What is Attrition?
Attrition has the following two meanings:
- In business, it’s the process through which companies will reduce the size of their staff by not hiring new employees when the previous ones voluntarily leave their job. This is known as employee attrition.
- This term can also refer to the reduction of a client/customer base of a business when there are clients that leave, but there aren’t enough new customers replacing them.
What are the reasons that lead to attrition?
There are many reasons why an employee leaves a company, such as:
- The employee finds a better job position in another company
- The employee moves to another city
- The employee retires
- The employee can’t work because of some illness
When these employees leave the company, attrition occurs when:
- Their job role has become obsolete
- The organisation faces economical difficulties and has to reduce costs by reducing the number of employees
In general terms, employee attrition is a less aggressive and more humane way of reducing a workforce’s size than it would be making employees redundant.