Understanding Annual Attrition Rate: How Is It Calculated and Why Does It Matter?

Dear Folks,

Today, as I calculated the monthly employee attrition, we got it as 11%. However, my seniors said it's too high as the annual attrition rate is usually calculated differently. Could you please explain how the annual attrition rate is calculated and its significance? I usually calculate monthly employee attrition as (number of employees resigned / existing employees on roll) * 100. But I am unsure about the calculation and importance of the annual attrition rate.

An early reply is greatly appreciated.

Regards,
Raul

Dear Raul,

Attrition rate (Annual) = (No. of employees left in the year / Average number of employees in the year) * 100.

Average number of employees = (Opening Head Count + Closing Head Count) / 2.

Hope this resolves your query.

Thank you.

Hi,

Please find the formula for the calculation of Attrition Rate:

Attrition Rate = (Number of Attritions * 100) / (Actual Employees + New Joinees) / 100

Closing Head Count = Opening Balance + New Joinees - Separations

Opening Balance = Last month's closing balance

Annual Attrition Rate: Average of all months' monthly Attrition %

Thank you.