Summary The soil ionization phenomenon effectively reduces the grounding electrode resistance. The existing methods to determine the soil ionization effect on the transient resistance of a grounding electrode are valid only for homogeneous soils. However, most soil structures are non‐homogeneous. Realizing the importance of the issue, this study proposes a hybrid method to incorporate the soil ionization effect on the transient resistance of a grounding electrode located in non‐homogeneous soil condition. The electromagnetic field approach is utilized to compute the ionized soil volume around the electrode to determine the equivalent radius of the electrode. A circuit‐based method of computing the grounding resistance of the electrode in non‐homogeneous soil conditions is proposed based on the per‐unit‐length distributed parameter method. The proposed method is validated by using an electromagnetic field‐based numerical solution for the non‐homogeneity effect of the soil on grounding electrode resistance. Copyright © 2015 John Wiley & Sons, Ltd.