Attrition Rate Calculation

Joe, 27 is a human resources manager in a software company. Off late, he has thought of ways to deal with the high attrition rate in his company by introducing some new strategies and improving the overall work environment. Exact company attrition rate calculation has helped him understand the reasons behind the high attrition rate and find solutions for the same.

Joe is not alone, there are many human resources 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 have increased slowly and steadily compelling many young professionals to quit their jobs and look for better paying jobs somewhere else. Attrition rate calculation formula can also enable us to know how many customers or clients have left the company on being dissatisfied with the services provided by the company. Along with attrition rate calculation, let us also know the factors which cause a rise in attrition rates.

Calculating Attrition Rates

Let's understand the procedure of attrition rate calculation. Well, attrition rate calculation is not at all difficult and can be done easily if you know the correct technique. In order to calculate the attrition rate, you need to know the exact number of people who have left the company and then divide the same by the total number of employees. By multiplying the answer of this fraction by hundred, you will be getting your attrition rate number. For example, assume that a particular firm has 200 employees and that 10 of them have left in a particular month. Then, the attrition rate would be 10/200*100=5. So, the attrition rate for this company would be 5%. A firm may have some new joiners at the time when some employees are leaving. Then, the attrition rate would be calculated as follows:

Attrition rate=((no. Of attritions) / (Actual Employees + New Joined)) /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 Rates in Organizations

Following are the factors which affect attrition rates in organizations:

Salary
People quitting a particular job because of low salary are many. In fact, in a recent survey it was found that most people who switched jobs frequently were because they were not happy with the pay package offered to them. Lack of performance appraisals and no incentives and 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 senior team meetings to understand the needs of employees, salaries being offered by competitors and making some positive, employee motivation and innovative changes in the way an organization functions.

Hopefully, this article on attrition rate calculation and factors causing a rise in attrition rate will help you decision-making in your company. So, carry out the above suggestions for long-term success. Best of luck!