Question 1

What is employee retention rate?

Accepted Answer

Employee retention rate is the percentage of employees from a starting workforce group who remain employed through the end of a selected period.

Question 2

How is employee retention rate calculated?

Accepted Answer

Divide the employees from the starting group who remain by the employees at the start of the period, then multiply by 100.

Question 3

Is retention rate the opposite of turnover rate?

Accepted Answer

Not always. Turnover commonly uses departures divided by average headcount, while retention follows the workforce present at the start. Hiring during the period can make the measures non-complementary.

Question 4

Should new hires be included in employee retention rate?

Accepted Answer

New hires can be included in ending headcount context, but they should not be counted as retained employees from the starting workforce cohort.

Question 5

Can retention be calculated monthly?

Accepted Answer

Yes. The same cohort calculation can be used for a month, quarter, year, or another consistent period definition.

Question 6

Why should HR track retention and turnover separately?

Accepted Answer

The metrics answer related but different questions. Retention shows who from the starting workforce stayed, while turnover measures departures relative to average workforce size.

Employee Retention Rate Calculator