How to calculate employee retention rate

Written by matt mcgew
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How to calculate employee retention rate
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Employee retention is a stability index that is commonly used by human resources departments to show the percentage of employees that kept their jobs over a given period of time. The employee retention calculation normally takes into consideration employees that left the company for both voluntary and involuntary reasons. You can calculate the employee retention rate for a company over a given period of time if you know some basic statistical information about employment over the time period.

Skill level:
Easy

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Instructions

  1. 1

    Find the total number of employees employed at the end of a particular period of time. For example, let's assume the total number of employees at the end of 2008 was 12,000.

  2. 2

    Find the total number of employees that quit or were fired during the time period. For example, the total number of employees that quit or were fired during 2008 was 1,000.

  3. 3

    Subtract the total number of employees that quit or were fired during the time period from the total number of employees employed at the end of that period. Continuing the example, 12,000 - 1,000 = 11,000.

  4. 4

    Divide the figure you calculated in Step 3 by the total number of employees employed at the end of the time period. Continuing the example, 11,000 / 12,000 = .9167

  5. 5

    Multiply the figure from Step 4 by 100 to get a percentage. Continuing the example, .9167 x 100 = 91.67 per cent. This figure represents your employee retention rate.

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