![]() The retention rate in this example is (15/17) x 100, or 88.2 %. So that’s 15 divided by 17 and then multiplied by 100. ![]() ![]() In this example, 15 of the original 17 people never left. Remember, retention is the number of individual people who remained employed during the time period. So, 17 people in the group, two retire, one quits and all three positions were filled with new hires. One of the two new people announced suddenly that the job just wasn’t for them, so that person left and was also replaced. However, two of them, a married couple, retired together in mid-year and moved away to be closer to their grandchildren. In another example, let’s say your sales and marketing team has 17 seasoned employees. Some centers reported 100% turnover in one year. A Quality Assurance & Training Connection study found the average call center agent turnover rate ranged between 30% and 45%. It’s good to break things up sometimes, especially if you have a problematic department with a lot of turnover that would negatively impact the retention rate of the rest of your business.įor instance, call centers are notorious for turnover. You can calculate a retention rate for your entire organization or just one area. That’s why tracking turnover helps complement the retention rate by tracking separations. Its shortcoming is that it doesn’t track the departures of those who came and went during the time period. In general, though, retention reflects the stability of a workplace. That person is retained organization-wide but represents a departure from a specific department. For instance, if a customer service employee is promoted to the sales team. Anyone added during that time is simply not counted since the goal is to track how many employees stayed or were retained from the first day.Īlso, there are internal transfers to be considered. When calculating retention, be sure to only include those employees who were employed on both the first and last day of the time period. So, the rates aren’t always directly inverse. But eight new people came into your organization, and four of them left. Remember, the 36 people never changed, they stayed employed and never left the organization. Turnover is (4/40) x 100, or 10%.īut what happens if four people leave and you replace them with four new people, who also leave? And then you replace those four people, all in the same 12 months? That’s a different number altogether. So in a department of 40 employees, four people left and were replaced. The formula for calculating turnover is the number of separations – four – during a specified period – 12 months – divided by the average number of employees – 40 – multiplied by 100. Here’s how the turnover rate works with the retention rate in the same period, using the same numbers from the retention example above. Turnover, on the other hand, is the rate of separations in an organization, divided by the average number of employees during the same time.Ĭalculating both rates will give you a more complete view of worker movement. The rates do complement each other, but they offer different views because they look at different things.Īs you see from the example, the retention rate measures how many employees were retained over a specified period. Many professionals use the terms “retention rate” and “turnover rate” interchangeably. ![]() So, if you’re like most HR people who’ve set out to master this retention discussion, please read on. There’s a lot more to know about employee retention rates than just how to calculate it. Your retention rate for the course of one year was 90%. So, in this example, you started the 12-month period with 40 employees and ended with 36. The basic formula for calculating retention is the number of individual employees who remained employed – let’s say 36 – for the entirety of the specified period – let’s say 12 months – divided by the number of employees at the start of that same period – let’s say 40 – multiplied by 100. If you’re searching for a simple and quick explanation of how to calculate your employee retention rate, you’ve come to the right spot.įor every HR pro who wants to make their organization a better place to work, here’s the answer you’ve been searching for: Employee retention rate formula ![]()
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