EFFECT OF SELECTION PROCESS ON LABOUR TURNOVER AND ATTRITION RATE IN SERVICE INDUSTRY

Abstract

A common attrition rate definition refers to employee or staff turnover, but in a broader sense, attrition rate is a calculation of the number of individuals or items that vacate or move out of a larger, collective group over a specified time frame. Attrition rate is also commonly referred to as churn rate. A term often used by human resources professionals to determine a company’s ability to retain employees, attrition rate is increasingly used in the marketing world as a figure that points to the company’s ability to retain customers or to project the number of new sales necessary to maintain the status quo, accounting for customer churn or customer attrition. Customer attrition occurs when customers break ties with an organization. Churned customers do not interact with or purchase from a company after a given period of time. As customer retention becomes a valuable metric (and valuable to the bottom line), it is in companies’ best interests to reduce customer attrition rate.