How to Calculate Retention Rate for Employees

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Employee Retention Rate Calculator

Understanding Employee Retention Rate

Employee retention rate is a crucial metric for any organization, as it measures the percentage of employees who remain with a company over a specific period. A high retention rate indicates a healthy work environment, strong employee satisfaction, and effective management practices. Conversely, a low retention rate can signal underlying issues such as poor company culture, inadequate compensation, lack of growth opportunities, or ineffective leadership, leading to increased recruitment costs and decreased productivity.

Calculating employee retention rate helps businesses understand their stability and identify areas for improvement in their HR strategies. It's a key indicator of long-term organizational health and success.

How to Calculate Employee Retention Rate

The formula for calculating employee retention rate is as follows:

Retention Rate = ((Number of Employees at End of Period – Number of Employees Hired During Period) / Number of Employees at Start of Period) * 100

Alternatively, if you're looking for the number of employees who stayed without being rehired or added, the calculation can be simplified to:

Retention Rate = (Number of Employees Who Stayed / Number of Employees at Start of Period) * 100

Where:

  • Number of Employees at Start of Period: The total number of employees at the beginning of the timeframe you are analyzing.
  • Number of Employees at End of Period: The total number of employees at the end of the timeframe.
  • Number of Employees Hired During Period: The total number of new employees who joined the company during the timeframe.
  • Number of Employees Who Stayed: This is calculated by subtracting the number of employees hired during the period from the number of employees at the end of the period. (Number of Employees at End of Period – Number of Employees Hired During Period).

It's important to define your period clearly (e.g., monthly, quarterly, annually) and apply the calculation consistently.

function calculateRetentionRate() { var employeesAtStart = parseFloat(document.getElementById("employeesAtStart").value); var employeesAtEnd = parseFloat(document.getElementById("employeesAtEnd").value); var employeesHired = parseFloat(document.getElementById("employeesHired").value); var resultDiv = document.getElementById("result"); // Validate inputs if (isNaN(employeesAtStart) || isNaN(employeesAtEnd) || isNaN(employeesHired) || employeesAtStart <= 0) { resultDiv.innerHTML = "Please enter valid positive numbers for all fields. The number of employees at the start must be greater than zero."; return; } var employeesWhoStayed = employeesAtEnd – employeesHired; var retentionRate = (employeesWhoStayed / employeesAtStart) * 100; // Handle cases where the calculated retention might seem negative or unusually high due to data inconsistencies if (retentionRate 100) { // This could indicate an issue with the input data, but we'll cap it at 100% if calculated this way. // A more robust system might flag this for review. retentionRate = 100; } resultDiv.innerHTML = "

Retention Rate Result

" + "Number of Employees at Start: " + employeesAtStart.toFixed(0) + "" + "Number of Employees at End: " + employeesAtEnd.toFixed(0) + "" + "Number of Employees Hired: " + employeesHired.toFixed(0) + "" + "Number of Employees Who Stayed: " + employeesWhoStayed.toFixed(0) + "" + "Your Employee Retention Rate is: " + retentionRate.toFixed(2) + "%"; }

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