Attrition rate: The formula + what it reveals about your organization

A straightforward way to confirm your suspicions about rising resignations in your organization is to calculate your attrition rate, or the percentage of employees leaving without replacements. Gallup data shows it’s more common than ever for employees to be on the lookout for other opportunities, with 51% of respondents saying they’re either casually looking or actively seeking new roles.* So, while attrition may seem like a simple stat, it can also tell you how healthy your organization is and how it’s structurally evolving.

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In this guide, we’ll cover those insights and more, so you can understand why employees are leaving and how you can support retention risks to keep headcount (and morale) high.

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* Gallup, 2024

<h2>What’s an attrition rate?</h2>

Attrition rate is the percentage of employees leaving your business at a given time (typically monthly) and without direct replacements. Besides telling you how fast your company is shrinking, this measurement often links to multiple organizational changes and challenges, including management issues and waning employee engagement.

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Here’s the basic formula for an attrition calculation: 

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attrition rate = (# of departed employees / # of total employees) * 100% 

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So if your company averaged 200 employees in August and 10 left without replacement during the month, the attrition rate is 5%.

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Some attrition is inevitable, and how often people leave depends on the industry. Retail tends to have higher attrition than industries like finance and the public sector, and the higher up on the ladder an employee is, the less likely they are to leave (according to a recent Mercer report). That same study found that the average attrition rate across the United States hovered around 13% between Q4 2024 and Q3 2025.

<h2>Attrition rate vs. turnover rate</h2>

Employee turnover is another business metric that’s often mentioned alongside attrition rates, but it measures a different trend in the workforce. Where attrition rates show positions disappearing, turnover concentrates on the cycle of departures and replacements. So, HR leaders should view turnover as part of regular workforce operations that doesn’t impact overall headcount, but attrition can be more of an issue.

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Turnover rate measures the number of employees who leave a company and have a replacement. For example, if three employees leave for retirement and the company doesn’t replace them, that counts as attrition. But if three new team members are hired to fill those roles, the retirees count toward turnover.

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Attrition only tracks employees who leave and aren’t replaced. This means attrition rates that stay high will shrink your headcount over time — purposefully or not. Higher attrition rates can also come from planned moves, rising during major organizational restructures and department consolidations. 

<h3>Attrition’s role in your organizational strategy</h3>

“Commit to development versus growth. Creep, not leap. Invest constantly and develop people on their strengths so they can perform better.” 

— Steve Browne, Chief People Officer at LaRosa’s

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Separating attrition from turnover rates is important when you’re trying to build a stronger people strategy, since both numbers tell a different story. 

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In short, attrition often shows how your organization is evolving structurally, while turnover gives more context into how well you’re sustaining and developing your teams. Turnover keeps your company size steady, but higher rates may signal issues with management or aspects of the employee experience (e.g., compensation misalignment or lack of development opportunities). At the same time, high attrition rate might be coming from deep structural shifts that will improve employee engagement long term. 

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When either rate starts to rise, it’s important to recognize the red flag and investigate the reasons behind it. 

<h2>What attrition rate reveals about organizational health</h2>

Employees leaving without being replaced is usually a symptom of a struggling system. Effective HR teams should view attrition as a signal flare for deeper structural or leadership challenges, such as: 

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• Poor manager quality: The feeling that management has an employee’s back is a major driver behind their decision to stay on board. According to Gallup research, this factor alone accounts for 70% of the variance in team engagement, making it one of the key areas to focus on when targeting retention.

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“When leaders see and call out individual contributions, it builds purpose and belonging — especially when everyone’s behind a screen.” 

— Luck Dookchitra, former VP of People and Culture at Leapsome

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• Low employee engagement: Gallup estimates just 20% of the workforce feels truly engaged, making this a common retention risk. Besides weak management strategies, other engagement-draining influences, like burnout and feeling disconnected from work, can cause attrition rates to skyrocket.

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• Limited career growth opportunities: If employees don’t see a long-term career path in their current role, they may look elsewhere. That’s why 90% of companies that responded to LinkedIn’s 2024 Workplace Learning Report said development and learning opportunities are their primary retention strategy. Strong L&D programs are also a reinvestment into your existing workforce, so the tactic is a win-win.

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People don’t quit as soon as they realize their manager isn’t going to give them better feedback and their promotion path is obscured at best. It takes time for attrition rates to rise, so rather than reacting to it after the fact, effective HR teams can use tools like Leapsome to detect patterns before they become a problem. With Leapsome’s all-in-one HRIS, you’ll have a clear read across the entire employee experience so you can take action ASAP. Built-in tools like engagement surveys and performance reviews make it easy to collect ongoing feedback, so you can create timely retention strategies before attrition is an emergency.

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Caption: Leapsome’s Engagement Surveys helps your HR team detect engagement risks and undercurrents of dissatisfaction long before attrition rates rise.

Alt text: A Leapsome dashboard pop-up recommending strategies and rewards based on an employee’s survey results.

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🔮 Look into employee opinions for stronger satisfaction

Leapsome helps you send engagement surveys in a unified platform to collect data you can connect to other operational changes and use to build proactive retention strategies.

👉 Explore Engagement Surveys

<h2>How to strategically reduce your attrition rate</h2>

The point of reducing attrition isn’t to keep employees forever. Even if your organization were perfect, people will leave your company for personal reasons or to pursue new opportunities. Instead, your focus should be on rooting out and correcting structural issues, like underperforming management or limited development opportunities, that are driving employees out the door.

<h3>Improve manager effectiveness</h3>

“An ineffective manager doesn’t take time to understand their people or build trust. The best ones care deeply, they know where you want to grow, challenge you when needed, and make space for honest feedback.” 

— Luck Dookchitra, former VP of People and Culture at Leapsome

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The saying “people leave managers, not companies” exists for a reason. Research backs that up: there’s a strong correlation between manager effectiveness and how employees feel about their role in the company, according to SHRM. 

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Adding management-specific training strategies, like leadership skill training or enforcing more consistent feedback practices, is an easy way to make a difference in attrition scores. 

<h3>Strengthen employee engagement and development</h3>

“Disengaged employees who stay quietly can drain a company faster than those who leave. Engagement isn’t about who stays, it’s about who contributes with energy and ownership.” 

— Emma Leeds, Founder and CEO of People Function

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If you can create an environment where employees see a future for themselves, including internal mobility opportunities and ongoing learning initiatives, there’s more reasons for them to stay and contribute. 

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As SHRM noted in their Employee Retention Technologies report, employees who believe they’ll have opportunities to grow and develop at their current organization are more likely to stick around and see it through.

<h3>Use workforce analytics proactively</h3>

A common mistake organizations make is reactively treating attrition rates after noticing a spike. By then, underlying issues have probably been in place for months — meaning there was a long window of opportunity you missed to shore up your internal capacity and institutional knowledge.

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Effective HR leaders take a proactive approach to attrition by using their people data to spot retention risks. Tracking multiple metrics, such as engagement scores, manager effectiveness, and tenure and promotion rates, helps you notice trends to build more impactful strategies.

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Leapsome makes minimizing attrition risk more manageable by bringing employee data into one HR platform. Performance reviews are a particularly valuable tool for identifying retention risks, and with Leapsome, you can store these valuable insights alongside data from past performance and peer reviews. With all this data in one place — as well as AI-powered recommendations — you can identify what’s working and teach managers how to craft the most effective reviews to promote retention.

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Caption: Leapsome’s Performance Review and Analytics tools make it easier to notice potential weak points before they turn into attrition.

Alt text: A Leapsome dashboard with a list of feedback requests and prior comments between management and an employee. 

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🚨 Take action on attrition risks from performance data

Use Leapsome’s Performance Reviews to keep employees motivated and monitor workforce trends before retention risks become resignation letters.

👉 Explore Performance Reviews

<h2>Improve workforce retention with Leapsome</h2>

Retention issues rarely arise overnight. The problem starts when companies can’t catch early warning signs because they’re still relying on fragmented systems for their employee data. Without clear, comprehensive visibility into predictive trends like engagement and performance, HR often winds up making knee-jerk reactions after employees have already walked out.

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The first step in any proactive attrition management program is linking all your employee data to a centralized source of truth. Leapsome’s HRIS and people management platform makes this a reality, connecting your latest engagement scores, performance reviews, and feedback with historical data and new trends. With this unified view into your operations, you’ll put your HR team in a stronger position to intercept retention risks and improve employee experiences before they leave.

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“Being able to view previous assessments and feedback, praise, and private notes directly while conducting an assessment review is crucial for reducing recall bias — and that’s what we’re all about. We want to do justice to our hardworking team and consider all of their strengths and weaknesses as accurately as possible when helping them mold their careers.” 

— Tara Todorovic, People Development Manager at SIDES

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👀Catch and slow attrition early 

Leapsome’s HRIS and people management tools help you identify engagement issues and respond quickly for stronger retention organization-wide.

👉 Request a demo

<h2>FAQ</h2> 

<h3>What causes workforce attrition?</h3> 

There usually isn’t a single factor behind workforce attrition, but common reasons overlap with causes of turnover: poor management practices, voluntary organizational restructuring, and high disengagement. However, the diverging point between attrition and turnover is whether the organization plans to refill the role, so situations that reduce headcount (like org restructures and hiring freezes) raise attrition rates.

<h3>What’s considered a high employee attrition rate?</h3>

Average attrition rates vary across sectors, so check relevant industry benchmarks to compare with your current levels. Anything above these industrywide averages, or a consistently rising attrition rate, should serve as a red flag. According to Mercer’s 2025 report, retail has the highest attrition rate in the U.S. at 26.7%, and insurance had the lowest at 8.2%, for example.

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