What (Definition)
Average Headcount represents the average of headcount in a company during a time period or date range.
Why (Benefits)
Headcount is a metric that can change every day (as new employees can join and existing employees can leave the company). When we calculate HR metrics such as turnover rate, we need a single headcount number as a reference or baseline. This is where an average headcount metric will be useful.
How (Calculation)
Formula:
Average headcount during the period = (Starting Headcount + Ending Headcount)/2
Let’s take an example dataset where we have headcount calculated at the start of each month.
As we can see the headcount fluctuates monthly.
The headcount on January 1st, 2022, was 190 and headcount on Jan 1st, 2023, was 180.
The average headcount during 2022 is (190+180)/2 = 185.
