What Is Attrition?
Attrition is the process of gradually reducing the size of a workforce through retirement, resignation, or dismissal of employees. It’s intended to allow a business to downsize without making sudden drastic cuts, and is usually associated with downsizing team members or reducing staff in order to save costs and remain competitive. As with any downsizing initiative, however, it can have significant organizational, psychological, and financial effects on remaining employees.

Shrinking Workforce
Attrition is a slow, natural process that can occur as a result of normal business operations. During times of slow growth or recession, companies may use attrition to reduce their overhead costs as an alternative to layoffs. Attrition allows a business to get smaller, but can be an expensive and unpredictable strategy that can have long-term effects on overall productivity and morale. Attrition may also negatively engage the customer, reducing customer loyalty and satisfaction.

Understanding the Benefits
The main benefit of using attrition to reduce the workforce is that it avoids the costs associated with layoffs, including severance pay, unemployment compensation and benefits, and outplacement services. Attrition also allows for natural performance management since it replaces experienced workers with newer, inexperienced recruits that require less overall wages. Retaining certain key employees is also easier when using attrition as a strategy since existing staff can be promoted rather than replaced.

Conclusion
Attrition can be an effective strategy for reducing workforce size while avoiding the costs associated with layoffs. However, it can be an expensive and uncertain process with potential long-term effects on remaining staff and customers. In order for a business to successfully use attrition to its advantage, it must have an informed and detailed understanding of the costs, processes, and risks associated with this strategy.