Employee attrition and retention go hand in hand. One highlights why people leave, while the other focuses on how to keep them. To keep your team engaged and your business thriving, it’s essential to approach them together
Low employee retention often signals deeper issues—such as disengagement or dissatisfaction with roles. Or, in a strong economy, people may be leaving for better opportunities. Whether it’s a warning sign or a natural shift, high attrition always deserves attention.
As Stacey Staaterman, CEO of Staaterman Strategic Advisory, puts it: “There is a strong relationship between retention and organizational change. If the employees don’t get it, understand it, believe in it, have the skills or time to support it, or have proper resources, they will leave or, at the very least, resist. Being curious about the WHYs behind attrition and resistance is job #1 — from there, an organization can deploy solutions.”
<< Calculate attrition with this free Excel template >>
What is attrition rate?
Attrition rate measures how quickly people leave a company, whether voluntarily or involuntarily. It’s expressed as a percentage and serves as a key metric HR departments track to assess company health.
Attrition vs. retention
The retention rate measures the percentage of people who remain employed by a company over a specific period. This is the opposite of attrition, which measures the percentage of people who leave the company.
Retention is a complex metric that, on its own, doesn’t tell much about organizational health. To understand the nuances, you also have to consider turnover and attrition.
Attrition vs. turnover
Though often used interchangeably, attrition and turnover have distinct meanings. Turnover measures the rate at which people leave their jobs, voluntarily or involuntarily, during a specific period of time.
Attrition is a long-term concept, focusing on how many people leave over extended periods and seeks to use big-picture, strategic thinking to solve larger organizational problems.
Types of attrition
Attrition can take different forms, depending on the reasons behind departures. Understanding the various types helps organizations address the underlying causes and develop strategies to manage them successfully.
- Voluntary attrition is when staff choose to leave the organization. Reasons include seeking better opportunities, pursuing further education, dissatisfaction with their current job or company culture, or personal circumstances.
- Involuntary attrition is when the employer terminates an individual’s contract. Common reasons for involuntary attrition include poor performance, misconduct, layoffs due to restructuring or downsizing, or changes in business needs.
- Internal attrition refers to staff who leave their current position but stay with the company by transferring to a different department or taking on a new role. While this doesn’t result in a net loss of staff, it can affect team dynamics and require training and onboarding for new roles.
- Demographic-specific attrition describes turnover within a particular demographic group, such as age, gender, ethnicity, or employee tenure. For instance, a company might experience higher attrition rates among younger team members or within a specific department, which can signal issues with inclusivity, career growth opportunities, or workplace culture.
- Retirement attrition happens when team members retire and the company doesn’t immediately replace them, leading to a natural reduction in the workforce.
- Functional attrition occurs when the departure of team members actually benefits the organization. This might happen when underperformers leave, allowing the company to bring in fresh talent who can contribute more effectively.
- Dysfunctional attrition refers to the loss of high-performing team members who are critical to the organization’s success. This type of attrition can be particularly challenging and may require immediate attention to prevent further impact on performance and morale.
How to calculate your employee attrition rate
To calculate attrition, divide the average number of departures in a given period by the average number of people in that period. Then, multiply by 100 to get the percentage.
Use this step-by-step method to calculate your attrition rate for any time frame—monthly, quarterly, or annually:
- Choose the time period you want to measure: Decide whether you’re analyzing attrition monthly, quarterly, or annually. Be consistent across comparisons.
- Count the number of team member departures during that period: Include all types of departures: voluntary resignations, retirements, and involuntary terminations.
- Calculate the average headcount for that period: Add your headcount at the start and end of the time period, then divide by two.
- Divide the number of departures by the average headcount: This gives you the basic attrition rate as a decimal.
- Multiply by 100 to get a percentage: This final figure represents the percentage of your workforce that left during the chosen period.
Your attrition rate shows how quickly people are leaving your organization. It helps you identify trends in turnover and assess whether your team is stable—or at risk of losing key talent. It also guides how you plan to replace talent, redistribute responsibilities, or improve retention efforts.
Attrition rate calculation example
Let’s walk through a sample calculation to see how the attrition rate is determined using actual workforce data. For this scenario, we’ll say your company starts the second quarter with 500 team members. During the quarter:
- 35 people left the company
- The company hired 20 new team members
To calculate the quarterly attrition rate, follow these steps:
- Calculate the average headcount for the quarter ((Starting headcount + Ending headcount) ÷ 2)
- Ending headcount = 500 – 35 + 20 = 485
- Average headcount = (500 + 485) ÷ 2 = 492.5
- Apply the attrition formula
- Attrition rate = (Churned team members ÷ Average headcount) × 100
- Attrition rate = (35 ÷ 492.5) × 100 ≈ 7.1 percent
This result means that around 7.1 percent of your workforce left the company during Q2.
Tracking attrition in this way across multiple periods can help HR and people teams identify patterns, spot retention issues early, and align hiring plans with business needs.
Attrition rate calculator
This Excel template makes it easy to plug in your workforce data and instantly see your attrition rate—no manual formulas needed.
Use it to analyze turnover across different time periods, spot trends, and support strategic workforce planning with accurate, real-time insights.
Here’s what’s included:
- A built-in attrition formula
- Fields for starting headcount, departures, and new hires
- Automatic calculation of average headcount and attrition rate
- Space to track multiple periods side by side
<<Download the calculator to determine your attrition rate.>>
What is an ideal attrition rate?
When it comes to pinpointing an ideal attrition rate, it’s not one-size-fits-all, though experts say companies should aim for below ten percent long as you’re maintaining a good balance between retaining experienced team members and welcoming new perspectives, you’ll find stability within your company. This balance helps keep your organization dynamic and adaptable without causing disruptions that can impact productivity.
Regularly checking your attrition rate can help you catch trends early. This way, you can make informed decisions to maintain a positive and productive work environment.
What is a high attrition rate?
According to averages, you can consider any attrition rate over 20 percent high. If your annual rate exceeds 20 percent, it may signal that you need to investigate potential issues and explore areas for improvement.
Rates between 10 and 20 percent aren’t necessarily alarming, but they could warrant a closer look. Take some time to evaluate what’s driving people to leave. Are exits concentrated in a specific team or department? Is it related to onboarding, management, or career development opportunities?
Understanding the “why” behind your numbers gives you a head start on solving challenges before they escalate to higher attrition.
Top causes of high attrition rates
Several factors can contribute to high attrition rates, including:
Pay levels
Compensation fundamentally impacts employee satisfaction and plays a significant role in reducing attrition and boosting retention. While pay isn’t the sole reason team members stay with a company, it ensures they feel valued and fairly compensated for their work.
Regularly reviewing and adjusting pay structures to align with industry standards can help reduce attrition.
Growth and development
Today’s workforce prioritizes career growth and development opportunities. Engagement can decline if they have limited opportunities to develop new skills, take on more responsibilities, or advance within the company.
Over 90 percent of people report that they’d stay in their jobs longer if the company invested in their career. Organizations can invest in continuous learning programs, offering mentorship opportunities, and creating clear career progression paths that help staff envision a future within the company.
Company culture
HR leaders understand the value of culture—but the data makes it undeniable. A toxic workplace culture is the single strongest predictor of attrition, ranking 10 times more influential than compensation.
Nearly half of business leaders say a positive culture boosts productivity, engagement, and retention. When companies invest in building a healthy environment—one that supports collaboration, inclusion, and work-life balance—they’re more likely to keep their people and strengthen long-term performance.
Stress
According to the American Institute of Stress, around one million workers miss work every day due to stress. High levels of workplace stress can stem from various sources, including excessive workloads, unrealistic expectations, lack of control over one’s work, poor management practices, and insufficient support. Chronic stress can lead to burnout, decreased productivity, and mental and physical health issues—all of which can increase the likelihood of team members leaving the organization.
Identifying signs of stress early can create a supportive work environment and address the root causes of stress to improve your people’s wellbeing.
How to reduce high attrition rates
HR leaders can help their companies minimize attrition rates and provide a more stable workforce by incorporating these practices:
1. Plan for varied employment
The best plans consider the company’s and people’s needs. HR leaders can create flexible workforce strategies that accommodate diverse work arrangements, including full-time, part-time, freelance, and remote or hybrid roles.
Companies can attract a wider talent pool and retain professionals whose needs align with the organization’s evolving demands just by offering a range of employment options. This can help improve job satisfaction and engagement, reducing the likelihood of high turnover.
2. Incorporate a warm offboarding program
HR leaders can implement an offboarding program that allows people to leave on positive terms. The offboarding process might include exit interviews, feedback sessions, and expressing genuine gratitude for the person’s contributions.
These insights offer a window into why team members choose to leave—highlighting trends, leadership gaps, or cultural issues that might not surface in regular engagement surveys. When gathered consistently and acted on, this feedback can help reduce future attrition by addressing challenges before they affect others.
3. Leave the door open for people to return
HR leaders can work with managers and executives to develop policies and a company culture that welcomes boomerang employees. High-quality people who leave and later decide to return can quickly contribute their valuable knowledge, experience, and enthusiasm.
Understand and improve your company’s attrition rate
Attrition is a natural part of the employee lifecycle. High employee attrition rates mean there’s room to grow—not that you’ve necessarily been doing anything wrong.
Recognizing attrition risk indicators and addressing the root causes, companies can create a more engaged and loyal workforce. This proactive approach helps retain valuable talent and strengthens an organization’s resilience to create a stable, satisfied, and productive workforce that drives long-term success.
Attrition rate FAQs
Is a high attrition rate good?
A high attrition rate is generally problematic for organizations. It often signals underlying issues such as poor management or low team member satisfaction. Although high attrition might sometimes indicate positive changes like restructuring or the removal of underperforming team members, it usually reflects more significant problems within the company. Analyzing the reasons behind the high attrition rate is key to understanding its impact and addressing any issues effectively.
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What does a 20 percent attrition rate mean?
A 20 percent attrition rate indicates that 20 percent of the workforce has left the company over a specific period, either voluntarily or involuntarily. Whether this rate is high or low depends on factors such as industry, company size, and market conditions.
How often should you review your attrition rate?
You should review your attrition rate regularly, ideally every quarter. This frequent review helps you catch trends early and make proactive adjustments to your workforce strategies. Staying on top of your attrition rate ensures you’re not caught off guard by unexpected turnover.
