How Do You Calculate Attrition Rate – Cost Calculator

Employee Attrition Rate Calculator

Number of Employees at the Start of Period:

Number of Employees at the End of Period:

Number of New Hires During Period:

Results:

Employee Attrition Rate: —%

Understanding and Calculating Employee Attrition Rate

Employee attrition rate, often referred to as turnover rate, is a critical metric for any organization. It measures the percentage of employees who leave a company over a specific period. A high attrition rate can signal underlying issues within a company, such as poor management, inadequate compensation, lack of growth opportunities, or a negative work environment. Conversely, a low attrition rate generally indicates a healthy and stable workforce.

Why is Attrition Rate Important?

Cost Implications: Replacing employees is expensive. Costs include recruitment, onboarding, training, and lost productivity. High attrition directly impacts the bottom line.
Morale and Productivity: Frequent departures can negatively affect the morale of remaining employees, leading to decreased productivity and engagement.
Knowledge Loss: When employees leave, they often take valuable institutional knowledge and experience with them.
Employer Branding: A reputation for high turnover can deter potential talent from applying to your organization.

How to Calculate Employee Attrition Rate

The formula for calculating employee attrition rate is straightforward:

Attrition Rate = (Number of Employees Who Left During Period / Average Number of Employees During Period) * 100

To get the average number of employees during the period, you typically use the following:

Average Number of Employees = (Number of Employees at the Start of Period + Number of Employees at the End of Period) / 2

However, a more nuanced approach, especially when considering new hires, is to account for the total number of employees that *could* have been employed throughout the period. A commonly used, and often more accurate, formula that accounts for employees leaving and new hires entering is:

Attrition Rate = (Number of Employees Who Left During Period / Average Number of Employees During Period) * 100

Where the Average Number of Employees is calculated as:

Average Number of Employees = (Number of Employees at the Start of Period + Number of Employees at the End of Period) / 2

It's crucial to define your period (e.g., monthly, quarterly, annually) and consistently apply it.

Example Calculation

Let's consider a company with the following data for a quarter:

Number of Employees at the Start of the Quarter: 100
Number of Employees at the End of the Quarter: 90
Number of New Hires During the Quarter: 5

First, calculate the average number of employees during the quarter:

Average Employees = (100 + 90) / 2 = 190 / 2 = 95

Now, we need to determine the number of employees who actually left. This is the difference between the starting number and the ending number, *plus* any employees who left voluntarily. However, for simplicity in this calculator and a common interpretation, we'll assume the difference in headcount represents those who left. In more detailed analysis, one would track actual departures.

Number of Employees Who Left (in this simplified model) = Employees at Start – Employees at End + New Hires = 100 – 90 + 5 = 15 (This represents total separation from the initial cohort and those leaving before new hires are fully counted, which can be complex. The standard formula uses total departures directly.)

Using the direct "Number of Employees Who Left" (which would be 10 in this scenario if no new hires were factored into the "left" count) would be:

Let's re-evaluate with a standard approach: Assume 10 employees left and were replaced by 5 new hires, resulting in a net loss of 5. The total number of employees leaving the company from the initial pool is what matters for attrition. If we had 100, and ended with 90, with 5 new hires, it means 15 employees left (100 – 90 + 5 = 15). If the intention is *total voluntary and involuntary departures*, then we would need that specific number. For this calculator's simplicity, we'll use the common interpretation where Number of Employees Who Left = Employees at Start – Employees at End + New Hires, if net change is the focus.

Let's clarify with the most standard calculation:

Assume the 100 employees at the start. Throughout the quarter, 15 employees left (either voluntarily or involuntarily). By the end of the quarter, there are 90 employees. This implies 5 new employees were hired (100 – 15 + 5 = 90).

Number of Employees at the Start: 100
Number of Employees at the End: 90
Number of Employees Who Left: 15

Average Employees = (100 + 90) / 2 = 95

Attrition Rate = (15 / 95) * 100 ≈ 15.79%

For this calculator, we will use the input fields as provided: Start Employees, End Employees, and New Hires. The calculation will infer the number of employees who left as: Employees Who Left = Employees at Start – Employees at End + New Hires. This is a common way to interpret the available data for attrition.