Absence Rates and Turnover Formula
Learn how to calculate employee absence rates, staff turnover rates, and estimated absence and replacement costs.
This calculation estimates how much available working time was lost to absence, what proportion of the average workforce left, and the estimated cost of both. Using one consistent reporting period makes the results easier to compare over time.
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Estimated Combined People Cost
Where:
First estimate the cost of all absence days, then add the estimated cost of replacing employees who left during the same period.
Variables Explained
| Variable | What It Means | Unit |
|---|---|---|
| H - Average headcount | The average number of employees employed during the measurement period. | employees |
| A - Average absence days per employee | The average number of workdays each employee was absent during the period. | days |
| W - Working days per employee | The possible working days for each employee during the same period. | days |
| L - Number of leavers | The number of employees who left during the measurement period. | employees |
| D - Average daily employee cost | The estimated employment cost for one employee for one working day. | currency |
| R - Replacement cost per leaver | The estimated recruitment, onboarding, training, and productivity cost for one employee who leaves. | currency |
Step-by-Step Calculation
Calculate total absence days
Multiply average headcount by average absence days per employee to estimate all absence days in the period.
totalAbsenceDays = H * A
Calculate total available working days
Multiply average headcount by working days per employee to estimate the total possible working time.
totalAvailableWorkingDays = H * W
Calculate the absence rate
Divide absence days by available working days and express the result as a percentage.
absenceRate = (totalAbsenceDays / totalAvailableWorkingDays) * 100
Calculate the turnover rate
Divide the number of leavers by average headcount and multiply by 100.
turnoverRate = (L / H) * 100
Estimate absence cost
Multiply total absence days by the daily employee cost entered.
estimatedAbsenceCost = totalAbsenceDays * D
Estimate turnover cost
Multiply the number of leavers by the estimated replacement cost per leaver.
estimatedTurnoverCost = L * R
Calculate combined people cost
Add estimated absence cost and estimated turnover cost.
estimatedTotalPeopleCost = estimatedAbsenceCost + estimatedTurnoverCost
Annual absence and turnover calculation example
Total absence days
100 * 6.5
650 days
Total available working days
100 * 260
26,000 days
Absence rate
(650 / 26,000) * 100
2.50%
Turnover rate
(12 / 100) * 100
12.00%
Estimated absence cost
650 * $200
$130,000
Estimated turnover cost
12 * $8,000
$96,000
Estimated combined cost
$130,000 + $96,000
$226,000
Final Result
The estimated absence rate is 2.50%, employee turnover rate is 12.00%, and combined people cost is $226,000 for the year.
Assumptions
- ✓All inputs relate to the same measurement period, such as one quarter or one year.
- ✓Average headcount is a reasonable representation of workforce size throughout the period.
- ✓Absence days are measured consistently across employees and exclude categories excluded by the organisation's reporting method.
- ✓Average daily employee cost is an appropriate estimate of the cost associated with one lost working day.
- ✓Replacement cost per leaver reasonably reflects the costs the organisation chooses to include.
Limitations
- !The calculation is an estimate and does not measure the operational effect of absence timing, skill shortages, or workload redistribution.
- !It does not distinguish between short-term and long-term absence, or between different absence reasons.
- !It treats the entered daily cost as constant even though employee pay and employer costs may vary.
- !It does not separate voluntary, involuntary, retirement, internal transfer, or fixed-term-contract turnover.
- !A high or low percentage alone does not explain why absence or turnover occurred.
Common Mistakes to Avoid
Using opening or closing headcount instead of a representative average headcount when workforce size changed substantially.
Mixing annual absence data with quarterly leaver data or costs from a different period.
Including planned annual leave as absence when the internal reporting definition excludes it.
Entering total absence days in the average absence days per employee field.
Using calendar days rather than possible working days per employee.
Treating the cost estimate as a complete measure of productivity, service, morale, or employee experience effects.
Related Formulas
Frequently Asked Questions
What is the formula for employee absence rate?
Employee absence rate equals total absence days divided by total available working days, multiplied by 100. Total absence days can be estimated as average headcount multiplied by average absence days per employee.
What is the employee turnover rate formula?
Employee turnover rate equals the number of leavers divided by average headcount, multiplied by 100.
Why is average headcount used for turnover?
Average headcount gives a more representative workforce denominator when employee numbers change during the reporting period.
How do you calculate absence cost?
Multiply total absence days by the average daily employee cost used for the estimate.
How do you estimate staff turnover cost?
Multiply the number of leavers by an estimated replacement cost per leaver. The estimate may include selected recruitment, onboarding, training, cover, and productivity costs.
Can absence rate be calculated for a quarter?
Yes. Use average headcount, absence days, working days, leavers, and cost assumptions that all relate to the same quarter.
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