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Attrition Rate Calculation

Attrition Rate Calculation

Through this Workspirited write up, we shall know how annualized attrition rate is calculated. Keep reading to understand things better.
Charlie S
There are many human resource professionals, who are struggling to find ways to deal with the increasing attrition rates in their organizations. With the economy of leading nations picking up, the number of job opportunities in such nations have increased. This has slowly and steadily compelled many young professionals to quit their jobs, and look for better paying jobs somewhere in these leading countries.

With the help of the below given formula, one can come to know how many customers or clients have left the company, or are dissatisfied with the services provided by the company. Along with calculating this 'dreaded by the HR dept' rate, let us also understand the factors that make people leave their jobs.

Calculating Attrition Rate

In order to calculate this rate, you need to know the exact number of people who have left the company, and then divide the same by the current headcount. Current headcount will be the sum of on-roll employees, plus the new joinees. By multiplying the answer of this fraction by hundred, you will be getting your attrition rate percentage.

For example, assume that a particular firm has 200 employees, and that 10 of them have left in a particular month. Then, the formula would be (10 / 200) * 100 = 5. So, the attrition rate for this company would be 5%.

Attrition Rate = [(No. of Attritions) / (Actual Employees + New Joinees)] x 100

Turnover rate calculation should be followed by calculating costs on recruiting and training new employees, to keep a tab on total expenses.

Factors Affecting Attrition Rate

Many people quit a particular job because of low salary. In fact, in a recent survey it was found that most people who switched jobs frequently did so, because they were not happy with the pay package offered to them. Lack of performance appraisals, and no incentives or bonuses can also be the reasons for leaving a particular job.

Lack of Job Satisfaction
Job satisfaction is what every one looks for in his/her job. Doing a job continuously, when one is not much interested in the work is very difficult, and this leads to people resigning from their jobs.

Not Getting Promotions
The post at which you work in your organization is also important apart from the salary, perks and other benefits. So, when employees expect promotions, but do not get them even after performing well, the discontent and frustration can lead to them leaving the job.

Discrimination in the Workplace
Discrimination in the place of work is one of the causes of employee turnover. When the work environment is not healthy and friendly, and when some people are neglected or insulted without reason, leaving the job remains the only way out for them. Discrimination related to gender, race and other things is a serious issue in today's corporate world.

Keeping the attrition rate under control is imperative for the progress and consistent growth of firms. This can be done by conducting regular team meetings to understand the needs of employees. Also things like salaries being offered by competitors, employee motivation, and innovative changes in the way an organization functions, should be considered.

Hopefully, this information will help you in the process of decision-making in your company. Wishing you success!