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Attrition Rate Calculation for Employees

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  • #23649

    Samuel
    Member

    We are trying to calculate the attrition rate versus retention rate in my project and for my company. I have seen a variation in a way attrition is calculated both inside my company and outside (on the net, for instance). Can somebody help me as to which is the right way of calculating? How are you calculating it? Thanks for your thoughts.Has anyone put a Sigma value on this yet for their company?

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    #56539

    Tajjammul Hussain
    Member

    Samuel,
    The following calculations though not used in all the organisation but is used in most and considered as a good indicator of attririon.
    The first of the 2 attrion metrics are pretty clear but the last one (Annualised Overall Attrition ) helps us understand not only the external attrition but also the employee turnover and movement within the organisation.
    Hope this helps…
    Month Start Head Count -A
    Employees Added -B
    Employes Promoted -C
    Lateral Movements of Employees-D
    Voluntary Attrition – E
    Involuntart Attrition -F
    Month End Head Count -G
    Average Head Count = (A+G)/2 –> I
    Attrition Metrics :
    Annualised Voluntary Attrition = (E/I)*100*12
    Annualised Involuntary Attrition = (F/I)*100*12
    Annualised Overall Attrition = (C+D+E+F)/I*100*12
     
    Regards,
    Hussain.

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    #56567

    Angel
    Participant

    On the Annualized Overall Attrition Calculation, it does not include B as part of the formula.  Is this correct or was it left out by accident?  Should it be included before the C+D+E+F (i.e. B+C+D+E+F)/I*100*12?
     
    Thanks for your reply.

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    #56569

    Tajjammul Hussain
    Member

    Angel,
    B is Employess Added or New Joiners in that Time Period, so it will not be a part of Overall Attrition calculation.
    Regards,
    Hussain
     

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    #56570

    Angel
    Participant

    Thanks for your quick reply.

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    #56997

    Bhavika
    Participant

    hi,
    i went through your mail regarding the calculation of attrition rate dated 2nd feb 2005.
    i am into a project on attrition analysis and hence would like to know as to what do u mean by Annualized voluntary attrition & Annualized involuntary attrition when we are calculating the attrition rates month wise..
    looking forward to your reply
    thanking you
    bhavika 

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    #57159

    M
    Participant

    Hi
    Attrition %=(No. of attrites/average staff for the month)*(365/30)
    is how you caN CALCULATE ATTRITION

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    #57160

    Attrition
    Participant

    Hi Kavitha,
    Can you be a little more clear on that Please and also would define those terms.
    No I am assuming this will be true only for permanent employees?
    Thank you!
    Ram

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    #57449

    Amirtharaj H
    Participant

    Hi,
    In your calculation you added the promoted employees as an attrition count. I have doubt about promoted employees. can you clary this.
    Thanks
    Amirtharaj
     
     

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    #57450

    Tajjammul Hussain
    Member

    Hi Amirtharaj,
    The lateral movements and promotions have been included in the Overall Attrition and the reason is that every instance of promotion/lateral movements(internal attrition) creates a vacancy at that level, which in turn requires effort either from operations /hr to fullfill the same.
    The whole purpose of the overal metric is give an indication of the churn/turnover be it internal or external, that is prevailing in the organization.
    If we look at the same metric by splitting internal and external attrition, we could also say that to some extent, internal attrition is an indicator of the quality of talent pool and the career progression process for an organization.
    Similarly, one could argue that external attrition is also good to an organizations to some extent, since it provides an oppurtunity to bring fresh minds and ideas into the organization
    Most organization typically tend to calculate the external attrition rate, which is OK, from a reporting point of view, but not complete from an effort required to backfill those positions -point of view
    Attrition Metrics :
    Annualised Overall Attrition = (C+D+E+F)/I*100*12
    Annualised Overall Attrition -Internal = (C+D/I)*100*12
    Annualised Overall Attrition-External = (E+F/I)*100*12
    Please note that, attrition calculation do not have a standard formula and different organizations calculate differently to suit there requirements.
    Hope, I answered your question..
    For any further clarifications, please revert
    Regards,
    Tajjammul Hussain
     

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    #57565

    barsix
    Participant

    Can you tell me where the number 30 originates from in your calculation?
     
    Regards
     
    Barsix

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