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Definition: Attrition

Attrition, in Human Resource terminology, refers to the phenomenon of the employees leaving the company. 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.

Attrition Formula

Attrition can be calculated as :


Importance of Attrition

High attrition is a cause of concern for a company as it presents a cost to the company. The company loses on the amount it spent to recruit and select these employees and to train them for their respective jobs. The company may also have to spend additional money to fill the vacancies left open by these employees.

Software companies, in the recent past, have experienced high attrition rates of over 30%.

Attrition can also be used to refer to customer attrition which is the no of customers which a company has lost in a given period of time. Attrition, in general, refers to loss or decrease in no of personnel, material etc.

Hence, this concludes the definition of Attrition along with its overview.


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