Determining the average number of employees examines the number of workers you have during a certain period of time. Because it is not economical to count the number of employees each day and then find an average, companies will look at the beginning number of employees and the ending number of employees for the period and then find the average number of employees. This calculation is used in employee-turnover rates to help a company find how quickly employees leave the company.
Count the number of employees at the beginning of the period. A period can be any length of time, such as a week, a month or a year. For example, assume that on Jan. 1, you have 400 employees.
Count the number of employees you have at the end of the period. In the example, assume that on Dec. 31, you have 410 employees.
Add the beginning number of employees to the ending number of employees, then divide by two. In the example, 400 plus 410 equals 810. Then 810 divided by two equals 405. So you have an average of 405 employees over a year's time.
Carter McBride started writing in 2007 with CMBA's IP section. He has written for Bureau of National Affairs, Inc and various websites. He received a CALI Award for The Actual Impact of MasterCard's Initial Public Offering in 2008. McBride is an attorney with a Juris Doctor from Case Western Reserve University and a Master of Science in accounting from the University of Connecticut.