What is Attrition?

• A reduction in the number of

employees through retirement,
resignation, sickness or death.
• Attrition rate can be calculated as:
Attrition Rate (%)=

(Number of separations/ Number of employees) * 100

 0%
2%
4%
6%
8%
10%
14%
16%
18%
20%

12%
Retail

Insurance

Financial services
India (2018)

Professional services

Banking

Pharmaceuticals

IT

Telecom

Transport and logistics

Real estate

NGO/NPO
engineering/
manufacturing
Automobile
Attrition Rates in different sectors in
Types of Attrition
Reasons why an employee leaves
an organization
• Monetary factors

• Work-Life Imbalance

• working condition

• Lack of appreciation

• Lack of respect
cont.…
• Lack of support

• No Flexible work schedules

• Mismatch between job and person

• Less frequency in giving rewards

• The job or workplace was not as

expected
Effect of Attrition on organization

• Loss of productivity

• Cost of overtime

• Recruiting costs

• Interviewing costs

• Time spent in orientation

What is Retention?

• Employee retention is a process in which the

employees are encouraged to remain with the
organization for the maximum period of time
or until the completion of the project.

• Employee retention is beneficial for the

organization as well as the employee.
Importance of Employee retention
• Hiring is not an easy process.

• An organization invests time and money

in grooming an individual and make him

ready to work and understand the

corporate culture.

• When an individual resigns from his

present organization, it is more likely

that he would join the competitors

cont.…
• The employees working for a longer

period of time are more familiar with

the company’s policies, guidelines and

thus they adjust better.

• Individuals sticking to an organization

for a longer span are more loyal towards

the management and the organization.

Key areas in employee retention