March 4, 2024

How to Calculate Attrition Rate: The rate at which employees quit your organization voluntarily is referred to as your company’s attrition rate. The staff turnover rate or “churn” rate is another term for the attrition rate. Read on!

How to Calculate Attrition RateIf your organization has a high attrition rate, it may be costly to replace personnel on a regular basis.

Customers may also perceive a reduction in the value of your product or service as a result of a reduced workforce or a loss of morale or motivation among existing personnel.

This damage to your brand may have a negative influence on your bottom line.

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What is the Attrition Rate?

Employee attrition is defined as a decrease in the workforce caused by retirement or resignation with no plans to replenish or replace the empty job position.

Outside of the HR context, the phrase attrition alludes to a loss of strength or a weakening, which is likely why the term has a negative connotation, even when a reduction in employees can result in beneficial outcomes.

Attrition can be costly unless they appropriately prepare your organization for employees who intend to resign or retire.

Your organization may suffer a loss of productivity, especially if the retiring employee is the only, or one of only a few, employees who are experienced with that role.

In addition to decreased productivity, you risk losing institutional knowledge.‍

Employees who have been with the firm for a long time understand how it functions and are familiar with its objective, as well as its ethics and beliefs.

Because they are exceptionally informed about corporate rules, practices, and objectives, they are likely to be involved in training new employees.‍

How to Calculate Attrition Rate | Using an Attrition Formula

Below are the ways to calculate the attrition rate:

Attrition Rate Formula in HR

Calculate your employee attrition rate by dividing the number of full-time employees who have departed per month (called “separations”) by the average number of employees and multiplying that value by 100.

To summarise, attrition rate = (number of separations / average number of employees) x 100.

What are the many sorts of Attrition Rates?‍

Voluntary Attrition:

Voluntary attrition is the type of attrition rate that occurs when an employee decides to leave on their own. It could be for a variety of reasons, including:

  • Personal reasons – Resuming studies, personal or structural changes within the company
  • Professional considerations – Unhappiness with current employer
  • Internal Attrition – Changing teams/departments inside the organization in search of a better talent fit.
  • Demographic-specific attrition – When a certain population, such as the elderly, or a specific gender, race, or ethnicity, leaves in overwhelming numbers.

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Involuntary Attrition:

Involuntary attrition is the sort of attrition rate that occurs when an employee retires or is terminated:

  • Retiring.
  • Employee dismissal or firing
  • Employee death

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