Understanding Monthly Attrition Rate: Do We Count Employees Still in Their Notice Period?

Clarification on Attrition Rate Calculation:

When calculating the monthly attrition rate, it is crucial to define the term "resigned employee" accurately. In the context of attrition rate calculation, a resigned employee generally refers to an individual who has completed the Last Working Day (LWD) and has been officially separated from the company. Employees who have resigned but are still serving their notice period are typically not considered as resigned for the purpose of calculating attrition rate.

Practical Considerations:

- To calculate the attrition rate accurately, focus on employees who have completed their LWD and left the organization during the specified month.
- Employees serving notice periods are still part of the active workforce until their official separation date, and their resignations should be accounted for in the subsequent month's calculations.

Step-by-Step Guide:

1. Identify employees who have completed their LWD and officially left the organization during the month under consideration.
2. Exclude employees who have resigned but are still serving their notice period from the total number of resigned employees for the month.
3. Calculate the attrition rate using the formula: {Total number of resigned employees during the month / (open headcount in a month + new joiners in the current month) } * 100.
4. Ensure that only employees who have completed their LWD and are no longer part of the company are included in the numerator of the attrition rate calculation.

🔍 It is essential to distinguish between employees who have officially separated from the company and those who are still serving their notice period to accurately calculate the attrition rate and derive meaningful insights into workforce turnover.