics, and various industry surveys.

Attrition Rates 2023

Factors Influencing Employee Attrition

Several key elements contribute to employee attrition, affecting both the organization and the individual employees. In this part, we will delve into the factors that sway employee attrition, including job satisfaction and compensation, opportunities for career development, and the culture and environment of the workplace.

Job Satisfaction and Compensation

Job satisfaction and compensation play a crucial role in employee attrition rates. While an employee’s annual salary is not the only factor in employee satisfaction, a competitive salary is often necessary for employees to be content in their job. Offering below-market compensation can make it challenging to maintain staff, and organizations should periodically evaluate their compensation plan to sustain their staff.

Insufficient remuneration is one of the primary factors contributing to employee dissatisfaction. Organizations that commit to fair compensation can enhance job satisfaction, curtail attrition, and uphold an enthusiastic, efficient workforce.

Career Development Opportunities

Career development opportunities are essential for employee satisfaction and can significantly impact attrition rates. Employees who feel that they have room for growth and advancement within the organization are more likely to remain loyal and engaged with their work.

Organizations can provide growth opportunities through various means, such as:

  • Offering training and development programs
  • Creating clear career paths
  • Providing opportunities for employees to take on new challenges and responsibilities

Organizations that prioritize career development can hold onto their skilled employees and cultivate a culture that values relentless growth and enhancement.

Workplace Culture and Environment

A positive and inclusive workplace culture can greatly impact employee attrition rates. By fostering a sense of belonging and engagement among employees, organizations can create an environment where employees feel respected, valued, and motivated to perform their best work.

Some of the components of a constructive and inclusive workplace culture include:

  • Open communication
  • Regard for diversity
  • Acknowledgment and gratitude of personnel
  • Emphasis on employee well-being and work-life balance

With these practices in place, organizations can decrease employee attrition and foster a more fruitful and accomplished workforce.

Calculating Employee Attrition Rate

This part will guide you on how to compute employee attrition rates and make sense of the results. Understanding how to calculate attrition rates can provide valuable insights into the effectiveness of employee retention strategies and highlight areas for improvement.

Attrition rates are calculated by dividing the number of employees who have left the organization in a

Attrition Rate Formula

The formula for calculating employee attrition rate is to divide the number of employees who departed the company during a specific period by the average number of employees in that period. This calculation provides organizations with a percentage that represents the rate at which employees are leaving the organization.

As an illustration, if 10 employees left the company in a month and the average number of employees in that month was 100, then the employee attrition rate would be 10/100 x 100 = 10%. This information can be used to evaluate the efficacy of employee retention strategies and compare attrition rates to industry norms.

Interpreting Attrition Rates

Organizations can analyze attrition rates in relation to industry averages, job roles, and organizational goals. Technology had the highest turnover rate in 2018, according to LinkedIn’s 2018 talent turnover report – 13.2%. Retail and consumer products and media & entertainment followed closely with 13% and 11.4% respectively.

Through attrition rate interpretation, organizations can:

  • Spot potential problem areas
  • Devise specific strategies to confront them
  • Compare the organization’s attrition rates to industry standards
  • Evaluate the overall effectiveness of their employee retention efforts.

Best Practices to Reduce Employee Attrition

Having examined the various types of employee attrition, the contributing factors, and the calculation of attrition rates, we will now turn our attention to the best practices for curtailing employee attrition.

These strategies and approaches can help organizations minimize attrition and improve employee retention, ultimately leading to a more successful, productive workforce.

Employee Recognition and Appreciation

Acknowledging and valuing employees builds trust and creates an atmosphere where employees feel appreciated for their contributions. Employee recognition increases morale and encourages employee engagement, ultimately leading to lower attrition rates and increased job satisfaction.

Organizations can implement various employee recognition programs, such as regular feedback, awards for outstanding performance, and opportunities for career advancement. When organizations appreciate and value their employees, they cultivate a positive work environment conducive to employee retention and overall success.

Training and Development Programs

Training and development programs play a crucial role in reducing employee attrition and enhancing organizational performance. Organizations that arm their employees with necessary skills and knowledge instill a feeling of investment in them, consequently reducing the likelihood of attrition.

Organizations can offer various training and development programs, such as on-the-job training, off-the-job training, and e-learning. Organizations that offer opportunities for professional growth not only elevate employee satisfaction and retention but also maintain their competitiveness in the market.

Employee Well-Being and Work-Life Balance

Promoting employee well-being and work-life balance is essential in reducing attrition and improving overall job satisfaction. A beneficial work-life balance can help create an atmosphere favorable to employee retention and productivity. Research has shown that employees with higher well-being are more likely to remain with the organization, resulting in lower turnover rates.

Organizations can promote employee well-being and work-life balance by providing flexible work schedules, offering wellness programs, and encouraging employees to take regular breaks. Ensuring that employees have access to resources such as mental health services, financial planning, and career development opportunities can also contribute to a more balanced, healthy, and productive workforce.


In conclusion, employee attrition is a complex issue that affects organizations across various industries. By understanding the different types of employee attrition, monitoring attrition rates, and implementing best practices to enhance employee satisfaction and engagement, organizations can effectively reduce employee attrition and maintain a thriving workforce.

It is essential for organizations to continuously evaluate and adapt their strategies to address employee attrition, as the workforce landscape continues to evolve. By fostering a positive and inclusive workplace culture, providing growth opportunities, and ensuring that employees are fairly compensated and appreciated, organizations can create a more successful, productive, and loyal workforce.

Frequently Asked Questions

What is attrition vs turnover?

Attrition is the total number of employee departures, both voluntary and involuntary, while turnover only refers to voluntary departures. For instance, if an employee resigns or is laid off, it should be counted as attrition. If the employee quits of their own accord, it is considered a turnover.

What are the reasons for employee attrition?

Employee attrition can be caused by a variety of factors, such as low compensation, inadequate benefits, lack of recognition or career development, poor management, and a hostile work environment. Other common reasons include job satisfaction, career opportunities, workplace culture, employee motivation, work-life balance, and fitting in with the company.

Does attrition mean layoffs?

Attrition can refer to both voluntary and involuntary loss of personnel; however, it is mainly used in reference to employees leaving a company without being replaced, and it is often seen as a less disruptive alternative to layoffs.

Is 20% attrition high?

Industry averages show that any attrition rate above 20% can be considered high. Therefore, a 20% attrition rate can indeed be seen as high.

How can organizations calculate employee attrition rates?

Organizations can calculate employee attrition rates by dividing the number of employees who left during a period by the average number of employees in that period. This provides an indication of how frequently employees are leaving the organization.