“Attrition Rate”

What is Attrition Rate?

Employee turnover rate, often referred to as attrition rate, is a key business metric that measures the rate at which an organization is losing its personnel. It is usually represented as a percentage (%), wherein the higher percentage reflects a higher rate of turnover. It can be divided into two types: voluntary attrition and involuntary attrition. Voluntary attrition is when people leave the organization on their own accord—such as quitting a Job Application —while involuntary attrition is when people are laid off due to organizational restructuring, downsizing, budget cuts, etc.

What are the Different Types of Employee Attrition Rates?

Employee attrition rate refers to the percentage of employees who have left the organization over a given period of time. Employee attrition rate can be broken down into various types, depending on the causes for the departures. The most common types of leave attrition is voluntary attrition, often due to dissatisfaction with the job role, workplace conditions, or environment. Other types include resignations, terminations, retirements, layoffs, and deaths.

Why is Calculating Attrition Rate Important?

It is an important measure of organizational health and stability, as it provides an indication of employee satisfaction and engagement within the organization while also reflecting the impact of Retrenchment decisions on the workforce. The rate of attrition within an organization is indicative of a range of factors, from the quality of its leadership and strategy to the effectiveness of its recruitment, and provides valuable insights into the way the organization is functioning.

FAQs

How to Calculate Attrition Rate?

It can be calculated by dividing the number of employee departures by the number of employees in the organization, and then multiplying by one hundred. This metric is essential for assessing not only employee turnover rate but also hiring a trainee rates. For example, if an organization had 500 employees and 25 departures during a given period, It would be calculated as follows: 25/500 x 100 = 5%.

How Does Attrition Rate Impact Company Culture and Productivity?

High attrition rates have a significant impact on company culture and productivity, as employee departures can negatively affect morale and motivation. It can also lead to a loss of organizational knowledge, decrease in customer service, and lead to gaps in production. Therefore, lowering attrition rate and improving employee retention should be a priority for organizations looking to maintain a healthy culture and level of productivity.

Also, See: Employee Retention | Human Resource Managers | Key Performance Indicator KPI | Jobseeker