1. What is Employee Retention Rate?

The Employee Retention Rate measures the percentage of employees who remain with a company during a given time period. It's a key HR metric that indicates how well an organization retains its talent.

2. How to Calculate Retention Rate

The retention rate is calculated using this simple formula:

Where:

• Employees Retained — Number of employees who stayed during the period
• Total Employees at Start — Number of employees at the beginning of the period

Example: If you started with 100 employees and retained 85 after one year, your retention rate would be (85/100) × 100 = 85%.

3. Importance of Retention Rate

Details: Retention rate is crucial for understanding employee satisfaction, organizational health, and the effectiveness of HR policies. High turnover can indicate problems with company culture, compensation, or management.

4. Using the Calculator

Tips: Enter the number of employees retained and the total number of employees at the start of the period. Both values must be positive numbers, and retained employees cannot exceed starting employees.

5. Frequently Asked Questions (FAQ)

Q1: What's a good retention rate?
A: Generally, 90% or higher is excellent, 80-90% is good, and below 80% may indicate problems. However, this varies by industry.

Q2: How does retention differ from turnover?
A: Retention measures who stays, while turnover measures who leaves. They're complementary metrics (Retention = 100% - Turnover Rate).

Q3: What time period should I measure?
A: Common periods are annual, but you can measure quarterly or monthly for more frequent insights.

Q4: Should new hires be included?
A: Typically no - only count employees present at both start and end of the period for retention rate.

Q5: How can we improve retention?
A: Strategies include competitive compensation, career development, positive culture, work-life balance, and recognition programs.