This content is free thanks to our sponsors
Sponsored Ad – I may earn a commission if you click and buy
Business
Attrition Rate
The rate at which employees leave an organization over a given period, expressed as a percentage of the total workforce.
Attrition rate is calculated by dividing the number of employees who left during a period by the average number of employees during that period, then multiplying by 100. A 20% annual attrition rate means one in five employees leaves every year. In a 100-person company, that's 20 departures — and typically 20 replacements — every year.
High attrition is expensive: recruiting, interviewing, onboarding, and training a replacement typically costs 50-200% of the departing employee's annual salary, depending on seniority. Beyond direct cost, departing employees take institutional knowledge, customer relationships, and team morale with them. Reducing attrition by even a few percentage points generates substantial savings — which is why companies that invest in culture, compensation, and career development often have better financial performance than those that don't.