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Skilkit for Attrition Calculation

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Attrition has been quite an issue for practically all the employers and attrition calculation a headache for HR professionals. There are N number of ways to calculate attrition rate, many of them quite illogical, still widely used.

This Skilkit explains all the important components and aspects of the issue, so as to arrive at the most appropriate way to calculate attrition.

To quote a few lines:
First of all, let us talk of the Time Interval you should be using to calculate attrition. Consider an example. If the employee strength at the beginning of a period is 10 and 2 of them leave, the attrition is clearly 20%. However, analyzing it further, you will notice that when the first person leaves, it is 1 out of 10 (and hence 10%); but at the time of second departure, it is 1 out of 9 (therefore ). So, it all depends on what time intervals you are using for the calculation. While, a year is too long a period, it can not be on daily basis either. For all practical purpose, a month is quite a reasonable time period.

This is just one of the aspects to be considered. There are at least three more. You can read about all of them and also calculate attrition rate in your company / department (upto 5 categories and overall) using 'ready to use' Skillscape templates available in this Skilkit

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Skilkit for Attrition Calculation

1. 1. Attrition Calculation An article by Ashok Grover Attrition has been quite an issue for practically all the employers and attrition calculation a headache for HR professionals. There are N number of ways to calculate attrition rate, many of them quite illogical, still widely used. Today, I attempt addressing some important components and aspects of the issue, so as to arrive at the most appropriate way to calculate attrition. First of all, let us talk of the Time Interval you should be using to calculate attrition. Consider an example. If the employee strength at the beginning of a period is 10 and 2 of them leave, the attrition is clearly 20%. However, analyzing it further, you will notice that when the first person leaves, it is 1 out of 10 (and hence 10%); but at the time of second departure, it is 1 out of 9 (therefore 11.11%). So, it all depends on what time intervals you are using for the calculation. While, a year is too long a period, it can not be on daily basis either. For all practical purpose, a month is quite a reasonable time period. Having decided on the time period to be used, next comes the issue of the employee data. What figures should be used in the equation – employees left divided by total strength? While the number of people left during a particular time period should be the obvious with no dispute, a common issue is whether you should include the employees who have been asked by the employer to leave. Ideally speaking, yes. Similarly, there can be some natural attrition also like death or retirement. The term ‘natural attrition’ indicates that it is attrition. However, it all depends on the company policy and the purpose data is going to be used for. While there can not be any hard and fast rule, everybody concerned should be very clear what rules are being followed in the organization and there should be uniformity. Other element of the employee strength is still bigger issue in this context. Some people take it as an average of the opening and closing balance for the month. Let us consider a hypothetical case where the opening balance is 10 and all the 10 employees leave during that period. Common sense says the attrition rate is 100%. But, if you take the average of opening and closing {(10+0)/2=5}, the attrition will be 200%, which is not correct. Since the 10 people left out of 10 (and not out of 5), it is only logical that to calculate attrition during a period, you consider only the opening balance as denominator in the above equation. Another aspect is arriving at a uniform base so that data can be compared in the most objective manner. Suppose you had an attrition of 20% in the previous year, how do you compare the current year’s data, while you are still half way through? The only way is to annualize it and compare! If it is 6% in first three months, the annualized figure is 24%, indicating deterioration as compared to previous year. The trend may or may not be the same for rest of the year; but as an assumption, it is expected to be the same if there is no substantial difference in your efforts or the business environment. Well, if the next three months nobody leaves, you can very well say that your annualized attrition, which was 24% during first quarter, has improved and come down to 12%. Would you like to recheck attrition rate in your company / department? Ready to use Skillscape templates are available in the following sheets. u Competency Evaluation & Mapping u DISC / CORE Psychometric services u Balanced Scorecard Training / Implementation u Executive Coaching u 360 Degree Feedback u Exit Feedback Management u On-Board Feedback Management u Employee Satisfaction Surveys u Customized Training Programs www.skillscape.net
2. 2. The time periods to be defined below 2013-14 Apr. May Jun. Jul. Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar.
3. 3. 2013-14 Opening Balance Apr. May Jun. Jul. Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. CUM. Employees left 0 Employees left Employees transferred to other departments 0 Employees transferred to other departments New Joining 0 New Joining Employees transferred from other departments 0 Employees transferred from other departments Closing Balance Manpower Loss during the month Annualized Attrition Rate at particular month-end #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? FALSE FALSE FALSE FALSE FALSE FALSE FALSE FALSE FALSE FALSE FALSE FALSE #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? Data input is required / permitted in pale yellow cells only.
4. 4. 2013-14 Opening Balance Apr. May Jun. Jul. Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. CUM. Employees left 0 Employees left Employees transferred to other departments 0 Employees transferred to other departments New Joining 0 New Joining Employees transferred from other departments 0 Employees transferred from other departments Closing Balance Manpower Loss during the month Annualized Attrition Rate at particular month-end #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? FALSE FALSE FALSE FALSE FALSE FALSE FALSE FALSE FALSE FALSE FALSE FALSE #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? Data input is required / permitted in pale yellow cells only.
5. 5. 2013-14 Opening Balance Apr. May Jun. Jul. Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. CUM. Employees left 0 Employees left Employees transferred to other departments 0 Employees transferred to other departments New Joining 0 New Joining Employees transferred from other departments 0 Employees transferred from other departments Closing Balance Manpower Loss during the month Annualized Attrition Rate at particular month-end #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? FALSE FALSE FALSE FALSE FALSE FALSE FALSE FALSE FALSE FALSE FALSE FALSE #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? Data input is required / permitted in pale yellow cells only.
6. 6. 2013-14 Opening Balance Apr. May Jun. Jul. Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. CUM. Employees left 0 Employees left Employees transferred to other departments 0 Employees transferred to other departments New Joining 0 New Joining Employees transferred from other departments 0 Employees transferred from other departments Closing Balance Manpower Loss during the month Annualized Attrition Rate at particular month-end #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? FALSE FALSE FALSE FALSE FALSE FALSE FALSE FALSE FALSE FALSE FALSE FALSE #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? Data input is required / permitted in pale yellow cells only.
7. 7. 2013-14 Opening Balance Apr. May Jun. Jul. Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. CUM. Employees left 0 Employees left Employees transferred to other departments 0 Employees transferred to other departments New Joining 0 New Joining Employees transferred from other departments 0 Employees transferred from other departments Closing Balance Manpower Loss during the month Annualized Attrition Rate at particular month-end #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? FALSE FALSE FALSE FALSE FALSE FALSE FALSE FALSE FALSE FALSE FALSE FALSE #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? Data input is required / permitted in pale yellow cells only.
8. 8. 2013-14 Opening Balance ##### Apr. May Jun. Jul. Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. CUM. ###### ###### ###### ###### ###### ###### ###### ###### ###### ###### ###### ###### 0 Employees left Employees transferred to other ###### ###### ###### ###### ###### ###### ###### ###### ###### ###### ###### ###### departments 0 Employees transferred to other departments New Joining ###### ###### ###### ###### ###### ###### ###### ###### ###### ###### ###### ###### 0 New Joining Employees transferred from other departments ###### ###### ###### ###### ###### ###### ###### ###### ###### ###### ###### ###### 0 Employees transferred from other departments Closing Balance ###### ###### ###### ###### ###### ###### ###### ###### ###### ###### ###### ###### Manpower Loss during the month ###### ###### ###### ###### ###### ###### ###### ###### ###### ###### ###### ###### Annualized Attrition Rate at particular month-end #NAME? Employees left #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME?
9. 9. Hope, you have found this skilkit useful. If you have any suggestions to improve this skilkit , please share the same with us. We will be grateful. If you are looking for more skilkits, which are not yet covered in Skillscape range, please write to us. customerservice@skillscape.net D-8/8042, Vasant Kunj, New Delhi-110070 India Competency Evaluation & Mapping u DISC / CORE Psychometric services u Balanced Scorecard Training / Implementation u Executive Coaching u 360 Degree Feedback u Exit Feedback Management u On-Board Feedback Management u Employee Engagement Surveys u Customized Training Programs