Struggling to Find a Reliable Attrition Rate Formula? Let's Discuss Your Options

Hi, I am working with a software firm. I need an attrition rate formula that provides a reliable figure. There are many on the web, but it's a little confusing which one to choose. So please help me out with this.

Thanks & Regards, Aditi

Welcome to citehr.com.

For a small software firm, if it's totally dependent more on intellectual wealth, then the attrition rate makes a significant impact. But for a skill-based wealth, up to a certain level, it may not make much difference. Simply keep a log of employees leaving and coming with experience level bands and calculate the percentage.

If you are asking about BPO, then a BPO professional can help on this forum.

Hi Anuj,

Thank you for the reply, but in order to calculate the percentage, I require a standard formula. I cannot simply take the numbers and determine the percentage; we need to present this data to our Board of Directors. If you have any information on this, please let me know.

Regards,
Aditi

Hi Aditi,

Am attaching the excel sheet for as a ready reckoner for the calculation of Attrition rate.

Yes, you are right that there are many formulaes available and the question arises which ones to use? well , i suggest take the one which best fits your organization and simple formula to be used is :-

Total Number of Resigns per month (Whether voluntary or forced) divided by (Total Number of employees at the beginning of the month plus total number of new joinees minus total number of resignations) multiplied by 100.

Attrition rate by itself doesn't reveal much or is rather ham handed when this topic is raised in the Management meetings. The attrition rate to be meaningful has to be analyzed well from different perspectives

Suggest that you further break up the data pertaining to attrition rate in the following manner:-

• Experienced professionals with particular proficiency like Java or C++,

• Number of people who served for x years,

• Retirement

• Forced attrition rate – people who have been asked to leave for non-performance.

• Joining competitors- further can be broken into two categories viz C&B and areas/new technologies or platforms working on

• Attrition rate department wise or city wise

If you wish to know more attrition rate & find ways to contain it – then I suggest refer the website link on a seminar for the same. naukri.com - 32k

Hope this is of help to you.

Cheerio

Rajat

For the plain basic starting, it's going to be the formula and can be modified considering statistical points of view.

Oh, again mathematics for HR personnel... but good to impress your boss and ask for a salary increment.

Dear Rajat,

I have gone through this formula, but it does not match the narration given in the paragraph. The formula varies between the first row and the rest of the rows. Please kindly check and explain.

Thanks and regards,
Antony.

Note: According to the statement, the formula is as follows:
Formula: (Number of Resignations per month / Number of total employees at the beginning of the month - total number of new comers - total number of resignations) * 100

The calculation is basically okay for calculating monthly attrition. However, attrition is always measured on an annual basis. To do this, you need to consider the total number of employees at the beginning and end of the year and calculate the average manpower count. The attrition rate should be measured against this.

Ensure there is a single line break between paragraphs.

Dear Rajat,

The formula does not match the statement you have provided, and the formula in the first row does not match the rest of the rows. Please refer to the attachment of the attrition rate formula and assist me in applying the same for my company.

Regards,
Antony.

Hi Rajat,

I have seen the Excel sheet you sent calculating the attrition. It is very informative. However, I could not comprehend the first row, which shows that the Attrition % in Jan = [(Employees left * 100)/(Opening balance + No. Of employees joined + Employees left + Closing Balance)]/100. The subsequent formulae do not include the Employees Left and Closing Balance. Is there any rationale in this? Please educate me on this.

Pavan

Thank you, Rajat.

For others, the formula is: (Total number of separations in the month divided by Average Number of Employees During the Month) multiplied by 100. Here, the Average number of employees means: (Number of People at the beginning of the month + Number of people at the end of the month) divided by 2. I hope this will help.

Regards, Sanjeev Sharma (blog: http://sanjeevhimachali.blogspot.com/)

Well, these formulas seem to be correct, but I still have a doubt in my mind. Why don't they take into account factors like employee experience? In industries like BPO and KPO, it's the freshers who leave the firm more frequently than experienced ones. So, how does experience affect attrition?

Hi,

You will notice that attrition, if calculated each month based on the employees on the roll for that month, will be misleading. We need to report it on an annualized basis. Then the data becomes meaningful, as you can interpret it and take corrective actions. I agree with other comments on granularity such as skill, geography, experience, and reasons - some of the attributes for which you need to map the attrition.

Cheers,
Bala

Dear Friends,

I have one doubt when it comes to attrition: do we need to consider the opening balance of a month, the closing balance, or both to calculate the attrition rate? Can anyone clarify for me?

Regards,
Amith R.

Hi Rajat,

I tried using the Excel sheet you posted to calculate attrition, but there seems to be a formula change in H7 and the rest of the attrition rate column. Can you please help me in sorting this out?

Regards,
Pallavi
[prabhu.pallavi@gmail.com]

Hi Rajat,

Thanks for the information, but I'm really confused. You have written the formula for attrition as follows:
Total Number of Resigns per month (whether voluntary or forced) divided by (Total Number of employees at the beginning of the month plus total number of new joinees minus total number of resignations) multiplied by 100.

However, the formula you are using in the attached Excel sheet is totally different:
((F7*100)/(D7+E7+F7+G7))/100

Please correct me if I'm wrong. Please email me at ankurnamdeo@gmail.com if possible.

Thank you.

No. of Employees Left during the Year*100 / Employees on Record at the Beginning of the Year + No. of Employees Joined during the Year + No. of Employees Left during the Year + Employees on Record at the end of Year / 100

-C.Kums

Hey guys, can you please explain to me what the opening balance is in the Excel sheet for attrition rate?

Hi,

Having looked at the formula, I'm not sure I understand why you'd multiply the number of leavers x 100 in the first part of the formula. Can someone please explain the logic of the formula to me as I can't get my head around this particular formula that was supplied, i.e. =((F6*100)/(D6+E6+F6+G6))/100 where F6= no. of leavers; D6= opening balance; E6= no. of joiners; G6= closing balance.

Many thanks,
Sandra

Hello everyone, I received a really good questionnaire from here. Now, please help me to find out the different dimensions which I need to correlate with attrition in order to achieve good results.