Why Does My Company's Yearly Attrition Rate Seem So High Compared to Monthly?

Hi friends,

Thanks for telling me how to calculate attrition rate. One more problem is there. When I am finding my company's attrition rate month-wise, it is coming very low. However, when I calculate it for the whole year at once, it appears very high. I am puzzled by this discrepancy. Is there any other formula to calculate the attrition rate for the whole year? Please help me with this.

Thanks and Regards,
Wricha

Hi,

Formula for Attrition Rate:

ATTRITION RATE

The formula and correct logic behind the calculation of the ATTRITION RATE are as follows:

((Number of attritions x 100) / (Actual Employees + New Joined)) / 100.

Thanks,
dsv

Assuming the rate of people leaving is the same throughout the year, the attrition rate for one month only will be one twelfth (1/12) that for a whole year.

For example, if one person leaves in one month out of 20 employees, the attrition rate for the month is 1/20 or 5%. If one person leaves per month for twelve months (and assuming each is immediately replaced), the attrition rate for the year is 12/20 or 60%.

My annual calculation is based on Total Employees = Average number of employees over twelve months. Formulas vary, but the basic idea is the same. You expect the attrition rate for one month to be a fraction of the yearly amount. Hope this helps.

Vicki Heath
http://www.businessperform.com

Hi, Wricha,

The attrition rate formula we follow in our organization is as given below:

Attrition Rate: Number of Resigned / Strength at the beginning of the month + Number Recruited * 100

Regards,
JR Kumar

Hi Wricha,

Attrition rate % = (Number of people who moved out of the organization during the period / Total number of people in the organization during the period) * 100. The period refers to the attrition rate you are trying to calculate. If you are calculating monthly attrition, provide the figures for the particular month. This way, you will be able to calculate the attrition rate for monthly, quarterly, yearly, or any period you want to analyze.

I would also appreciate it if someone could clarify the formula provided by J R Kumar. What is the necessity of including the number of recruits? If the recruitments conducted during the period are accounted for and assuming there are no plans to increase manpower, then according to Kumar's formula, the attrition rate would be zero. Can someone shed light on this?

Thank you.

Hello,

Can someone help me understand what's the ideal attrition rate where the organization must start taking required measures?

Regards,
Twinkle

Hi Wricha,

I recently conducted a study on attrition rates in the IT and ITES companies. The most commonly used formula that I found was as follows:
Attrition rate = (number of employees who left the organization / average number of employees during that period) * 100.

For instance, if you are calculating the attrition rate for the past year, i.e., 2005, and the employee strength for the year 2004 was 150 and that in the year 2005 was 200, with 25 employees leaving, then the average number of employees will be:
(150 + 200) / 2 = 175.
Therefore, the attrition rate = (25 / 175) * 100 = 14.28%.

To read expert opinions on attrition rates, visit [Financial Express](http://financialexpress.com).

Regards,
Shailja

Hi Friends,

Nice brainstorming on calculating the attrition rates. But how do we then justify attrition rates of 100% or more? For example, what does an attrition rate of 120% signify as per the given formulae?

Dheeraj

Hi,

I have newly joined CiteHR. Can someone help me out in how exactly to go about calculating the attrition rate and whether attrition cost is linked to obtaining the attrition rate? If not, what is the method of calculating the attrition cost? I hope to get a positive response to this.

Thank you and regards,
Jenny

Hi Wricha,

You can follow this formula for calculating the attrition rate:

The standard formula used for calculating the attrition rate is:
Attrition Rate = (Number of employee separations - involuntary separations) * 100 / average employee count

For example, the average employee count can be calculated as follows:
Average employee count = (January month strength + December month strength) / 2

Thank you,
Basant

Hi all,

I am a new user of citehr. I am trying to find out about the effects of attrition:

1. High operational costs.
2. Increase in workload.
3. Productivity.
4. Demotivation.

Please help me find some more effects of attrition.

Thank you,
Quinn

Sorry for posting an unfinished message earlier. Please check the link below; it might shed some light on the varying but interesting perspectives regarding attrition.

http://iamidiotsavant.blogspot.com/2...attrition.html

The author is a former colleague and may be considered a subject matter expert on the topic.

Also, a probable answer to the question you posed about, for example, 120% attrition is, to quote:

"annualized attrition and multiplying a percentage by 12."

I got uneasy about multiplying a number converted to a percentage by any number when using an annualized formula. Why? Because it skews the actual value of the measurement. Take Formula 4, for example. COPC uses this formula. Let's say you had 100 people who left this year. Your total headcount this year is 300. By using Formula 4, you will yield an annualized attrition rate of 400%. 400%! It's mathematically unsound. It implies you lost 100% of your employees and 300% of those you never even hired in the first place. Let's assume it is mathematically valid. With this, it actually means that we replaced all our original employees 4 times over.

I stand corrected, though :)