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What is employee attrition?
Employee attrition is the natural, unpredictable, and inevitable reduction in the workforce of an organization due to retirements, sickness, deaths, and elimination of the job role. The employee attrition rate is calculated by factoring in employees who decide to move out of the organization due to personal or professional reasons.
While a certain level of attrition is bound to happen, organizations must aim for low employee attrition rates. Acknowledging employee attrition helps organizations identify the problems that cause employee displacement and develop effective strategies to ensure attrition rates do not get out of control.Employee turnover measures the deliberate reduction in an organization’s workforce and occurs when dissatisfied employees quit their job or layoffs and terminations occur. Although both employee turnover and attrition are concerned with employees leaving an organization, attrition is due to natural and unavoidable reasons while turnover is due to completely avoidable reasons. Turnover can be voluntary as well as involuntary, while attrition is almost always voluntary.
How is the employee attrition rate calculated?
To calculate the employee attrition rate, you will need to divide the number of employees who left the organization by the total number of employees and multiply the result by 100.
Employee attrition rate = (No. of employees who left/ Total no of employees) X 100
Ideally, organizations should maintain their employee attrition rate between 10-12%. If your attrition rate is maintained between this range, the only other thing you need to look out for is voluntary and demographic attrition as that might be an indicator of inequity in your organization and a negative work culture.