Confused About Calculating Attrition Rate? Seniors, Share Your Insights Here

Hello Seniors, I am starting this thread out of confusion, as I went through a lot of posts on attrition rate calculation. I am following the below formula to calculate the attrition rate annually:

Attrition Rate Formula

Attrition rate = (number of employees left during the year) / (total number of employees at the beginning of the year + total number of employees recruited during the year) * 100

I would request all seniors to share their views.

Regards,
AS

If you had the optimum number of employees at the beginning of the year and if no employees left during the year, in all probability you would not have recruited any more during the year. So recruitment during the year should not form part of attrition calculation. Recruitment is simply a result or consequence of either initial deficiency or attrition. By itself, attrition is simply the number who leave.

Understanding Attrition

In my opinion, attrition is the number of employees who leave during the year as against the number held at the beginning of the year, expressed as a percentage. It should be: Number of employees who leave during the year (say 10) / Number of employees at the beginning of the year (say 80) * 100 = 10 / 80 * 100 = 12.5. Hence, the attrition during the year has been 12.5%.

QED

Good luck.

Regards,
Colonel Gahlot
'TRURECRUIT'

Understanding Attrition Calculation

There are various ways to look at attrition. A generic approach is the count of staff who left during the year divided by the sum of the count of staff at the beginning and the count of staff at the end, all divided by 2. This calculation may exclude those who are separated due to retirement or death, especially if we are assessing attrition in the context of employee engagement. Generally, excluding these cases will not significantly impact the percentage.

For a better understanding, you may further analyze the percentage of staff who left among those with less than 1 year of service, less than 2 years of service, etc., for a more comprehensive analysis.

Please find attached the formula to calculate the attrition rate. I hope this will help you and clear your doubts.

Thank you.

Your formula is correct; however, you need to modify it a bit.

Attrition Rate Calculation

Attrition rate = number of employees separated during the given period DIVIDED BY Average number of employees during the given period MULTIPLIED BY 100.

Average Number of Employees

Average number of employees = Number of employees at the beginning of the period PLUS Number of employees at the end of the period DIVIDED BY Two.

Kindly note that the attrition calculation need not be a yearly calculation. It can also be monthly, quarterly, and half-yearly.