How to Calculate Attrition: A Comprehensive Guide

It could also be a red flag for underlying issues, such as poor working conditions or a lack of opportunities for career growth. The employee turnover rate is an important metric—hence knowing how to calculate the attrition rate on your own is very handy. If employee attrition is a problem, companies can take measures to get ahead of it. For example, employee engagement surveys, stay interviews, regular performance reviews, and opportunities for career development can help employees stay motivated in their positions for longer.

  • From time to time, I will invite other voices to weigh in on important issues in EdTech.
  • So, your attrition rate would be 9.41%, which falls within the healthy range experts recommend.
  • But as many organizations return to pre-Covid operations, it’s becoming harder to keep and attract new people.
  • People are allowed to seek chances for career growth outside your company.
  • A recent study showed that job stress has a negative impact on performance and a positive correlation with leaving the company.

According to a recent report by LinkedIn, the turnover rate in the tech industry is among the highest, at 12.9%. This makes sense as the demand and competition for recruiting tech talent are generally high. Technology plays a crucial role in nearly every industry, and there is a persistent need for skilled professionals. Engineers often move between jobs as projects come and go, which could also add to the higher rate.

In contrast, turnover is the number of people who leave an organization and do get replaced. There are several reasons employers ask, “What does attrition rate mean? ” From this article, we hope you already understand the definition of attrition rate, how to calculate it, what influences it, and the various ways you can improve it. Additionally, you can conduct an attrition vs. retention survey to learn how well your business keeps its employees.

To do that, you’ll need to dive into what’s causing a turnover at your company. Let’s dive deep into understanding employee attrition rate, churn, and turnover. You do this by dividing the number of employees who left your company within the period by your average number of employees – then multiplying by 100.

Software can also calculate and track other workforce analytics, like cost per hire, time to fill, and retention rates. With such data, companies can pinpoint areas suffering from inefficiencies and implement corrective actions. Offering advancement opportunities is an easy way to counteract this turnover driver.

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For example, seasonal jobs may have higher turnover during off-peak seasons. This article discusses how to calculate turnover rates accurately to examine its impact on your business and help determine what a good turnover rate looks like for your company. Painful as it may be, the most revealing, honest feedback for your company’s attrition rate comes when an employee leaves — provided you have an exit solution in place. However, this percentage drops significantly—to only 25% if only voluntary separations are considered.

  • With this in mind, it’s important to set a baseline for attrition rate so you can measure how well (or badly) you’re doing.
  • Voluntary attrition takes place when an employee decides to leave the organization.
  • When an employee leaves the company because of their own reasons, this happens.
  • Because, when there is a low rate, they don’t have to bear the cost of new recruitment, training etc.
  • In fact, turnover is more accurately described as the rate at which a company replaces employees over a set period of time.
  • Of course, avoiding unwanted attrition is a difficult task in and of itself — over the past few years, every single one of us has had the opportunity to rethink and restructure our relationship with work.

The final step is to take the number of churned employees in each quarter and divide it by the average number of employees for the period. The process of calculating the attrition rate is straightforward and can be broken into four steps. When a company discovers that its attrition rate is trending in the wrong direction, it often needs to make systematic changes to reduce attrition. Whatever the case, whenever somebody leaves the company, it should lead to a moment of soul-searching. Even if you just uncover that someone left for an exciting new opportunity, it’s still good to have sight of and understand. There are high costs in recruiting and training new staff; these are the direct costs of attrition.

What Is Regrettable Turnover?

However, attrition and turnover are more complex than they seem—and to make matters more confusing, the two terms are often used interchangeably, even though they describe different measurements. Upon entering those assumptions into our formula and linking them to our employee roll-forward schedule, we are left with the following figures. The beginning number of employees at the start of Q1-21 is 100,000 and from there, the following set of assumptions will drive our model.

When your people love working for you, why would they go anywhere else? Your employee experience needs to start the moment a candidate looks at your job ad until they hand their key in on their last day, then even beyond that with an alumni program. Your talented employees are the people who make your business successful and drive growth. Of course, avoiding unwanted attrition is a difficult task in and of itself — over the past few years, every single one of us has had the opportunity to rethink and restructure our relationship with work. The attrition rate can also be calculated in Google Sheets or Excel by using some of the basic formulas.

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In many cases, when the cost of attrition is properly valued, it really gets everyone’s attention. It escalates the cost of losing people from a tens-of-thousands-of-pounds decision to a multi-million-pound decision. Suppose your company had 1000 employees at the beginning of the quarter and 960 employees at the end of the quarter. Check out our Exit Solution and find out how you can improve your exit program (and identify what’s causing attrition and where to act). To remain competitive, feedback is critical for both individual success and professional development. It’s essential to know that the L&D opportunities you offer are fit for purpose and are good enough to keep your people.

Moreover, software development offers a wide range of career paths and opportunities for specialization. Developers may change jobs more frequently to gain experience in different areas, technologies, or industries, leading to increased turnover rates. So, if you had 100 employees and 20 of them left in January, your employee turnover rate equation would show a 22.22% attrition rate. The first step to calculating turnover rates of employees is to find the average number of employees for the given period.

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Internal movement within the company can be considered a positive, as that employee could have been promoted or qualified for their desired position. While managers should be giving their employees regular, in-the-moment feedback, taking time for formal one-on-one meetings allows you to sync up and build that all-important trust with employees. You’ll need to know who left voluntarily and who left involuntarily. This process may also be referred to as “natural attrition,” in the sense the employees depart on their own accord without intervention from their employer.


While attrition is normal, an abnormally high number of employees leaving could indicate something more serious, such as stagnating company growth. Considering 96% of workers are looking for a new job, according to a 2022 survey, it is critical for employers to examine their workforce data to understand why — starting with attrition rate. Understanding how to calculate attrition rates can help employers make informed decisions about employee retention and organizational improvement. Organizations that track their rate of attrition over time can see when they need to reevaluate their people strategies.

This will allow them to identify any potential problems and address them before they become too serious. Continu is the #1 modern learning platform built to help companies scale and consolidate learning. From training customers to employees, Continu is the only platform you need for all learning. One of the most important ways you can help your teams grow and develop through their time at your company is through enterprise learning.

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