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Start a free trialIn a small business, you work with what you have. Every team member’s presence, every role big and small counts for a lot.
Employee retention rate is one of the metrics I look at very closely at Charlie. It shows me whether my employee engagement initiatives are working as they’re supposed to. I want to help build a team that grows together and stays together. That on its own is the foundation for any small business.
Your employee retention rate can show you all these things and more. Your employees may leave your organisation for all sorts of reasons that have nothing to do with you. Regardless, calculating your employee retention rate and understanding what factors are moving it one way or the other can help you see trends and patterns.
Your business will never be perfect, and neither will your employee retention rate. If you know it and understand it though, you can make it the best it can be, and build a company that your team members feel good about working for.
That’s what I hope to accomplish with this post, and show you how to calculate your employee retention rate and why they matter for your small business.
Your average employee retention rate is calculated as the percentage of employees who remain employed at your company over a given period, usually a year.
Employee retention rate as a metric shows you how effective your HR strategies are at improving your employee satisfaction. It quantifies how happy, engaged, and fulfilled they are at your organisation.
Here’s how you can calculate your employee retention rate in simple steps:
(No. of Remaining Employees/Initial Number of Employees)*100 = % Employee Retention Rate
Here’s an example. Let’s say you start the day with 50 employees. Over the year, 8 employees leave. Using this formula, your employee retention rate would be:
(42 remaining employees/50 initial number of employees)/100 = 84% employee retention rate
You can then refer to that figure as a benchmark for retooling your HR strategies and creating a stronger, more loyal team that stands behind you.
Figuring out your company’s employee retention rate itself is simple enough, but many factors can influence its direction and the impact they have on your small business.
When you’re a small business strapped for resources and time, an HR software like Charlie can do as much for you as a dedicated HR team can.
Charlie does away with a lot of the tedious and error-prone manual calculations that go into calculating your employee retention rate (that can be one of your HR KPIS). The advanced reporting features of the platform go beyond merely calculating your employee retention rate and help you analyze it with data points like headcount, tenure, and employee turnover rate.
If you use Charlie, you can automate all this data collection and turn it into actionable insights through HR dashboards that you can use to improve your employee retention strategies, understand why your employee retention rate is the way it is and be empowered to do something about it.
Your employee retention rate is a sign of your small business' success and overall health. That gives you a direction to head towards as you make strategic HR decisions to suit that make your company a more productive, better place to work.
Having access to an HR tool that simplifies the adding up and gives you insights into the factors affecting your employee retention rate. Its user-friendly database and automated data collection make all of this easy, so you can stop being a number cruncher and start making leadership decisions that matter.
Start a Charlie free trial today, and find out exactly what you need to do to make your employees stick around by your side.