Hiring GlossaryWhat is attrition rate?
Understanding employee attrition rate
Attrition rate is one of those metrics that often gets thrown around in various HR meetings. But if you’re not in the thick of workforce planning, it can feel like another piece of fluffy HR jargon. Yet understanding your company’s attrition rate is critical for spotting deeper organizational issues before they become costly.
In sum, employee attrition rate is the rate at which employees leave your organization over a specific period of time and are not replaced. It’s an important measure of organizational health that can reveal a lot about your company’s culture, leadership and employee satisfaction.
Unlike employee turnover, which includes all separations (often for the purpose of backfilling), attrition implies a reduction in force, either because of restructuring or retirement, or because the role is simply no longer needed.
Let’s say you had 200 employees at the start of the quarter and 10 left the company. If you didn’t replace those 10, your workforce is now 190. That is attrition. If you hired 10 new people to fill those roles, that is turnover.
This difference matters because attrition often indicates long-term changes in your organization’s structure or direction. You could be shrinking a team due to automation, winding down a product line or quietly responding to budget constraints. Attrition can be intentional, but it can also be a red flag, especially if people are leaving voluntarily and you’re not backfilling due to burnout, hiring freezes or uncertainty.
And don’t forget to follow the data. Tracking your attrition rate can help you identify deeper organizational issues like disengagement, lack of career growth or cultural misalignment. It’s not just about how many people are leaving, it’s about why they’re leaving, who they are and what their exits mean for the future of your team.
Attrition vs turnover: Not the same thing
Although the terms are often used interchangeably, attrition and turnover are not the same. Both refer to people leaving a company, but the difference is in what happens after they go.
- Turnover is when an employee leaves and you replace them.
- Attrition is when an employee leaves and you don’t replace them.
Turnover includes all separations (often for the purpose of backfilling), while attrition implies a reduction in force, either because of restructuring or retirement, or because the role is simply no longer needed.
Turnover can be healthy. It brings fresh ideas, prevents stagnation and sometimes clears the way for stronger hires. But high turnover also creates instability, drives up recruiting costs and burns out existing employees by riddling the organization with perpetual change.
Attrition, on the other hand, doesn’t automatically mean something’s wrong. Sometimes it’s part of a planned downsizing, a result of natural retirements or a signal that certain roles are just no longer needed. But when attrition starts creeping up in the wrong departments, or is caused by avoidable issues like poor management or disengagement, it becomes a problem that needs addressing.
What causes high attrition and what it says about your company
There’s no single reason employees leave and aren’t replaced. In some cases, it's the budget. In others, it’s about strategy or timing. But high attrition often stems from one or more of the following:
- Lack of growth opportunities: When employees don’t see a future for themselves at your company, they start looking elsewhere.
- Toxic or unsupportive culture: If people don’t feel safe, respected or aligned with your company’s values, they won’t stick around.
- Weak leadership or poor management: A bad manager is one of the most common reasons employees leave.
- Compensation that doesn’t keep up: Competitive offers from other companies can quickly lure away undervalued employees.
- Burnout and overwork: Long hours, unrealistic expectations and lack of balance are key factors in wearing people down.
It’s also worth considering external forces that are prone to change, like cost of living, industry disruption or generational shifts in employee values like DE&I. Younger workers may prioritize flexibility, purpose and growth more than previous generations. If your policies and culture haven’t evolved to meet those expectations, your attrition rate will reflect that.
And remember, just because you’re not refilling a role doesn’t mean it’s not a problem. Failing to backfill can put more pressure on remaining employees, leading to even more attrition. It’s a cycle that’s hard to break without digging into root causes.
How to calculate attrition rate and what “high” looks like
Fortunately, calculating attrition rate is fairly straightforward:
Attrition rate (%) = (number of departures / average # of employees) x 100
For example, if you started the quarter with 200 employees and ended with 180, your average headcount is (200 + 180) / 2 = 190. If 10 people left and weren’t replaced, then:
(10 / 190) x 100 = 5.26% attrition rate
You can calculate this monthly, quarterly or annually, depending on how you track workforce changes.
So what counts as a “high” attrition rate? That really depends on your industry. Retail and hospitality often have rates over 30%. In tech or professional services, a rate above 15% could be a concern. The key isn’t to aim for zero, as some attrition is healthy and normal, but instead to monitor trends and investigate when things spike.
If your rate is steadily climbing or noticeably higher than your peers’ or industry benchmarks, it’s time to look deeper.
Reducing attrition by focusing on what matters most
There’s no quick fix for attrition. But if you understand why people are leaving and where they’re going, you can start to reverse the trend. The most effective strategies usually center around three key themes: employee growth, good leadership and culture alignment.
Start by talking to your people. Exit interviews, pulse surveys and even informal one-on-ones can give you invaluable insights into what’s working and what’s not. If recurring themes emerge, like a lack of development opportunities or poor manager relationships, prioritize those first.
Offer career paths that actually go somewhere. When people see a future at your company, they’re less likely to look for one somewhere else. Create clear development plans, invest in skill-building and promote from within when possible.
Don’t overlook your managers. The day-to-day experience of work is largely shaped by leadership. Encourage your managers to listen, support and guide their teams effectively. Bad management often leads to silent disengagement, which shows up later in the form of voluntary exits.
Finally, invest in culture. That doesn’t mean more happy hours – it means fostering a workplace where people feel seen, heard and supported. When your values align with your employees’ values, you don’t have to keep convincing them to stay.
Final thoughts
Attrition rate isn’t just a number on your HR dashboard. It’s a signal. It tells you whether your people are staying, whether your organization is adapting and whether your culture is doing its job. High attrition doesn’t happen in a vacuum. It’s almost always connected to deeper issues around growth, support, values or leadership.
By calculating your attrition rate regularly, comparing it with industry benchmarks and digging into the real reasons behind employee departures, you can make smarter decisions that strengthen retention and your business as a whole. If you haven’t looked at your attrition rate recently, now’s the time.
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