With skills shortages affecting almost every industry, retention is no longer just an HR priority — it’s a survival strategy. Each resignation carries more than a gap in the roster. It means the loss of expertise, disruption to team performance, and significant costs tied to hiring and training a replacement.
One of the most effective ways to get ahead of this challenge is by understanding your employee attrition rate. This figure shows how many staff leave within a set period and, when tracked closely, can reveal a lot about workplace culture, leadership quality, and job satisfaction.
Sentrient’s HR and compliance platform helps Australian businesses monitor attrition trends, uncover the reasons behind them, and put proven retention strategies in place. By combining powerful data insights with best-practice people management tools, we help organisations address issues before they lead to unnecessary departures.
What is Attrition Rate?
Put simply, attrition rate measures the pace at which employees leave the business — either through resignation, retirement, or redundancy. It’s shown as a percentage and is a key indicator of workplace stability.
It’s worth noting the difference between attrition, turnover, and retention. Attrition generally means the role is not immediately replaced, reducing the overall workforce size. Turnover focuses on how quickly departing employees are replaced. Retention measures how many people remain in the business over time. All three metrics matter, but attrition is especially useful for spotting deeper cultural or structural issues.
Attrition can be voluntary or involuntary. Sometimes it’s functional — where underperformers leave — but at other times it’s dysfunctional, meaning the business loses its top talent. Certain industries or teams may also experience higher attrition due to demographics, work type, or market conditions.
How to Calculate Attrition Rate
The standard calculation is:
Attrition Rate = (Number of Employees Who Left ÷ Average Number of Employees) × 100
For example, if you had an average of 200 employees over the year and 20 left, your annual attrition rate would be 10%. Breaking this down by quarter or department can highlight trends that might otherwise go unnoticed.
More advanced tracking can also separate voluntary from involuntary departures, identify how many new hires leave within their first year, and flag departments with higher-than-average rates.
Recognising the Warning Signs
A high attrition rate rarely happens in isolation. Often, there are red flags months before a resignation hits your desk.
Falling engagement scores, rising absenteeism, or noticeable drops in productivity can all signal deeper issues. Exit interviews, pulse surveys, and employee journey mapping are invaluable in catching these trends early. Technology like Sentrient’s analytics dashboard can bring all this data into one place, making it easier to see patterns and act on them quickly.
Why Employees Leave
Common causes include uncompetitive pay, limited career growth, poor leadership, or a workplace culture that undermines wellbeing.
In recent years, work-life balance has become a central driver of retention, especially with changes like Australia’s new right to disconnect laws. These rules set a legal framework for employees to refuse unreasonable work contact outside of hours. While not a total ban, they highlight the importance of reasonable boundaries — something that can directly influence whether people stay or leave.
Companies that actively respect these boundaries often see stronger engagement and lower attrition, while those that ignore them risk higher turnover and reputational damage.
The Cost of High Attrition
Replacing an employee can cost anywhere from half to double their annual salary when you factor in recruitment fees, onboarding, and lost productivity. Beyond the financial hit, there’s the knowledge gap left behind, the impact on team morale, and the strain on remaining staff.
Retention initiatives — such as manager training, career development programs, and flexible benefits — consistently deliver a positive return on investment. The key is to target the root causes of attrition rather than applying generic fixes.
Strategies for Retention
A strong employee value proposition (EVP) is a good starting point. This should reflect what your business genuinely offers beyond salary — opportunities for growth, flexibility, and a supportive culture.
Recruitment processes matter too. Hiring the right fit and offering a structured onboarding program can prevent early exits. Ongoing support, regular feedback, and leadership development all play a part in keeping people engaged.
Finally, using technology to track attrition, measure engagement, and act on feedback ensures your retention efforts are based on evidence, not guesswork.
Building a Retention Culture
Sustainable retention isn’t about one-off initiatives. It’s about leadership commitment, regular measurement, and adjusting strategies as workforce needs evolve.
With tools like Sentrient’s HR platform, Australian businesses can monitor attrition in real time, identify risks early, and build workplaces where people want to stay. In a market where skilled employees have more choices than ever, that can make all the difference.
Don’t wait until your best people hand in their notice. Create a retention strategy that respects employee boundaries, supports growth, and aligns with modern workplace expectations — including the right to disconnect.
This blog was originally published here: Right To Disconnect
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