Retention Rate Formula:
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The Employee Retention Rate measures the percentage of employees a company retains over a given period. It's a key HR metric that indicates how well an organization maintains its workforce and can reflect employee satisfaction and company culture.
The calculator uses the retention rate formula:
Where:
Explanation: The formula calculates what percentage of your original workforce remained with the company during the measured timeframe.
Details: High retention rates typically indicate good employee satisfaction, lower recruitment costs, and preserved institutional knowledge. Low rates may signal problems with company culture, compensation, or management.
Tips: Enter the number of employees retained and the total number at the start of the period. Both values must be positive numbers, and retained employees cannot exceed the starting total.
Q1: What's a good retention rate?
A: Industry standards vary, but generally 90% or higher is excellent, 80-90% is good, and below 80% may indicate problems.
Q2: How often should retention rate be calculated?
A: Typically calculated annually, but can be measured quarterly for more frequent monitoring.
Q3: How does this differ from turnover rate?
A: Retention rate shows who stayed, while turnover rate shows who left. They're complementary metrics.
Q4: Should seasonal workers be included?
A: Only if you're specifically measuring seasonal workforce retention. Typically excluded from standard calculations.
Q5: How can companies improve retention?
A: Competitive compensation, career development, positive work environment, recognition programs, and work-life balance initiatives.