Definition
Attrition rate is the percentage of employees who leave an organisation over a set period, such as a month or a year. It is calculated by dividing the number of leavers by the average headcount for that period and multiplying by 100.
How to calculate attrition rate
The formula in words: attrition rate equals the number of employees who left during the period, divided by the average number of employees during the period, multiplied by 100. Average headcount is usually the headcount at the start of the period plus the headcount at the end, divided by two. Some organisations average the monthly headcounts instead, which is more accurate when numbers swing during the year.
Worked example: a company starts the year with 190 employees and ends it with 210, so average headcount is 200. During the year, 20 people leave. Attrition rate is 20 divided by 200, which is 0.10, multiplied by 100, giving 10% for the year.
For a monthly rate, use the leavers and average headcount for that month. To estimate a yearly figure, add the twelve monthly rates together rather than multiplying a single month by twelve, since one month can be unusually high or low.
Some early attrition comes from a mismatch in how people like to work, which springhire's culture fit assessment lets you check for before an offer is made.
Attrition vs turnover
The two words are often used interchangeably. Where a distinction is drawn, turnover counts all leavers, including those whose roles are refilled, while attrition counts leavers whose roles are not replaced, so the workforce shrinks, for example through retirements or during a hiring freeze. Others use attrition for voluntary leavers only. No definition is universal, so write down which leavers you count (voluntary, involuntary, retirements, ends of fixed-term contracts) and apply it consistently.
How to judge your attrition rate
A single company-wide figure says little on its own. Compare it with your own trend over several periods, then break it down: voluntary against involuntary, by team, by manager, by tenure band and by role. Leavers in their first few months often point to hiring or onboarding problems, while leavers with long service point more towards pay, progression or management.
Separate regrettable from non-regrettable leavers too, since losing a poor performer is not the same as losing someone you wanted to keep. Published benchmarks vary widely by industry, country and role type, so treat them with caution and focus on which way your number is moving and what each departure costs you.
Calculation errors to avoid
Counting internal transfers as leavers, mixing contractors with employees, and changing the definition from one year to the next all distort the figure. Avoid dividing by the end-of-period headcount alone; in a growing company that makes attrition look lower than it is.
Be careful with small teams, too. In a team of ten, one leaver is 10% attrition, so look across several periods or larger groups before drawing conclusions.
Frequently asked questions
Divide the number of employees who left during a period by the average headcount for that period, then multiply by 100. For example, 15 leavers in a year with an average headcount of 300 gives 15 divided by 300, which is 0.05, so an annual attrition rate of 5%.
Monthly attrition rate equals leavers in the month divided by average headcount in the month, multiplied by 100. Average headcount is the start-of-month plus end-of-month headcount divided by two. If 4 people leave and average headcount is 200, the monthly rate is 2%.
There is no single good figure; it depends on industry, role type, location and how you define leavers. Judge your own rate by its trend over time, how much of it is voluntary and regrettable, where it is concentrated, and what each departure costs in hiring and lost output.
Related terms
Part of the springhire HR glossary.
