Plug the numbers into the following formula: Attrition Rate = Number of Attritions/Average Number of Employees *100. For example, suppose a telecommunications company had 150 employees as of April 1, 2015. During that month, 20 employees voluntarily left the company. Also, the company hired 25 new employees. First, calculate the average number of employees. The beginning number was 150. If 20 people left and 25 people were hired, then the ending number was 155. The average number of employees for that month can be calculated with the equation (150+155)/2=152. 5{\displaystyle (150+155)/2=152. 5}. Next calculate the monthly attrition rate. In this month, 20 people left, and the average number of employees was 152. 5. The monthly attrition rate can be calculated with the equation (20/152. 5)∗100=. 1311∗100=13. 11{\displaystyle (20/152. 5)100=. 1311100=13. 11} The attrition rate for April, 2015 was 13. 11 percent.
The beginning number of employees on April 1, 2015 was 150. Over the course of the quarter, 30 people left and 40 new employees were hired. Therefore, the ending number of employees on June 30, 2015 was 150−30+40=160. {\displaystyle 150-30+40=160. } The average number of employees for the quarter was (150+160)/2=155{\displaystyle (150+160)/2=155}. The attrition for the second quarter of 2015 was (30/155)∗100=19. 35{\displaystyle (30/155)*100=19. 35}, or 19. 35 percent.
Suppose the telecommunications company in the above example had a total of 62 attrition for the year. They typically hire 20 percent more employees for the last quarter of the year for their busy season. So, they have an average of 155 employees for the first three quarters, and an average of 186 employees for the last quarter. Knowing that there are four quarters in a year, you could calculate the weighted average with the formula ((155∗. 75)+(186∗. 25))=(116. 25+46. 5)=162. 75{\displaystyle ((155*. 75)+(186*. 25))=(116. 25+46. 5)=162. 75}. You could also use the number of weeks worked. There are 52 weeks in a year. In the first three quarters, there are 39 weeks, and in the last quarter there are 13 weeks. Use the formula ((155∗39)/52))+((186∗13)/52))=116. 25+46. 5=162. 75{\displaystyle ((15539)/52))+((18613)/52))=116. 25+46. 5=162. 75}. Finally, you could use the number of hours worked. In a year, there are 2080 work hours. In the first three quarters, there are 1,560 hours, and in the last quarter there are 520 hours. Use the formula ((155∗1,560)/2080))+((186∗520)/2080))=116. 25+46. 5=162. 75{\displaystyle ((1551,560)/2080))+((186520)/2080))=116. 25+46. 5=162. 75} The weighted average of employees for this company is 162. 75. Calculate the annual attrition rate with the formula (62/162. 75)∗100=38. 09{\displaystyle (62/162. 75)*100=38. 09}, or 38. 09 percent.
Use the formula Ra=1+Rc12/N−1∗100{\displaystyle R_{a}=1+R_{c}^{12/N}-1*100}. Ra{\displaystyle R_{a}} = annualized attrition rate Rc{\displaystyle R_{c}} = cumulative attrition rate N{\displaystyle N} = the number of time periods observed.
Calculate the cumulative attrition rate to date. The average number of employees was 2,048. 5 ((2,050+2,047)/2=2,048. 5{\displaystyle (2,050+2,047)/2=2,048. 5}). The cumulative attrition rate was 6. 1 percent ((125/2,047)∗100=6. 10{\displaystyle (125/2,047)100=6. 10}). Annualize the attrition rate. The cumulative attrition rate is 6. 1 percent and the number of time periods observed is 5 (January through May is five months). Ra=1+. 06112/5−1∗100{\displaystyle R_{a}=1+. 061^{12/5}-1100} Ra=1. 0612. 4−1∗100{\displaystyle R_{a}=1. 061^{2. 4}-1100} Ra=1. 153−1∗100{\displaystyle R_{a}=1. 153-1100} Ra=. 153∗100=15. 3{\displaystyle R_{a}=. 153*100=15. 3} The annualized rate of return is 15. 3 percent.
Calculate the cumulative attrition rate for the quarter. The average number of employees was 2,048 ((2,049+2,047)/2=2,048{\displaystyle (2,049+2,047)/2=2,048}). The cumulative attrition rate for those two months was 1. 81 percent ((37/2,048)∗100=1. 807{\displaystyle (37/2,048)100=1. 807}) Extrapolate the attrition rate for the rest of the quarter. The cumulative attrition rate is 1. 81 percent and the number of time periods observed is 2 (April and May). Ra=1+. 01813/2−1∗100{\displaystyle R_{a}=1+. 0181^{3/2}-1100} Ra=1. 01811. 5−1∗100{\displaystyle R_{a}=1. 0181^{1}. 5-1100} Ra=1. 02727−1∗100{\displaystyle R_{a}=1. 02727-1100} Ra=. 02727∗100=2. 727{\displaystyle R_{a}=. 02727*100=2. 727} The projected attrition rate for the second quarter is 2. 73 percent.
