# What Is Attrition Rate? Canonical URL: https://skillsociety.com.au/blog/glossary/what-is-attrition-rate Markdown URL: https://skillsociety.com.au/blog/glossary/what-is-attrition-rate/markdown Published: 2026-06-18 Author: Alberto Cubeddu Excerpt: Attrition rate measures the percentage of employees who leave an organization during a defined period, helping hiring and HR teams understand retention, workforce stability, and capacity risk. ## What Is Attrition Rate? **Attrition rate is the percentage of employees who leave an organization during a specific period.** It is usually calculated by dividing the number of departures by the average number of employees in that period, then multiplying by 100. In simple terms: attrition rate shows how much of your workforce is leaving over time. Many HR teams use attrition rate to understand retention, workforce stability, hiring demand, and the risk of losing important skills. In some organizations, attrition specifically refers to employees leaving without an immediate backfill. In others, it overlaps with turnover. Define the metric before comparing results. The basic formula is: Attrition rate = (number of employee departures / average number of employees) * 100 For example, if 12 employees leave during a quarter and the organization has an average headcount of 240 during that quarter, the attrition rate is 5%. ## Attrition Rate vs. Turnover Rate Attrition and turnover both deal with employees leaving, but they are often used to answer different questions. Turnover usually focuses on roles that need to be replaced. If a recruiter leaves and the company hires another recruiter into the same seat, that is turnover. The role continues, but the person in the role changes. 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. The distinction matters for hiring teams. Turnover creates replacement hiring demand. Attrition may reduce headcount, shift workload to remaining employees, or show that the business no longer needs a role. If the metrics are blended together, leaders may miss whether the issue is recruiting volume, retention risk, workforce planning, or team capacity. ## 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, internal moves, planned restructuring, and natural career changes are part of running a business. A zero attrition target is usually unrealistic and may not be healthy. 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 to Measure Attrition Accurately ### Define the Population 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. ### Choose the Time Period 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. ### Count Departures Consistently Decide whether to include resignations, retirements, deaths, terminations, layoffs, contract ends, internal transfers, and role eliminations. BLS labor turnover definitions separate quits, layoffs and discharges, and other separations, reminding teams that exits have different causes. ### Use Average Headcount Average headcount is usually: Average headcount = (employees at start of period + employees at end of period) / 2 This keeps the rate from being distorted when headcount changes during the period. ## 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?" Start by separating regrettable attrition from expected attrition. 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. 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. Finally, connect attrition data to the hiring plan. High attrition in critical roles can require faster sourcing, stronger pipelines, succession planning, and clearer prioritization. ## How SkillSociety helps SkillSociety helps hiring teams reduce avoidable attrition by improving early role-fit evidence. Structured AI screening, consistent questions, transcripts, summaries, and candidate insights help teams understand whether applicants match the role before live interview time is spent. That creates a cleaner hiring decision and a better handoff into onboarding. Recruiters and hiring managers can see why a candidate was advanced, where expectations may need clarification, and what support may help after joining. ## FAQ ### 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. ### Is attrition always bad? 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. ### How often should attrition rate be reviewed? 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. ## Further reading - [Greenhouse: What is attrition rate?](https://www.greenhouse.com/resources/glossary/what-is-attrition-rate) - [SHRM: Attrition: Definition, Types, Causes & Mitigation Tips](https://www.shrm.org/topics-tools/news/employee-relations/attrition-definition-types-causes-mitigation-tips) - [AIHR: Attrition Rate: Definition, Formula, Analysis, and Free Calculator](https://www.aihr.com/blog/attrition-rate/) - [U.S. Bureau of Labor Statistics: Job Openings and Labor Turnover Survey Data Definitions](https://www.bls.gov/jlt/jltdef.htm)