← Business Metric: Operational (all topics)
Employee attrition & utilisation
What it is
The rate at which employees leave, and the share of their available time that is billable or productive. In people-intensive businesses the two together determine both cost and delivery capability
High attrition raises recruitment and training cost while eroding client knowledge
Impact on industries
- Utilisation is a direct profit lever in services - a few percentage points move margin materially with no pricing change
- Attrition is expensive beyond replacement cost, since departing staff take client relationships and undocumented knowledge
- Pushing utilisation too high causes burnout and then attrition, so the two metrics work against each other past a point
- Some attrition is healthy, and a very low rate in a growing business can indicate weak performance management