The attrition rate formula
Divide the number of employees who left during a period by the average headcount for that period, then multiply by 100.
Attrition rate (%) = (Exits during the period ÷ Average headcount) × 100
Average headcount = (Headcount at the start + Headcount at the end) ÷ 2. If headcount swings a lot within the period, average the month-end headcounts instead.
Worked example: monthly attrition
A team starts April with 480 people and ends it with 500. Twelve people leave during the month.
- Average headcount = (480 + 500) ÷ 2 = 490
- Monthly attrition = 12 ÷ 490 × 100 = 2.45%
How to annualise monthly attrition
There are two common methods. Say which one you used, because they give different answers.
| Method | Formula | Example (2.45% a month) |
|---|---|---|
| Simple | Monthly rate × 12 | 29.4% |
| Compounded | 1 − (1 − monthly rate)12 | 25.7% |
The simple method slightly overstates annual attrition because it ignores that each month's exits come from a smaller remaining group. For year-on-year comparisons, the most robust option is to use actual twelve-month exits divided by the average of the twelve month-end headcounts.
Voluntary, involuntary and regrettable attrition
- Voluntary attrition: resignations. This is what retention programmes can influence.
- Involuntary attrition: terminations, layoffs and contract ends.
- Regrettable attrition: voluntary exits of people you wanted to keep, usually strong performers or people in critical roles.
Report all three. A falling total can hide a rising regrettable rate, which is the number that hurts delivery.
Early attrition (new-joiner attrition)
The share of hires who leave within a set window, often 90 days or 12 months:
12-month new-joiner attrition (%) = (Hires from a cohort who left within 12 months ÷ Hires in that cohort) × 100
High early attrition usually points to hiring, onboarding or role-fit problems rather than pay.
Attrition vs turnover
In India the two words are often used interchangeably. Strictly, attrition refers to people leaving, while turnover often implies the role is backfilled. Choose one definition, document it, and apply it consistently across business units and years.
Common mistakes
- Dividing by the end-of-period headcount instead of the average, which flatters fast-growing teams.
- Mixing interns, contractors and full-time employees in one rate.
- Counting internal transfers as exits.
- Comparing annualised monthly rates with actual twelve-month rates.
From measuring attrition to predicting it
The attrition rate tells you what already happened. To act before people resign, you need to know who is likely to leave and why. Kynoa's employee attrition prediction scores flight risk six months ahead. You can also estimate what attrition costs you with the free attrition cost calculator.