We look at how to measure and calculate attrition rates in the contact centre.

## What is Attrition?

Attrition is the rate at which members of staff leave the workforce over a given period of time. It is also known as ‘employee turnover’, or ‘employee churn’.

Whilst appearing simple on the surface, the are a lot of nuances to consider, which are also covered in this article:

- How to Calculate Attrition Rate
- What Is the Value of Calculating Attrition?
- What is the Average Employee Attrition Rate in the Contact Centre Industry?
- How to Calculate Involuntary Attrition Rate
- How to Calculate Voluntary Attrition Rate
- How to Calculate New Employee Attrition Rate
- Common Mistakes When Calculating Attrition Rate

## How to Calculate Attrition Rate

The attrition rate calculation, also known as the attrition calculation, is relatively simple – and you can use this formula in Excel.

**Here is the Attrition Rate Formula:**

*Attrition Rate % = (Number of employees that left during period) ÷ (Average number of employees for period) × 100.*

## What Is the Value of Calculating Attrition?

The danger with attrition is that it becomes just another percentage that managers occasionally pass their eyes over. Yet, in terms of real value, high attrition represents huge costs to organisations.

In terms of real value, high attrition represents huge costs to organisations

There are high costs in recruiting and training new staff; these are the direct costs of attrition.

But that’s not all…

The consequential costs of attrition can be about ten times greater than their direct costs when you drill into the details – including metrics like sales conversion.

For example, you’ll probably find that the performance of a new sales employee compared with an experienced sales employee gives you a clear differential on success rates (until they reach similar levels of competence). This can amount to significant financial losses over the course of the year.

In many cases, when the cost of attrition is properly valued, it really gets everyone’s attention. It escalates the cost of losing people from a tens-of-thousands-of-pounds decision to a multi-million-pound decision.

This really helps when putting forward a business case for support in building a better contact centre culture; one of the keys to reducing attrition.

For advice on improving your call centre culture, read our article: The Importance of Call Centre Culture and How to Improve it

## What is the Average Employee Attrition Rate in the Contact Centre Industry?

Attrition is high in contact centres (particularly attrition in BPO) when compared with other industries.

For example, a report by ContactBabel found that one in five UK contact centres have an attrition rate of over 30%.

In addition, advisors seem to leave the industry after a very short period. In fact, some studies indicate that half of the advisors who leave the profession do so within their first 90 days of employment.

## Additional Attrition Rate Calculations:

### How to Calculate Involuntary Attrition Rate

Involuntary attrition is normally excluded from attrition calculations and is calculated using the formula below:

**Involuntary Attrition Rate Formula:**

*Involuntary Attrition Rate (%) = Number of employees that were terminated during period ÷ Average number of employees for period x 100.*

### How to Calculate Voluntary Attrition Rate

Voluntary attrition can be calculated using the formula below:

**Voluntary Attrition Rate Formula:**

*Voluntary Attrition Rate (%) = Number of employees that left voluntarily during period ÷ Average number of employees for period x 100.*

The voluntary attrition rate can be used alongside, and compared to, the total attrition rate and the involuntary attrition rate to identify trends and issues that may be causing staff to leave of their own accord.

It can even be compared to and tied into your new starter attrition rate to give an overview of voluntary leavers during the first 12 months.

### How to Calculate New Employee Attrition Rate

The first six weeks of an employee’s tenure is the most expensive, and an advisor will usually draw more value than they add for several months. However, the first six weeks is the period within which advisors are most likely to leave the contact centre.

So, if you want to find out what is causing advisors to leave in that first six weeks, this cannot be done using the conventional attrition equation. Instead, you’ll need to rely on the ‘new employee attrition rate’ formula, as shown below:

**The New Employee Attrition Rate formula:**

*New Employee Attrition Rate (%) = Number of employees who have joined in the past 12 months AND left the Company ÷ Number of employees who have joined in the past 12 months x 100*

#### Take a Closer Look

While this may give you some insight, you need to take a closer look at attrition rates in the first six weeks of the advisor “lifecycle”, to help identify the moment when advisors tend to leave. This will help you to identify where you need to improve the induction process.

You should define the period that you want to have a look at, whether that’s three months or six months, and then examine the trend. More important than the period analysed are the key touchpoints in the life cycle of an employee.

More important than the period analysed are the key touchpoints in the life cycle of an employee.

Look at the drop-out at every stage – form filling on arrival, day one at the training office, when they’re in the classroom, when they start taking supervised calls, when they are introduced to their team leader and when they are left on their own.

It’s equally important to understand each of the distinct stages of the early life cycle, not just the duration of the early life cycle – because you can draw the wrong conclusions from that.

What is the data pointing towards for further investigation? Is recruitment giving the wrong impression of the company/role? Is classroom training uninspiring? Are the trainers good enough? Are advisors being left unsupervised too quickly?

In addition, it can be good to measure advisor satisfaction when onboarding new staff. This can highlight what you are doing well, so you can then look to replicate this during other parts of the induction process.

If you are looking for ways to reduce new hire attrition, read our article: 10 Ways to Reduce New Employee Attrition

## Common Mistakes When Calculating Attrition Rate

### ‘Average Number’ vs ‘Total Number’ of Employees:

A common mistake is to divide by the total number of employees – instead of the average number of employees.

How do you calculate the average?

This figure can be reached by taking the starting number of employees for the period, adding that to the finishing number of employees for the period, and dividing the result by two. For most, the period is a full calendar year.

So, for a company that began a year with 6,500 employees and ended the year with 6,380 employees, the calculation for average employees would be (6,500+6,380) / 2 = 6,440.

### Calculating Attrition Rate Just Once per Year:

When we define attrition rate, we typically talk about a single % calculated across a period of a year. However, this doesn’t mean that attrition rate is a metric that should be tracked only once per year.

Instead, it is better to calculate the metric on a rolling, week-by-week basis – with a moving average trend.

This means that in one week you would calculate the attrition rate for the past 52 weeks and then, in the next week’s calculations, the oldest week would drop off and the new one added on.

This will give you much better insight into what caused the attrition – as opposed to just looking at an overall figure at the end of the year.

It can also help you immediately identify and address what caused a spike. (If it was avoidable, you can learn directly from the experience, so it doesn’t happen again.)

### Presenting Attrition Rate to the Wider Business as Just a Percentage:

The wider business will become much more interested in helping you to reduce attrition when you attach a cost to it.

That’s not just recruitment and training costs, but other things like vacancy costs, the costs of the team spending time to helping new recruits, and so on.

You must bring the percentage to life to prove your case.

### Separating Out Involuntary Attrition From Overall Attrition Rates:

Be aware of the difference between voluntary and involuntary attrition rates – as also seen in the calculations above:

**Voluntary Attrition**– When advisors leave of their own accord.**Involuntary Attrition**– Also known as ‘intentional attrition’ or ‘planned attrition’, this is where somebody is asked to leave the company. This is typically for performance-related and disciplinary reasons, as well as redundancy.

What’s the problem?

Well, some managers choose to exclude involuntary attrition from the overall attrition figure, as it wasn’t their choice to leave. However, this isn’t always considered best practice, as involuntary attrition still represents a cost for the business.

It can even suggest a problem elsewhere, whether it’s a recruitment problem, a management problem, or a coaching problem.

Whatever the case, whenever somebody leaves the company, it should lead to a moment of soul-searching. Even if you just uncover that someone left for an exciting new opportunity, it’s still good to have sight of and understand.

Overall, the more insight you have the better. So best practice advice is have a handle on your voluntary, involuntary, and new starter attrition figures – as well as overall attrition rates for a full and comprehensive picture of what’s happening on the frontline of your call centre.

*For more advice on managing your teams, take a look at these articles:*

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