Employee Attrition

Meaning & Definition

Employee Attrition is the reduction in the number of employees when some employees leave the company or industry, either by resigning or retiring, and their positions are not immediately filled. Employee Attrition is often measured as the Attrition Rate in HR Analytics. High levels of Employee Attrition have a negative impact on productivity and employee engagement.

Important Features of Employee Attrition

• Helps in tracking workforce stability and retention patterns.
• Influences hiring costs and employee planning.
• Affects employee confidence and the productivity of a team of employees.
• Influences the employer branding and reputation of a company.
• Helps in data-driven HR decisions through analysis of employee attrition rates.

Applicable Regulation & Policies

No particular statutory compliance is directly related to employee attrition.

However:

• Final settlement, notice period, gratuity, and statutory dues should be processed as per labour laws.
• Documentation of exits and adherence to employment contracts are important.

Payroll and final settlement processing are important during employee exits.