What Is Attrition Rate? Formula, Examples and Benchmarks
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What is attrition rate?
Attrition rate measures employee departures during a defined period as a percentage of average headcount. Divide the number of departures by average employee headcount, then multiply by 100. If 12 employees leave a workforce averaging 240 people during a quarter, the quarterly rate is 5%.
In simple terms: attrition rate shows how much of your workforce is leaving over time.
There is an important definition choice. Some employers use attrition for all departures; others reserve it for departures where the role is not replaced. SHRM describes attrition as workforce reduction without immediately filling the vacancies. State which definition your report uses before comparing results. SHRM's attrition guide.
This guide uses the broad departure-rate calculation and shows how to report unfilled roles separately. The examples are illustrative calculations, not industry benchmarks.
Why Attrition Rate Matters
Attrition rate matters because employee exits affect delivery, customer experience, manager workload, team morale, knowledge, and hiring plans.
Some attrition is normal and even expected. Retirements, planned restructuring, and natural career changes are part of running a business. A zero attrition target is usually unrealistic and may not be healthy. Internal moves also affect team capacity, but should be reported separately from company-wide departures.
The warning sign is unwanted or poorly understood attrition. If strong performers, early-tenure hires, specialists, or people from one manager's team are leaving at a higher rate, the company average can hide a serious problem.
Track attrition as a trend, not a one-time percentage. Compare monthly, quarterly, and annual patterns, and look at whether the business intended those roles to remain open.
How do you calculate attrition rate?
Attrition rate = departures during the period ÷ average headcount during the same period × 100
A simple average is:
Average headcount = (opening headcount + closing headcount) ÷ 2
Worked quarterly example
Suppose a company starts a quarter with 230 employees, hires 32 people and has 12 departures. It ends with 250 employees.
| Calculation | Result |
|---|---|
| Closing headcount | 230 + 32 − 12 = 250 |
| Average headcount | (230 + 250) ÷ 2 = 240 |
| Quarterly departure rate | 12 ÷ 240 × 100 = 5% |
The company grew while employees were leaving. Net headcount growth does not mean attrition was zero.
If four of the 12 departures meet your documented definition of an unbackfilled role, you could also report 4 ÷ 240 × 100 = 1.67% as an unbackfilled-departure rate. Label it separately and specify when you assessed the backfill decision. A vacancy still awaiting approval is different from a role deliberately removed.
When should you use a more detailed average?
The opening-and-closing method is an approximation. It can miss a hiring surge, seasonal peak or acquisition in the middle of a period. Average consistent daily headcount snapshots when available, or use a documented monthly averaging method for longer reporting periods.
Use people counts in both numerator and denominator. Dividing employee exits by full-time-equivalent staffing mixes different units unless you have explicitly designed a separate FTE-based measure.
Define the population and time period
Decide who is included. Full-time employees, part-time employees, seasonal workers, contractors, interns, and contingent workers can produce different results. Use one rule consistently. For an employee attrition measure, exclude non-employees or report them as a separate workforce measure.
Attrition can be measured monthly, quarterly, annually, or for a specific workforce event. Monthly reporting helps spot early changes, while annual reporting is better for longer-term planning. In small teams, one exit can distort the percentage.
Attrition rate vs. turnover rate vs. retention rate
These labels are not universally standardised. The useful distinction is the question each measure answers.
| Measure | Question | Reporting rule |
|---|---|---|
| Employee departure or turnover rate | How frequently are people leaving? | Count defined exits against average headcount; replacement is not required for an exit to count |
| Attrition without backfill | How much capacity is leaving without replacement? | Identify qualifying departures and record the decision about each role |
| Employee retention rate | How many members of the starting workforce stayed? | Follow the original employee cohort; exclude later hires from that cohort |
| Internal movement | Who changed teams or roles within the employer? | Track team movement separately from organisation-wide exits |
Attrition often points to workforce reduction or unfilled capacity. If an employee leaves and the company does not backfill the role because of a hiring freeze, restructuring, automation, retirement planning, or shifting priorities, that is commonly treated as attrition.
In particular, turnover does not require a replacement hire. The US Bureau of Labor Statistics counts payroll separations and distinguishes quits, employer-initiated separations and other departures such as retirement. Its unit is an establishment, so some location transfers count; your company-wide report may exclude them. BLS JOLTS definitions, updated 6 May 2026.
Retention is not automatically 100% minus turnover: the denominators and eligible people can differ. See employee retention and employee turnover rate for the adjacent measures.
What does the latest Australian data show?
The ABS release published 31 July 2026 puts Australia's job mobility rate at 7.2% for the year ending February 2026. It also reports that 2.1 million people left or lost a job over that period. ABS: Job mobility, February 2026.
The 7.2% figure is not an employer attrition benchmark. ABS divides people who changed jobs by people employed at the end of the year. A company departure rate usually counts exits against average headcount and can include people leaving employment altogether. The population and denominator differ. ABS methodology notes within the release.
Use that evidence as labour-market context. Set your operational targets from comparable roles, consistent definitions, your own history and the consequences of losing particular capabilities.
What is a good attrition rate?
There is no universal good attrition rate. It depends on industry, role type, company stage, labor market conditions, workforce strategy, and whether departures are expected or unwanted. Compare against your own historical trend first, then use external benchmarks carefully.
Start with four comparisons:
- Same period: Compare an annual rate with an annual rate, or the same quarter across years when hiring is seasonal.
- Same population: Separate permanent staff, casual employees and fixed-term contracts if their exit patterns serve different business purposes.
- Same exit rules: Distinguish resignations, retirement, redundancy and contract completion.
- Same business impact: Review critical skill loss and unwanted departures alongside the total rate.
For a ten-person team, one departure produces a 10% rate if average headcount is ten. Show the count with the percentage, use longer trends, and avoid ranking small teams on one exit.
Practical Guidance for Hiring Teams
Hiring teams should treat attrition rate as both a retention signal and a workforce planning input. If attrition rises, ask "How many roles do we need to fill?" and "Why are people leaving, and should these roles be replaced?"
Use the following process to investigate rising attrition.
1. Reconcile the underlying records
Check employee IDs, start and end dates, rehires, leave status and transfers. Confirm that exits from payroll match the HR report. A reporting boundary change can look like a sudden retention problem.
2. Separate the reasons and consequences
Report voluntary and involuntary exits separately. Add a documented definition of regrettable attrition: departures the employer wanted to avoid because of their impact on capability or delivery. Record whether a role will be replaced independently of that judgement.
A planned retirement with a succession plan is different from a strong new hire leaving after 90 days. Early-tenure attrition may point to mismatched expectations, weak screening, unclear role requirements, poor onboarding, or a process that selected for the wrong signals.
3. Investigate patterns without assuming a cause
Review attrition by source, recruiter, hiring manager, role type, location, compensation band, tenure, and assessment result where the data is reliable. If one source produces hires who leave quickly, job marketing or screening criteria may need adjustment. If one team loses new hires repeatedly, review manager expectations, workload, and onboarding.
Use groups large enough to interpret responsibly. For early departures, compare advertised expectations, interview notes and onboarding experience. An association with one recruitment source is a prompt to investigate; it does not prove the source caused employees to leave.
4. Assign a response and check it
Choose an action connected to the evidence: clarify job expectations, fix a workload problem, improve manager support or plan knowledge transfer before retirement. Give it an owner and a review date. Track both departures and whether the underlying problem improved.
Finally, connect attrition data to the hiring plan. High attrition in critical roles can require faster sourcing, stronger pipelines, succession planning, and clearer prioritization. Link the findings to your talent retention strategy and talent pipeline.
Where hiring evidence helps
When early exits point to a mismatch between the job offered and the job experienced, review the hiring conversation. SkillSociety offers AI screening and interview summaries that can help teams record role expectations and follow-up questions. SkillSociety hiring tools.
A screening record can support that review; it does not establish why an employee left or demonstrate a reduction in attrition. Evaluate any hiring-process change against actual post-hire outcomes.
FAQ
Q: Is attrition always bad?
A: No. Attrition can be planned, expected, or strategically useful when a role is no longer needed. It becomes a problem when valuable employees leave for preventable reasons, when critical knowledge is lost, or when remaining teams absorb unsustainable workload.
Q: How often should attrition rate be reviewed?
A: Most teams should review attrition at least quarterly, with monthly monitoring for high-volume, fast-changing, or high-risk teams. Annual views are useful for strategy, but they can hide short-term spikes that need faster action.
Q: Do internal transfers count as attrition?
A: Usually not in a company-wide employee exit rate because the person remains employed. Count them separately when measuring team departures, and disclose the reporting boundary.
Q: Can I multiply a monthly attrition rate by 12?
A: That produces a simple annualised estimate, not the actual annual result. Prefer total departures over the year divided by average headcount over the year. Label forecasts and assumptions explicitly.
Q: Should new hires who leave quickly count?
A: Yes, if they belong to your defined employee population and leave during the reporting period. Also examine them in a separate new-hire cohort to understand early retention.
Q: Does low attrition mean employees are happy?
A: No. The rate records departures, not motivation or working conditions. Pair it with employee feedback, workload information and career-development conversations.
Review the evidence behind your next hire
Start with a clear role brief and consistent questions about skills and expectations. Book a SkillSociety demo.
Further reading
- Greenhouse: What is attrition rate?
- SHRM: Attrition: Definition, Types, Causes & Mitigation Tips
- AIHR: Attrition Rate: Definition, Formula, Analysis, and Free Calculator
- U.S. Bureau of Labor Statistics: Job Openings and Labor Turnover Survey Data Definitions
Sources
- ABS: Job mobility, February 2026, released 31 July 2026; figures refer to the year ending February 2026.
- BLS: JOLTS data definitions, updated 6 May 2026.
- SHRM: Attrition definition and calculation, 15 April 2024; used for terminology, not current benchmarks.
- SkillSociety: Hiring tools, product descriptions reviewed 15 September 2026.
