Recruitment

The Law of Attrition – An Overview

4 Mins read

The law of attrition is a phrase that defines the rate at which an object or person will wear out over time. It states that every system deteriorates eventually, at a rate based on the combined additive effects of many small causes. The Law of Attrition applies to everything, even mechanical objects like cars and machines. In this article, we will focus on the business aspect for this law, particularly about employees.

Attrition Curve 

Attrition Curve

There are many factors at play in the Law of Attrition. The curve is based on a number of different variables. These include any benefit an employee gets from working with your company, how long it takes you to realize that person is not working out, and whether you have a meaningful promotional path for employees to move up in the company. The Law of Attrition states that attrition rates will rise when people feel they have hit a glass ceiling in their career or have stalled in their job advancement opportunities. 

The Law of Attrition can apply to any person with whom you interact including customers and clients as well as employees. It means that every relationship has the potential to ebb and flow over time and that the Law of Attrition is always working to bring things to a natural end.

Attrition Vs Turnover 

The Law of Attrition is not the same as turnover, though it can apply to a workforce with high rates of employee turnover. Turnover means there are employees leaving your company, while attrition means you have people who leave and don’t come back. You will notice this difference when looking at your records for hiring vs. the number of people who leave your company over time. Your attrition rate tells you how many people left without coming back, while your turnover rate gives you the total number of employees who changed positions over time (whether they left voluntarily or were required to do so).

Attrition Rate Formula

Attrition Rate Formula

The Law of Attrition is a formula that can help you calculate your attrition rate. Add up the number of employees who have left your company over a set time period, then divide that number by your total workforce at the beginning of that span. This will give you the percentage of people who have left, over this period of time. For example, if you lose six employees in one year and there are only ten employees, to begin with, sixty percent have left over a period of twelve months (6 / 10 x 100 = 60%). 

Law Of Attrition Advantages 

There are many advantages associated with observing the Law of Attrition in your business or workplace. It helps you prepare for turnover as well as plan for retirement years when older staff members may consider leaving for new or better opportunities. It drags up issues related to company morale and investment in the workforce. Attrition can cause clients to leave, too, though its effects are mostly internal.

In some cases, managers will see that the Law of Attrition is dragging their department or entire company down. In that case, you can adjust your policies and practices to make a more engaging workplace with a greater focus on career advancement and reward programs. This might be particularly useful if you have a high rate of turnover due to employee dissatisfaction or frustration with your management strategies. 

Law Of Attrition Disadvantages 

The Law of Attrition also has consequences for companies who do not get ahead of this problem. It suggests that failing to invest in talent and not developing employee skills is a major mistake. If turnover is too high in your company, then your investment in people will be lost, and the Law of Attrition will begin to affect how clients perceive you 

One of the biggest disadvantages of this Law is that it creates an impression that your company does not care about its employees or what they do. It can also send a message to employees in other departments that your business depends on a revolving set of personnel with no real connection or long-term loyalty to their jobs or duties. This makes it difficult for any one person to make a difference in the overall mission and purpose of your company because everyone knows there always going to be another employee coming along soon enough who fills his or her shoes. 

How relevant can the Law of Attrition be today?

Law of Attrition

The Law of Attrition is still relevant despite the effects of globalization and technology on the workforce. It reminds managers that regardless of where or how your employees are sourced, they have a limited lifespan with your company which means you need to plan ahead for new talent and resources all the time. The Law applies particularly to small businesses that may not be able to afford high turnover rates. They should focus on building a workforce of people who believe in their mission and vision, want to contribute for the long term, and can feel confident about investing their careers within this organization. You don’t want to ignore the Law of Attrition because it helps keep everyone focused on remaining competitive in their field which will help sustain success over time. 

Conclusion

The Law of Attrition can help you avoid a situation where you have an unsustainable workforce. The Law reminds managers to plan ahead for new talent and resources or face the consequences if their bottom line begins to suffer because your organization does not re-invest in its employees. This leads to staff who are dissatisfied with their jobs and clients who go elsewhere due to the reputation of companies that take advantage of this Law. The Law is applicable today, particularly to small businesses that may not be able to afford high turnover rates and should focus on building a workforce of people who believe in their mission and vision, want to contribute for the long term, and can feel confident about investing their careers within this organization.

Further Reading

HR Value Chain Model

Horizontal Job Loading

HRIS Requirements Checklist

Funny Employee Awards

Leadership Credo

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