Simply put, your retention rate is determined by looking at the number of employees you started with and the number of those same employees who were there at the end of the period. For instance, you have 100 employees on January 1, and by December 31 st, seven of those employees have left that’s a turnover of 7% and an employee retention rate of 93%. Once you’ve set your timeframe, let’s say annually, using the calendar year, then you’ll need to look at how many people you have employed on January first and how many people have left your company by December 31 st. Some do it more frequently and have other metrics to consider, such as seasonal employees. Many companies do it quarterly and also calculate the retention rate annually. How to Calculate Employee Retention RateĬalculating employee retention rates starts by determining a timeframe to consider. Just as employee turnover rate is the percentage of employees who leave your business in a certain time period, employee retention rate refers to the number of employees that stay with your business in a set timeframe. Turnover happens anytime an employee leaves their employer, whether it’s voluntary or involuntary.Įmployee retention rates are a critical business metric that quantifies a company’s ability to retain its employees. It can also be defined as having a low turnover rate. Retaining employees is important because it saves a company time and money while boosting the company’s culture and job satisfaction.Įmployees are concerned about retention rates because they want to work for employers that have a proven track record of job satisfaction.Įmployee retention is a company’s ability to keep their employees rather than have them leave their job. Improving this one metric can make a dramatic difference in your business.Įmployee retention rate is a number that reflects a company’s ability to hold onto their employees.Įmployee retention rates are often calculated several times throughout the year. Learn more about how to calculate your retention rate, why retention is important, and how to boost retention for your company. It’s a big step toward running a successful company.Īre your employees sticking with your company? If they are, then it’s likely you have a high retention rate, which is great. Your company’s ability to hold onto great employees is important for everyone involved, from your newest hire to your customers to the owner of the business. Summary: Understanding your company’s retention rate can lead to a better work environment for the employees and higher profits for the business.
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