Employee retention refers to the ability of an organization to retain its employees or basically, the percentage of employees that stuck around.
Tracking your employee retention rate helps measure the success of new initiatives, as well as employee engagement tools and ideas.
Formula to calculate employee retention rate.
At the start of a period, a restaurant had 14 employees. The head chef retired a few weeks into the period. Towards the end of the period, they hired two dishwashers. Determine the restaurant employee’s retention rate.
At the start there were 14 employees.
When the chef retired, they remained 14 – 1 = 13 employees.
When two dish washers were hired, there were 13 + 2 = 15 employees.
Thus, the restaurant retention rate was 93%.