What is attrition?

Attrition refers to a gradual decline in the workforce from employees leaving voluntarily or even being dismissed, and the vacant positions are left unfilled. In these cases, employees exit the workforce faster than they can be replaced.

Types of attrition

Attrition can be of the following types:

• Voluntary attrition: Employees depart from their employing organization of their own violation due to personal or professional motivations.
• Involuntary attrition: When employees are dismissed or fired for reasons like performance issues, misconduct or downsizing.
• Functional attrition: When an employee leaves the company for a reason that benefits the company, such as retirement or disability
• Dysfunctional attrition: When an employee leaves on a note that leaves the company at a major disadvantage, affecting it negatively.
• Internal attrition: When an employee migrates within the company from one department to another or to a higher-level role.

Most common reasons for attrition

The reasons for attrition can vary, but they often include:

1. Personal motivation
   Employees may seek employment elsewhere due to factors or circumstances in their personal life.
2. Professional motivation
   Employees can also leave a company when there is a lack of career advancement opportunities, or no salary increment in their present role.
3. Challenging work environment
   Company culture is a big part of what makes a company unique. That’s why it’s important to ensure that employees feel welcome and comfortable in their roles to contribute fully to a business’ growth.
4. Talent mismatch
   Incompatibility between a position and the employee hired to fill the role can be indicative of poor hiring practices, leading to attrition. This is especially apparent if a candidate was enthusiastic about joining a company but has lost interest after just a couple of months on the job.

Attrition – FAQs

What is attrition rate?

An attrition rate, also called a churn rate, is the percentage of people who leave a company or organization during a given period.

How to calculate attrition rate?

Attrition rate can be calculated by the formula mentioned below:
Number of employees leaving within the month / Average number of employees x 100

Is attrition the same as resignation?

No, attrition and resignation have different connotations. Resignation can be one of the causes of voluntary attrition.