Attrition

Definition and Meaning:

Attrition is the process by which an organisation reduces its number of employees as employees voluntarily leave, either through resignation, retirement, or death, and the organisation does not backfill those positions. In HR Management, attrition measures employee tenure within an organisation, and it indicates potential future hiring needs based on workforce levels at the establishment, as well as the overall health of an organisation.

Workforce Key Metrics

• Identifies the engagement and retention level of a company’s employees
• Enables an HR department to evaluate the number of employees who leave the company on their own and/or are terminated.
• Visibly supports workforce planning for hiring.
• Influences productivity, payroll expenses and employee morale.
• Often assessed through HRMS attrition reports.

Legal Compliance 

Statutes and statutory compliance do not apply solely to the issue of employee attrition.

Morale and industrial relations-related employee departures associated with attrition must be managed in accordance with the following statutes:

• The Industrial Disputes Act, 1947, concerning periods of retrenchment or termination
• The Shops and Establishments Act and the rules concerning notice periods, as applicable
• The company’s Human Resources exit and separation policies.