Attrition Rate: Definition, Formula and How to Reduce It

Attrition rate is the percentage of employees who leave an organisation over a set period. You calculate it by dividing the number of departures by the average headcount for that period, then multiplying by 100. If 10 people leave a 100-person company in a year, the attrition rate is 10%.

Last reviewed July 2026.

What is attrition rate?

Attrition rate measures staff departures as a share of your average workforce over a chosen timeframe, usually a month, quarter or year. It is one of the clearest signals of workforce health an HR manager has. A stable, expected level of attrition is normal. A rising rate, or a rate that spikes in one team or tenure band, points to something worth investigating.

The number on its own tells you less than the pattern behind it. Two companies can both sit at 12% and be in completely different positions: one losing retiring veterans on schedule, the other losing its best performers in their first year. That is why the calculation is the easy part, and the diagnosis is where the real work sits.

How to calculate attrition rate

Follow four steps:

1. Pick the time period. Monthly, quarterly or annually. Be consistent so you can compare periods.
2. Count departures. Total the number of people who left during that period, for any reason.
3. Work out average headcount. Add headcount at the start and end of the period, then divide by two.
4. Apply the formula.

Attrition rate = (number of departures ÷ average number of employees) × 100

Two worked examples:

• Annual: 10 departures against an average headcount of 100 gives (10 ÷ 100) × 100 = 10%.
• Monthly: 5 departures against an average headcount of 50 gives (5 ÷ 50) × 100 = 10%.

Track the rate consistently and segment it by team, tenure, manager and departure reason. One benchmark worth acting on: if attrition among new starters runs above 10%, that usually points to a problem with onboarding or with the match between the role as sold and the role as lived.

The four types of attrition

Not all attrition is the same problem, and some of it is not a problem at all.

• Voluntary attrition. People choose to leave for better opportunities, career growth or work-life balance. This is the type most worth diagnosing, because it is the type you can influence. Professional development has become a deciding factor when people weigh up job offers, so a lack of visible career paths shows up here first.
• Involuntary attrition. Departures driven by the organisation: redundancies, restructures and terminations. Economic conditions push this around. How leadership handles these transitions determines whether the people who stay remain engaged or start updating their CVs.
• Functional attrition. Underperformers leaving. This can genuinely benefit the business by making room for stronger talent, provided you replace well. For senior roles the stakes are high: replacement costs for executives can exceed 213% of salary, so hiring for culture and capability alignment matters more the further up you go.
• Natural attrition. Retirements and other expected departures. As the workforce ages this will rise, which makes knowledge transfer and succession planning a forward job, not a reactive one.

What counts as a healthy attrition rate?

There is no single healthy number. Average turnover differs by sector, and market conditions move it year to year. Rather than chasing an external benchmark, compare against your own history and segment the data. The questions that matter: is the rate trending up, who exactly is leaving, and are they people you wanted to keep? A 15% rate made up of planned retirements and underperformers is healthier than an 8% rate concentrated in your top quartile.

What drives attrition

Five factors do most of the work:

• Job satisfaction. People who feel valued and well matched to their role stay longer. Misalignment between a person and their work environment is one of the most common, and most fixable, causes of departure.
• Career development. A missing growth path is one of the most cited reasons for leaving. Investment in development reads as investment in the person.
• Work-life balance. People who cannot balance work with the rest of their life will find an employer who lets them.
• Company culture. A toxic or misaligned culture drives people out quietly, then all at once. Culture fit works both ways: it keeps the right people and repels the wrong hires before they start.
• Compensation and benefits. Rarely the whole story, but uncompetitive pay makes every other frustration heavier.

What high attrition costs

The bill is bigger than the recruitment invoice:

• Replacement cost. Losing an employee can cost around 33% of their annual salary once you count recruitment, training and lost productivity. For executives, that figure can exceed 213%.
• Lost knowledge. Departing employees take institutional knowledge with them, which hits hardest in specialised roles.
• Morale. High turnover is linked to a 28% decline in staff morale. The people left behind absorb the workload and the uncertainty.
• Team disruption. Teams run on established relationships. Constant churn resets them.
• Reputation. Candidates read high turnover as a warning sign, which makes the replacement hiring harder and slower.

How to reduce attrition

The most effective levers, in rough order of impact:

• Measure engagement properly, then act on it. Regular staff surveys surface problems while they are still fixable. They only build trust if something visibly changes: 52% of staff believe change will follow a survey, and proving them right is the whole game. A platform like Compono Engage measures engagement, culture and team dynamics together, so you can see not just that people are disengaging but why.
• Build real career paths. Training, mentorship and visible routes to advancement. Engaged organisations see measurable gains here, including a 14% lift in productivity and 23% higher profitability.
• Protect work-life balance. Flexible arrangements are now table stakes, not perks.
• Fix onboarding. If early-tenure attrition is above 10%, start here. A strong first 90 days sets the trajectory for the whole tenure.
• Run exit interviews and actually use them. Ask what prompted the decision, how the person experienced the culture, and what specifically fed their dissatisfaction. Heavy workload alone accounts for close to 25% of preventable turnover, and exit data is usually where that pattern first becomes visible.

Reducing attrition after the fact is harder than predicting it. For the leading-indicator side of this problem, read our guide to managing attrition risk before people resign.

Frequently asked questions

What is a good attrition rate?

It depends on your sector and your own history. Averages differ across industries, so compare against your past trend and look at who is leaving. Low attrition among top performers matters more than a low overall number, and new-starter attrition above 10% usually signals an onboarding problem.

How is attrition rate different from turnover rate?

The terms are often used interchangeably, and the formula is the same. In practice, attrition usually describes departures where the role is not immediately refilled (such as retirements or restructures), while turnover covers all departures that need replacing. Pick one definition internally and apply it consistently.

How do I calculate attrition rate monthly?

Divide the number of departures in the month by the average headcount for that month (start headcount plus end headcount, divided by two), then multiply by 100. Five departures against an average of 50 employees gives a 10% monthly rate.

What causes high attrition?

The most common drivers are low job satisfaction, missing career development, poor work-life balance, a misaligned culture and uncompetitive pay. Exit interviews and engagement data will show you which of these is doing the damage in your organisation, since the mix differs by team.