What are the key metrics to measure retention and turnover in your organization?

1 Retention rate

Retention rate is the percentage of employees who stay with your organization for a given period of time, usually a year. It is calculated by dividing the number of employees who remained at the end of the period by the number of employees at the start of the period, and multiplying by 100. A high retention rate indicates that your organization is able to retain its talent and reduce the costs and risks associated with turnover.

2 Turnover rate

Turnover rate is the opposite of retention rate, as it measures the percentage of employees who leave your organization for any reason, whether voluntary or involuntary, within a given period of time. It is calculated by dividing the number of employees who left during the period by the average number of employees during the period, and multiplying by 100. A high turnover rate suggests that your organization is facing challenges in attracting and retaining its talent, and may suffer from low productivity, morale, and reputation.

3 Voluntary and involuntary turnover rate

Turnover rate can be further broken down into voluntary and involuntary turnover rate, depending on the reason why employees leave your organization. Voluntary turnover rate is the percentage of employees who quit or resign, while involuntary turnover rate is the percentage of employees who are fired or laid off. These metrics can help you identify the root causes of turnover, such as poor performance, lack of fit, dissatisfaction, or external factors, and address them accordingly.

4 Retention cost

Retention cost is the amount of money your organization spends on retaining its employees, such as salaries, benefits, training, recognition, and incentives. It is calculated by adding up all the expenses related to retention and dividing by the number of retained employees. Retention cost can help you evaluate the return on investment of your retention efforts, and compare it with the cost of turnover, which includes recruitment, hiring, onboarding, and severance costs.

5 Employee satisfaction and engagement

Employee satisfaction and engagement are not metrics per se, but rather indicators of how happy and committed your employees are with their work and your organization. They can be measured by conducting surveys, interviews, feedback sessions, or performance reviews, and analyzing the results using various scales and methods. Employee satisfaction and engagement can influence retention and turnover, as well as other outcomes such as productivity, quality, innovation, and customer service.