How to calculate employee retention rate

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.

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.

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.

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.

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

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.

Cite this Article A tool to create a citation to reference this article Cite this Article

About the Author

Since 1992 Matt McGew has provided content for on and offline businesses and publications. Previous work has appeared in the "Los Angeles Times," Travelocity and "GQ Magazine." McGew specializes in search engine optimization and has a Master of Arts in journalism from New York University.

Try our awesome promobar!