Attrition Rate

The attrition rate is a key performance indicator used to measure the rate at which employees leave a company, either voluntarily or involuntarily. It is a crucial component of workforce planning, providing insights into employee retention and the overall health of an organization's culture and work environment. Companies track this metric to understand workforce stability, identify potential internal issues, and forecast future staffing levels and recruitment costs.

From a financial perspective, a high attrition rate directly impacts a company's bottom line. It increases expenses related to recruitment, hiring, and training new employees, while also leading to potential productivity losses during the transition period. Accurate attrition figures are essential inputs for FP&A teams when conducting headcount planning and forecasting salary-related operating expenses.