1. What is the Retention Rate?

The Retention Rate measures the percentage of employees who remain with a company over a specific period. It's a key metric for assessing employee satisfaction, organizational stability, and HR effectiveness.

2. How Does the Calculator Work?

The calculator uses the retention rate formula:

Where:

• Total Employees — Current number of employees
• New Hires — Number of employees hired during the period
• Starting Employees — Number of employees at the start of the period

Explanation: The formula calculates what percentage of your original workforce remained with the company after accounting for new hires.

3. Importance of Retention Rate

Details: High retention rates typically indicate good employee satisfaction and lower recruitment costs, while low rates may signal problems with company culture or compensation.

4. Using the Calculator

Tips: Enter all values as whole numbers. Starting Employees must be greater than zero. The period (monthly, quarterly, yearly) should be consistent for meaningful comparisons.

5. Frequently Asked Questions (FAQ)

Q1: What's a good retention rate?
A: Rates vary by industry, but generally 90%+ is excellent, 80-90% is good, and below 80% may indicate problems.

Q2: How does this differ from turnover rate?
A: Retention rate focuses on who stayed, while turnover rate focuses on who left. They're complementary metrics.

Q3: Should voluntary and involuntary separations be treated differently?
A: For deeper analysis, yes. Voluntary turnover often reflects employee satisfaction, while involuntary may reflect performance standards.

Q4: How often should retention be measured?
A: Typically quarterly or annually, but more frequent measurement can help identify trends earlier.

Q5: What factors improve retention?
A: Competitive compensation, career development, positive work environment, recognition, and work-life balance all contribute.