Understanding Attrition: How Do You Calculate the Weighted Average and Attrition Rate?

Could someone tell me what is the calculation to find out the weighted attrition average for calculating the attrition rate.

Also, what is the formula widely used to calculate attrition rate?

Many employees leave the organization for various reasons. They could range from a boring workplace to a career switch. All of these factors contribute to a significant challenge for HR in hiring new talent. In this process, precious man-hours and costs are incurred. A higher attrition rate reflects a greater level of instability within the organization. Conversely, a lower attrition rate typically signifies higher employee retention due to satisfaction, showcasing HR's effective performance.

The general trend in calculating attrition rates involves measuring the speed at which employees are leaving a company. Attrition rate is computed by dividing the number of employees who have left the company within a specified period by the total number of employees present before their departure. Employee attrition rates can be calculated monthly or yearly.

Hi,

I hope this will clear out your doubts.

Attrition rate or turnover rate can be calculated on the basis of the following:

* It may be helpful to calculate your turnover rate and study trends in your ability to retain good employees. Turnover rate, calculated as a percentage, is determined by the following formula:

Number of employee separations for the period /
Number of employees at a fixed point during the period x 100

* The turnover rate can be further refined by removing unavoidable separations, such as death and retirement, from the calculation as in the following formula:

(Number of employee separations for the period - unavoidable separations) /
Number of employees at a fixed point during the period x 100

* Another measure of employees exiting your organization is the attrition rate. This can be calculated on how many persons hired in a particular year remain in following years. For example, if you hired 100 people in October 2003 and 80 were still employed in November of 2004, your survivor rate would be 80% and your attrition rate would be 20%.

The objective of examining your turnover rate is not to have the lowest number possible. You would not want to retain an employee who has proved ineffective, but rather to monitor the rate at which employees are leaving your organization as well as the reasons employees are leaving.

Tracking the reasons people leave is typically accomplished through an exit interview.

Hope that would be of use for you. If you have any other queries, feel free to contact. :)

Cheers,

Archna

Hi,

I hope this will clear out your doubts. Attrition rate or turnover rate can be calculated on the basis of the following:

- It may be helpful to calculate your turnover rate and study trends in your ability to retain good employees. Turnover rate, calculated as a percentage, is determined by the following formula: Number of employee separations for the period / Number of employees at a fixed point during the period x 100.

- The turnover rate can be further refined by removing unavoidable separations, such as death and retirement, from the calculation as in the following formula: (Number of employee separations for the period - unavoidable separations) / Number of employees at a fixed point during the period x 100.

- Another measure of employees exiting your organization is the attrition rate. This can be calculated on how many persons hired in a particular year remain in following years. For example, if you hired 100 people in October 2003 and 80 were still employed in November of 2004, your survivor rate would be 80% and your attrition rate would be 20%.

The objective of examining your turnover rate is not to have the lowest number possible. You would not want to retain an employee who has proved ineffective. Rather, it is to monitor the rate at which employees are leaving your organization as well as the reasons employees are leaving. Tracking the reasons people leave is typically accomplished through an exit interview.

Hope that would be of use for you. If you have any other queries, feel free to contact. :)

Cheers, Archna

Hi, the formula I am using is the number of resignations/average headcount*100. Is this the correct method? My boss now wants me to find out the weighted average. How is that calculated?

It's simple...

Position Salary no. of employees left
A 10 1
B 20 6
C 30 3

So, the weighted average would be: ((10x1) + (20x6) + (30x3)) / 3 = T. You can modify the above formula to get a better one, using Archana's formula.

Hi Archana,

Is there such a thing as a Weighted Average Attrition Rate? Is there a specific formula to calculate the weighted average attrition rate? The information you shared earlier provided a value but not a percentage for the attrition rate.

Regards,
Poonam Sonawane