# The best way to average rates....

• Aug 7th 2012, 11:45 AM
kasperblue
The best way to average rates....
Hi i'm new to this forum and I hope I've posted this in an appropriate place!

I have 90 companies, all with a different number of employees. Each company has a given number of sick days so i've calculated the sick days per 1,000 employees for each i.e. 10.5 sick days per 1,000 employees. Now i'm trying to come up with an overall average as a bench mark.

If I average all the companies rates (i.e. add up all the rates and divide by 90) I get a different final value than if I sum all the employees and sum all the sick days and apply just one overall rate.

Can anyone tell me the best method to do, or which is the most accurate?

Many thanks
• Aug 7th 2012, 01:12 PM
HallsofIvy
Re: The best way to average rates....
The more accurate is the second. In fact, it is the only correct way to find such an average. If you have companies of different sizes, you have to "weight" the average by the size of the company. That is exactly what you are doing when you "sum all the employees".