How to Calculate Attrition Rate per Month

Monthly Attrition Rate Calculator

function calculateAttrition() { // Get input values var startCount = document.getElementById('startHeadcount').value; var endCount = document.getElementById('endHeadcount').value; var separations = document.getElementById('separations').value; // Validate inputs if (startCount === "" || endCount === "" || separations === "") { alert("Please fill in all fields to calculate the rate."); return; } var start = parseFloat(startCount); var end = parseFloat(endCount); var left = parseFloat(separations); // Logic validation if (start < 0 || end < 0 || left 0) { monthlyRate = (left / averageHeadcount) * 100; } // 3. Calculate Annualized Rate // Formula: Monthly Rate * 12 var annualizedRate = monthlyRate * 12; // Display Results document.getElementById('avgHeadcountResult').innerText = averageHeadcount.toFixed(1); document.getElementById('monthlyRateResult').innerText = monthlyRate.toFixed(2) + "%"; document.getElementById('annualRateResult').innerText = annualizedRate.toFixed(2) + "%"; // Show result box document.getElementById('resultBox').style.display = "block"; }

Understanding employee turnover is critical for maintaining a healthy business culture and minimizing the costs associated with hiring and training. The Monthly Attrition Rate is a key Human Resources metric that measures the rate at which employees leave a workforce over a specific month.

Whether the separations are voluntary (resignations) or involuntary (layoffs), tracking this number helps HR leaders identify trends, assess retention strategies, and forecast future hiring needs.

The Monthly Attrition Rate Formula

To calculate the attrition rate for a single month, you need three data points: the number of employees at the beginning of the month, the number at the end of the month, and the total number of separations during that period.

Step 1: Average Headcount = (Start Count + End Count) / 2

Step 2: Attrition Rate = (Separations / Average Headcount) × 100

Why use the Average Headcount?

You might wonder why we don't just divide by the starting number of employees. Using the average accounts for fluctuations during the month, such as new hires joining or multiple people leaving at different times. It provides a more statistically accurate representation of the workforce size during the period being measured.

Step-by-Step Calculation Example

Let's walk through a realistic scenario to ensure you understand the math behind the calculator.

• Scenario: A marketing agency wants to check their retention for January.
• Start of Month: 150 employees.
• End of Month: 148 employees.
• Separations: 3 employees left the company (note: the end count is 148 because perhaps 1 new person was hired, balancing the numbers slightly).

The Math:

1. First, find the average employees: (150 + 148) / 2 = 149.
2. Next, divide separations by the average: 3 / 149 = 0.0201.
3. Finally, multiply by 100 to get the percentage: 0.0201 × 100 = 2.01%.

The monthly attrition rate for January is 2.01%.

Annualizing the Rate

While a monthly rate is useful for immediate analysis, most industry benchmarks are annual. To project what your annual turnover would look like if the current trend continues, you simply multiply the monthly rate by 12.

Using the example above: 2.01% × 12 = 24.12% Annualized Attrition.

What is a "Good" Attrition Rate?

There is no single magic number, as attrition varies heavily by industry. Retail and hospitality often see rates as high as 60-70% annually (approx 5% monthly), while technology and finance sectors usually aim for lower rates.

• Healthy Range: Generally, an annual attrition rate of 10% (approx 0.8% per month) is considered healthy. It allows for fresh talent to enter without disrupting operations.
• Warning Sign: If your monthly attrition consistently exceeds 2% (24% annualized), it may indicate underlying issues with management, compensation, or company culture.

Tips for Reducing High Attrition

If your calculation shows a higher percentage than desired, consider these retention strategies:

• Conduct Exit Interviews: Gather honest feedback on why employees are leaving.
• Review Compensation: Ensure salaries are competitive within your specific market.
• Improve Onboarding: A strong start reduces early-stage turnover.
• Offer Growth Paths: Employees stay longer when they see a future at the company.