Attrition Rate

Attrition rate is calculated as the number of employees who leave over a period divided by the average headcount for that period, typically expressed as an annualized percentage. In offshore engineering markets it functions as both a quality signal (a hiring partner with lower attrition is vetting and retaining talent well) and a hidden cost line, since every departure resets ramp-up time on client work. India's broader IT services industry attrition eased to 14.6% in NASSCOM's Quarterly Industry Review for March 2026, continuing a multi-year decline from pandemic-era peaks; India-based Global Capability Centers report a similar 12-15% range across center sizes (Zinnov, 2026).

Attrition is expensive wherever it happens. SHRM estimates that replacing an employee costs 50% to 200% of their annual salary once recruiting, interviewing, onboarding, and the productivity gap during ramp-up are counted, with costs climbing to 200-250% of salary for managerial and specialist roles. For a US company running a dedicated offshore team, this is why vetting rigor and retention practices at the offshore partner matter as much as the hourly rate quoted at signing - a lower attrition rate compounds into lower total cost of workforce over the life of an engagement.