What Is Employee Attrition?

What is employee attrition?

Employee attrition is the loss of employees through retirement or resignation where employers decide not to refill the position.

Attrition vs. turnover

There is a difference between attrition and turnover. Turnover may involve either voluntary or involuntary termination; but in these cases, the position is refilled. With attrition employers do not fill the position.

Benefits of attrition

Attrition can be beneficial for organizations, especially if they are dealing with financial hardships and hoping to avoid the need for involuntary layoffs. Attrition can result in the natural reduction of the workforce, allowing employers to reduce staffing costs without the need to terminate employees.

Drawbacks of attrition

Attrition has drawbacks, though. In some cases, attrition can mean the loss of high potential staff members. This may especially be the case in situations where employers have announced their intent for a reduction in force. High performing employees who are likely to be most able to find positions elsewhere may decide to leave the organization voluntarily before they are asked to leave.

Employers need to be able to predict and manage attrition to allow them to realize the potential benefits of attrition while avoiding the potential downfalls — analytics can help.

Analytics and attrition

Through analytics, organizations can track and predict attrition based on factors such as team makeup, skill sets, roles, tenure, and compensation ratios. Using predictive analytics, they can identify where they are at risk of potentially losing top talent and take proactive steps to minimize the likelihood that attrition will occur.

Attrition and DEI

Attrition may also be an indication that an organization’s diversity, equity, and inclusion (DEI) efforts are not successful. For instance, an organization may be successful at attracting and hiring diverse candidates, but those candidates may decide to voluntarily leave the organization if, for instance, they do not feel the environment is inclusive.

Monitoring attrition is an important way for organizations to reduce the risks of losing top talent based on skill set or demographics.