Calculating Employee Retention Rate

Employee Retention Rate Calculator

Calculation Result

0%

function calculateRetention() { var start = parseFloat(document.getElementById('startCount').value); var end = parseFloat(document.getElementById('endCount').value); var hires = parseFloat(document.getElementById('newHires').value); var resultArea = document.getElementById('resultArea'); var retentionValue = document.getElementById('retentionValue'); var retentionStatus = document.getElementById('retentionStatus'); if (isNaN(start) || isNaN(end) || isNaN(hires)) { alert("Please enter valid numbers in all fields."); return; } if (start <= 0) { alert("The number of employees at the start must be greater than zero."); return; } // Standard HR Formula: ((End – New Hires) / Start) * 100 var retained = end – hires; var rate = (retained / start) * 100; if (retained = 90) statusMsg = "Excellent! You have high employee loyalty."; else if (rate >= 70) statusMsg = "Healthy retention rate for most industries."; else statusMsg = "Your retention rate is low. You may need to review your workplace culture or compensation."; retentionStatus.innerHTML = "You retained " + retained + " out of the original " + start + " employees."; } resultArea.style.display = "block"; }

Understanding Employee Retention Rate

Employee retention rate is a critical HR metric that measures the ability of an organization to retain its talent over a specific period (usually a quarter or a year). A high retention rate typically indicates high job satisfaction, effective management, and a healthy workplace culture.

How to Calculate Retention Rate

The standard formula used by human resource professionals excludes new hires from the ending headcount to focus specifically on the original group of employees. This provides a clearer picture of how many people who started the period actually stayed.

The Formula:
[(Employees at End - Employees Hired During Period) / Employees at Start] x 100

Example Calculation

Imagine your tech startup has 50 employees on January 1st. Throughout the year, you hire 15 new people. On December 31st, your total headcount is 55 employees.

• Step 1: 55 (End) – 15 (New Hires) = 40 (Employees Retained)
• Step 2: 40 / 50 (Start) = 0.8
• Step 3: 0.8 x 100 = 80% Retention Rate

Why is this Metric Important?

1. Reduced Costs: Replacing an employee can cost 1.5x to 2x their annual salary in recruiting and training fees.
2. Institutional Knowledge: Long-term employees understand your systems, clients, and internal workflows better than newcomers.
3. Morale: High turnover can lead to burnout among remaining staff who have to pick up the slack, creating a "turnover contagion."