by Attrition refers to the normal phenomenon of the employees leaving the company/organization voluntarily (or involuntary) due to reasons which can be professional or personal pertaining to the company’s environment and culture. Attrition in a company is usually measured with a metric called attrition rate, which simply measures the no of employees moving out of the company (voluntary resigning or laid off by the company). Attrition Rate is also referred as churn rate or turnover.
Though turnover tends to be more short term as compared to attrition. Internal job role movement may or may not be part of overall attrition but can be part of a particular unit’s attrition.
Reasons:
Workforce demographics: If your company is filled with Baby Boomers, their upcoming retirements may result in a loss of staff that you cannot easily replace.
Low unemployment: If your area or industry has low unemployment rates, you may not be able to replace employees who leave, even if you wanted to. You can either leave the positions vacant (attrition) or reduce your hiring standards or expand your search.
Reorganizations/Restructuring: This type of attrition is the goal of these company reorganizations. Positions are intentionally and carefully eliminated with the plan of never refilling them.
Toxic workplace: If your business is not a good place to work, you may find it challenging to keep positions filled. You may wish to lower your attrition rate but find it challenging to do so because people leave quickly, and your company’s reputation as a toxic employer spreads. If you’re experiencing a high level of attrition, this is one of the first areas you should investigate. Listen to employees in exit interviews and pay attention to your online reviews. If your Glassdoor reviews are negative, take them to heart and work to correct them.
Types:
Voluntary attrition: When an employee chooses to leave the company that is voluntary attrition. This can include any reason an employee leaves on their own accord, whether it’s truly voluntary or not. True voluntary terminations, such as resignations for a new job or to move across the country, are the ones you’re probably most familiar with. But an employee who leaves due to health reasons or only quits because the work situation is toxic can also fall under voluntary attrition. The company retains the decision not to replace the employee although there are some times the company would like to replace someone but cannot.
Involuntary attrition: When the company decides to part ways with an employee, this is involuntary attrition. This can be through a position elimination, for example, due to reorganization or layoffs, for cause (such as stealing or fighting), poor performance, or termination when someone abandons their job. (You can argue the last one is a voluntary termination, but the company makes the final call to terminate.) The company then doesn’t backfill the position or eliminates it.
Involuntary attrition through position elimination is the most common form of attrition, as the company decides proactively to eliminate a position. For other types of termination, the company usually decides after the termination to leave the job vacant.
