function calculateRetention() {
var start = parseFloat(document.getElementById('startEmployees').value);
var end = parseFloat(document.getElementById('endEmployees').value);
var hires = parseFloat(document.getElementById('newHires').value);
var resultDiv = document.getElementById('retention-result');
var output = document.getElementById('rateOutput');
var interpretation = document.getElementById('interpretation-text');
if (isNaN(start) || isNaN(end) || isNaN(hires) || start <= 0) {
alert("Please enter valid numbers. Starting employees must be greater than zero.");
return;
}
// The standard formula: ((End – New Hires) / Start) * 100
// This tracks how many of the ORIGINAL employees stayed.
var originalRemaining = end – hires;
if (originalRemaining = 90) {
interpretation.innerHTML = "Excellent! Your retention rate is high, indicating strong employee satisfaction.";
} else if (retentionRate >= 70) {
interpretation.innerHTML = "Good. Your retention is stable, but there may be room for improvement in engagement.";
} else {
interpretation.innerHTML = "Warning: High turnover detected. Consider reviewing your workplace culture and benefits.";
}
}
How to Calculate Employee Retention Rate
Understanding employee retention rate is critical for any HR department or business owner. It measures the ability of an organization to retain its talent over a specific period. High retention rates often correlate with high employee morale, better productivity, and lower recruitment costs.
The Employee Retention Rate Formula
To calculate the retention rate accurately, you must exclude employees hired during the measurement period, as you are specifically looking at how many of your original staff members stayed. The mathematical formula is:
Retention Rate = [(Number of Employees at End of Period – New Hires During Period) / Number of Employees at Start of Period] x 100
Step-by-Step Calculation Example
Let's look at a realistic scenario for a mid-sized company over a one-year period:
Employees on January 1st (Start): 200
Employees on December 31st (End): 210
New Employees Hired during the year: 40
Using the formula:
Subtract new hires from the year-end total: 210 – 40 = 170 (These are the original employees who stayed).
Divide by the starting count: 170 / 200 = 0.85.
Multiply by 100 to get the percentage: 85% Retention Rate.
Why Does Retention Matter?
Retention isn't just a metric; it's a reflection of company health. Organizations with low retention rates face several challenges:
High Costs: Replacing an employee can cost 1.5 to 2 times their annual salary when accounting for recruiting, onboarding, and training.
Loss of Knowledge: When veteran employees leave, they take institutional knowledge and technical expertise with them.
Diminished Morale: Frequent turnover can cause remaining employees to feel overworked or uncertain about their own job security.
What is a Good Retention Rate?
While a 100% retention rate is ideal, it is rarely achievable or even healthy (as some turnover allows for fresh talent). Most experts suggest that a 90% retention rate is a strong benchmark across most industries. However, this varies by sector; for example, the hospitality industry typically sees much higher turnover than the government or healthcare sectors.
Tips to Improve Your Retention Rate
If your calculator result was lower than expected, consider these strategies:
Enhance Onboarding: Employees who have a structured onboarding experience are 58% more likely to stay with the company for three years.
Competitive Compensation: Ensure your salaries and benefits packages are in line with industry standards.
Professional Development: Provide clear paths for career growth and provide training opportunities.
Listen to Feedback: Conduct stay interviews to understand why people stay and exit interviews to understand why they leave.