What is Attrition Rate and How to Calculate it Easily

1. What is Attrition Rate and How to Calculate it Easily? Are you facing employee turnover issues recently and thinking about how to solve this problem? First of all, it is a common problem we all face for days, but there are unique ways to resolve them. Have you heard of checking the workplace attrition rate? Is it balanced or do you have to do some work on it? Checking the employee attrition rate is mandatory. If the rate of staff turnover is detected as high, then you need to bring some changes immediately. Else, productivity and company growth are affected. In this blog, we are talking about what employee attrition is, how you calculate the employee attrition rate, the benefits of understanding the attrition rate, and more.

2. What is the Attrition Rate? Attrition rate is a measuring tool that identifies the ratio of employees who resign from organisations voluntarily or involuntarily. It also represents the percentage of loyal customers of which employee leaves the company. It is a key indicator that calculates the pace at which people leave a company. It measures how many people or employees leave, voluntarily or involuntarily. Additionally, it helps track average employment duration, and competitive compensation, detects the cost of requirements, training, and exit interview, and maintains customer base and marketing. HRs can measure the attrition rate monthly, quarterly or annually to monitor progress. With a clarified attrition rate, an organization can figure out how things are going at a company. It provides a clear image of the company’s ultimate growth and productivity. What is Customer Attrition Rate? The customer attrition rate, also known as the customer churn rate, is a ratio that is used to measure the percentage of customers who stop doing business with a company during a certain time. Losing customers haphazardly is a kind of horrifying thing for upbringing a company’s productivity. It is expensive as it cost more to deal with new customers than to retain existing ones. It also creates a business graph with long-lasting employees. What is the Employee Attrition Rate? The employee attrition rate, also known as the employee turnover rate, is a metric used to measure the percentage of employees who leave a company during a certain period. It is an important metric for businesses to monitor because high employee turnover can be costly in terms of recruitment, training, and lost productivity.

3. How do you Calculate the Attrition Rate Using the Attrition Rate Formula? To calculate the annual employee attrition rate, You can put the number of attrition divided by the average number of employees and then just multiply the number by 100. Here is the formula, Attrition rate= No. of attrition/Average no. of employees * 100 But there is confusion that how to measure the number of employees’ attrition or how to calculate the attrition rate specifically. Let’s discuss this in detail. ▸Attrition Number Formula, and Calculations Let’s take an example of the attrition rate formula and how to calculate the attrition rate. Suppose you have 200 employees at the beginning of 2023, and you like to calculate the attrition rate yearly. Then you have to collect the number of employees who leave. Let’s take the number as 10 and 16 employees are hired. For calculating the attribution rate for the year 2023, first, you need to subtract the left employee number (10) from the overall number (200) then add the number of hired ones(16). 200 – 10 = 190 180 + 16 = 196 Then, add the number of employees at the start of the period to the total: 200 + 196 = 396 For the average, you have to divide the number (396) by 2 396 / 2 = 198

4. ▸Attrition Rate Calculation The number of employees who left/ The employee average arrival (10 / 198 = 0.0505) Finally, multiply the decimal by 100 to get the rate of attrition in percentage: 0.0505 x 100 = 5.05% Difference between Attrition Rate, Retention Rate and Employee Turnover Often people get confused between attrition and employee retention or attrition and turnover. But in general, all three are different meanings. Let’s discuss it in detail. ▸Attrition vs. Retention If you confuse the attrition rate and the retention rate. Here are the details. The retention rate measures the percentage of people who stay in a company for a specific long period. And the attrition rate measures the percentage of employees who leave the company. It is exactly the opposite of attrition metrics. ▸Attrition vs. Turnover There is a slight difference between the attrition and turnover rate. Even often people confuse two terms. Attrition is a long-term and calculative concept. It mainly thinks about deeper for the organizational problem and creates a ratio of employees who left and the number of new employees who joined and calculates the company’s productivity. Both voluntary and involuntary employees are included in the attrition rate.

5. In the case of processing the turnover, only voluntary employees are chosen for the calculations. It is mainly a slight short-term process which focuses on the timely replacement of the resigned employees. Read the Full Article: https://www.pockethrms.com/blog/attrition-rate/