rate on attrition

7/29/2019 rate on attrition

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ATTRITION RATE

A factor, normally expressed as a percentage, reflecting the degreeof losses of personnel or materiel due to various causes within a

specified period of time

The rate of shrinkage of manpower in size or number.

Reduction of employees by retirement, resignation & layoff.

A term used to describe voluntary and involuntary terminations,

deaths, and employee retirements that result in a reduction to the

employer's physical workforce.


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CAUSES OF ATTRITION

Attrition is an expected yet dreaded cost of business. Essentially, there are two causes of attrition,which can be grouped into two broad categories

Functional attrition and Preventable attrition.

Functional attrition is unavoidable, inevitable turnover. Examples include employees who retire,employees who leave for a spouse's job transfer, and employees who leave because of healthproblems or to care for sick relatives. In other words, functional attrition is caused by circumstancesthat can't be controlled. You must expect and accept this type of turnover.

Preventable turnover, on the other hand, can usually be controlled and avoided but often isn't i.e.-

Poor hiring practices, misguided policies, low salaries and inflexible corporate attitudes are some ofthe preventable reasons people leave companies.

Preventable turnover occurs when your company can change a policy or find a solution to keepemployees from leaving but doesn't


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Reasons & Measures of preventable attrition

a) Lack of job satisfaction Employees resigns because they wants to advance their career, but theirposition is a dead end. They are a great employee and likes their company, but their goals just don't

match with their position's potential.Suggestion- Company could avoid the resignation by moving them into a position with growth potential& suitable profile.

b) Stressful work environment - Employee works for long hours with few rewards. S/He's expected towork 60 hours a week to meet her/is deadlines. They feels undervalued and overworked. At the endS/He's started looking for another job.

Suggestion- Company could prevent this by setting deadlines that are achievable in a 40-hour workweek& By offering monetary, non-monetary incentives.

c) Outside influences Sometimes employee is approached by a competitor recruiter who promise thempaying twice what their company is paying them and with far better benefits & Employee just take uptheir offer.

Suggestion-This could be prevented by paying employees what they're worth and having a comprehensivebenefit plan.

d) Conflict with a manager In a team people dont prefer working with less efficient or careless, lazyperson as it hampers their output also or inefficient person valued just because their team is efficient &valued. As a result conflicts, unrest is aroused that ends with resignation.

Suggestion- You could prevent this by assigning Bruce to another department or working with the

manager and Bruce on conflict resolution.


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The formula and correct logic behind calculation ofATTRITION RATE

Examples:

1)Actual Employees No. Of people left No. Of Joined Total Employees

(Opening BAL) (Attritions) (Current Headcount)

150 20 25 155

So according to the formula: ((20 x 100) / (150 + 25)) / 100

Which comes to 0.1142 i.e. 11%

Now as you had 150 previously and now 25 joined so it makes 150 + 25 =175Now if you calculate 11.42% of 175 i.e. 175 x 0.1142 = 20

Which clearly shows that 175 - 20 = 155, which is your current headcount and at the same time

you can say my attrition is 11.42% that shows you lost 20 employees of 150 and 25 more joined

which makes count to 175.

2)Actual Employees No. Of people left No. Of Joined Total Employees(Opening BAL) (Attritions) (Current Headcount)

100 50 0 50

This is the special case where we are considering attritions only keeping into mind that nobody

has joined in particular month.

So according to the formula: ((50 x 100) / (100)) / 100

Which comes to 0.5 i.e. 50%

Now as you had 100 previously and now 0 joined so it makes 100 + 0 =100


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Now if you calculate 50% of 100 i.e. 100 x 0.5 = 50

Which clearly shows that 100 - 50 = 50, which is your current headcount and at the same time

you can say my attrition is 50% that shows you lost 50 employees of 100 and 0 joined which

makes count to 50.

3) Actual Employees No. Of people left No. Of Joined Total Employees(Opening BAL) (Attritions) (Current Headcount)

500 200 100 400

So according to the formula: ((200 x 100) / (500 +100)) / 100

Which comes to 0.3333 i.e. 33.33%


Now if you calculate 33.33% of 600 i.e. 600 x 0.3333 = 200

Which clearly shows that 600 - 200 = 400, which is your current headcount and at the sametime you can say my attrition is 33.33% that shows you lost 200 employees of 500 and 100

more joined which makes count to 400.

4)Actual Employees No. Of people left No. Of Joined Total Employees

(Opening BAL) (Attritions) (Current Headcount)

8000 5000 500 3500So according to the formula: ((5000 x 100) / (8000 +500)) / 100

Which comes to 0.5882 i.e. 58.82%


Now if you calculate 58.82% of 8500 i.e. 8500 x 0.5882 = 5000

Which clearly shows that 8500 - 5000 = 3500, which is your current headcount and at the same

time you can say my attrition is 58.82% that shows you lost 5000 employees of 8000 and 500

more joined which makes count to 3500.


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Turnover Cost of Employee

(Calculating Cost per Employee)

The Employee turnover cost is defined as the Percentage of Annual Salary, including the

other cost benefits given to an employee.

It can be calculated using the formula:

Turnover Cost =

Hiring Cost + Training Cost + Learning Curve Loss Cost + Termination / Separation Cost+ Vacancy Cost

The following questionnaire can help in capturing the details to calculate the employee

turnover cost


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Turnover Cost Interview Questionnaire

Exit Interviews

1. Do you conduct exit interviews? {If no, please go to question 4}

2. Who is typically involved in an exit interview? {Please include the number of

individuals involved and their titles/position}

3. How long does a typical exit interview usually last?


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Administrative tasks

4. What types of administrative tasks are associated with an employee leaving the

organization? {Ex. processing records, security, payroll, benefits; Notice Period}

5. How many individuals are typically involved in completing the administrative tasks

associated with a teacher leaving? What are their titles/positions?

6. How much time does it take for ALL administrative tasks to be completed?


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Advertising

7. In what ways do you advertise openings for a new / replacement positions?

{Newspaper, Internet, etc.}

8. Do you usually advertise for multiple positions at the same time? If so, in a typical

year, how many positions do you advertise for at one time?

9. What types of advertising costs do you typically encounter when trying to recruit for a

position? {Please provide cost estimations for each category of advertising costs}


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Recruiter

10. Do you use recruiters in trying to find qualified candidates? How many recruiters do

you employ? {If none, please go to question 15}

11. What types of activities will a recruiter typically perform?

12. Is this recruiter paid on a consulting or salary basis?

13. If salaried, what is the salary range for a recruiter? If consulting, what is the typical

consulting fee?

{If consulting, please specify the amount of the recruiters time associated with the

consulting fee.}

14. In a typical year, how many new teachers does the recruiter recruit? How many will

actually be hired?


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Travel

15. Do you pay any travel costs (either for the recruiter or the applicants) during the

hiring process?

16. If so, what is the average per position?


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Processing applicants

17. How do you process applications and resumes?

18. Who handles this task? {Please specify the number of individuals involved and

their titles/positions}

19. How much time is associated with processing applications/ resumes?

20. What types of background checks do you perform on prospective employees?

21. Who is involved in this task? {Please specify the number of individuals involved

and their titles/positions}

22. How many background checks do you typically conduct for a single position?

23. How much time is associated with conducting background checks on a single

applicant?


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Interviews

24. How many interviews do you typically conduct for a vacant position? Do you ever

conduct multiple interviews with the same applicant?

25. Who usually conducts these interviews? {Please specify the number of individuals

involved and their titles/positions}

26. How much preparation time do interviewers usually need for these interviews?

27. How long do these interviews typically last?

28. Once interviews have been conducted, how do you choose which applicant to

extend an offer to?

29. Who is involved in this selection process? {Please specify the number of individualsinvolved and their titles/positions}

30. How long does the selection process typically last?


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Co-ops

31. Does you district belong to an electronic co-op which does the screenings and

qualifying of applicants? {If not, please go to question 35}

32. What are the costs associated with belonging to this co-op?

33. How does this co-op work? What steps does it eliminate in the hiring process?

34. How many positions in a typical year does your organization hire from the co-

op pool?


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Stipends and bonuses

35. Does your organization pay stipends to employees assigned to shortage areas

(niche talent / expertise employees)?

36. In the past year, what percentage of such employees who received niche

expertise stipends?

39. Does your organization pay other bonuses to new employees?

40. In the past year, what percentage of new employees received other bonuses?


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Post-employment tasks

41. What types of administrative tasks must be completed after a candidate is hired?

{Ex. establishing payroll, security, benefits, computer passwords, email;

dissemination activities}

42. Who is involved in these tasks? {Please specify the number of individuals

involved and their titles/positions}

43. How long does it typically take for these administrative tasks to be completed?


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Orientation

44. What types of fresher support activities (Induction Plan) do you offer new joiners?

{If none, please go to question 47.}

45. How many new joiners attend these activities in a year?

46. Who is involved in conducting these activities? {Please specify the number of

individuals involved and their titles/positions}

47. What type of time commitment is usually required of the individuals involved?

{Other than the freshers}

48. Are new joiners given any orientation materials? If so, what are the costs

associated with the materials for EACH of them?


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Training

49. How is your organization assisting employees with the new requirements

for professional development training associated with certification?

50. For employees in their first year in the company, how much professional

development will you organize? {In terms of cost for training, training materials}

51. How many days are the new joiners dont attend work due to professional

development training?


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The following table can help in capturing the data to calculate the turnover cost

Turnover Cost Calculations

The following rules are used in all calculations of turnover cost. If any

calculation deviates from these rules, a footnote describes the rule used for the

calculation. Sources of information are also noted.

Estimations of time for the interview: - If multiple individuals are involved in a

task, the reported time is divided evenly among all individuals involved.

Stipends, other bonuses and costs are computed for the amount invested in

the resigned / terminated employee and the amount provided to new joiners filling

the vacant positions.


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Task

Time onTask

EmployeesInvolved in the process

Cost perYear

SEPARATION COSTS

Exit Interview Minutes per individual

Grade A

Grade - B

Separation Administrationcost

Hours per resignation

Grade

A

Grade B

HIRING COST

Ad Cost

Recruitment Cost

Processing Applications

Position A

Position B

Reference Checks

Position A

Position B


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Interviews

Position A

Position B

Post-employment Admin Tasks

Grade A

Grade - B

Stipends

Grade A

Grade - B

Other Bonus

Grade A

Grade - B

TRAINING COSTS

Orientation

Grade - A

Grade B

Training

Grade - A

Grade B

The final turnover cost can be obtained, by adding up all these costs.

Documents

rate on attrition