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Turnover calculation4/27/2023 Divideĭivide the number of remaining employees by the total number of employees at the start of the time period. This means five employees left during the time period. The number of employees remaining on September 30 is 31. The employee headcount on October 1 is 36. You will use this value to determine the percentage rate. Once you have the total number of employees during the period, subtract the number of original employees who are left at the end of the period from the total number of employees you counted. Count only the employees who were working on the day your time period started, and leave out any employees who came on board during the middle of the period.įor instance, using the fiscal year example, assume you count 36 employees on October 1. Take a headcountĬount the number of employees you had at the start of your time period. Knowing the time period you want to measure allows you to calculate the appropriate number of employees.Īs an example, use a fiscal year, starting October 1 through September 30. This can be a fiscal year, a quarter or a six-month period for instance. To start, you must determine the time period you want to measure. The following steps provide a guide for you to calculate your employee retention rate: 1. The retention rate will appear as a decimal, which you can then convert to a percentage by multiplying by 100 or moving the decimal point two spaces to the right. (Number of original employees remaining at the end of the period) ÷ (total number of employees) = (percentage of retention) Using your final value from the first part, calculate the final retention rate with the last part of the formula: (Total number of employees at the start of the time period) – (the number of employees who left during the time period) = (the number of original employees who remain at the end of the time period) To calculate retention rate, use the formula: Related: 10 Recruiting Strategies for Hiring Great Employees Retention rate formula When employees remain in an organization for a long period of time, the organization reduces the costs associated with recruiting and hiring new employees. It can cost anywhere from half to two times an employee’s yearly salary to onboard a replacement. If you have high turnover, you can experience many hidden costs, including lower productivity and reduced work quality. The employee retention rate is an important metric because it allows businesses to evaluate the methods they use to train and keep qualified employees. Why is your retention rate calculation important? It can give you insight into the employee experience and help you recognize areas that have room for improvement. The retention rate allows businesses to determine the total number of employees they are able to keep. It’s often calculated on a yearly or quarterly basis. It looks at how many employees worked for your company at the start of the period compared to how many of those original employees are still there at the end of the period. What is employee retention rate?Įmployee retention rates represent the number of employees who stay within your company over a given period of time.
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