Understanding and Calculating Attrition Rates in Organizations

Dear All,

What is the formula for calculating the Attrition Report?

Regards,
Sree

Formula for attrition is supported here by giving a suitable example:

Number of Head Counts in a month start: 100
Number of additions in a month: 50
Attrition: 20
Closing Head Counts at the end of the month: 100 + 50 - 20 = 130
Formula for calculation of attrition is: 20 * 100 / 130 = 15.38%

Regards,
Moina

Attrition in an organization means the number of resignations in a particular month or year, or it refers to the number of employees who leave an organization.

Formula for attrition:

Number of people leaving the organization during the period X 100 average headcount or Attrition % = (No. of separations/Total employees) * 100

Dear Sree,

The formula for Attrition is as follows:
Total manpower during the month / Total manpower at the end of the month * 100

Regards,

Let's understand why we need to calculate Attrition %:

Attrition % is a measure of lost productivity due to attrition, i.e., employees leaving the organization. Therefore, Attrition % = Number of Employees Left / (Average Employee HC for that period). Average Employee HC = (Opening HC + Closing HC) / 2.

Hi Sree & Friends,

Please find the attachment as required by Sree.

Thanks,
Lawrence K
9789063375

I would still recommend using Average HC as the denominator in the attrition equation as it is a more accurate measure of the average productivity available throughout the month.

Hi Lawrence, I'm Richa. I guess the Excel sheet that you have attached with your post does not have the correct calculations as it does not consider the correct closing headcount, i.e., it does not account for the new employees who join. Therefore, the closing headcount figure is incorrect, leading to an inaccurate attrition rate calculation.

Calculation of Attrition Rate

The logical approach for calculating attrition.

Remarks: Typically, this method is more oriented towards the HR aspect. Recruiters do not necessarily use this method, although it is a good indicator. Additionally, this method does not provide the attrition numbers specifically from the recruitment viewpoint.

Opening Balance: OB

Resignations: R

New Joinings: NJ

ATTRITION % = [(R) / (OB + NJ)] * 100

Now, for example:

Opening Balance: 197

Resignations: 22

New Joinings: 36

ATTRITION % = [(22) / (197 + 36)] * 100 = [22 / 233] * 100 = 9.44%

To check the formula, in the above example, the opening balance is 197 and new joinings are 36. Hence, the total onboard strength is 197 + 36 = 233. If the attrition rate is at 9.44%, then 9.44% of 233 (which is the onboard strength) should give us the number of resignees, which is 233 * 9.44% = 22. In our example, we also took 22 resignations, proving that the formula is accurate.

Remarks: Internationally, this is a fairly acceptable formula. However, in my view, it fails to account for negative attrition.

Rameswar Prasad
HR