Attrition Rate

Meaning & Definition

The “attrition rate” describes the percentage of employees who leave their company during a given time period (often referred to as attrition) for any reason, including but not limited to quitting, retiring, and leaving for external or internal reasons. The attrition rate is used to give HR professionals an idea of how stable their workforce is, as well as to determine how well the company retains its employees.

Significance of attrition rate:

• Demonstrates employee confidence and overall workplace vitality.
• Assists human resources staff in identifying areas related to employee retention and engagement.
• Enables HR to develop more effective hiring strategies and plan workforce needs.
• Affects the productivity, costs, and continuity of business operations.
• Represents one of the major components of HR reporting and analytics.

Legal Considerations:

There is no specific statutory compliance that is specifically related to this phrase.

Although the statistics on attrition could probably be used to support the following points:

• The accuracy of statutory reporting.
• The compliance of the final settlement, gratuity, and exit strategies.
• Compliance with internal HR and manpower planning policies.