How Do You Calculate Retention Percentage in Your Organization? Seeking Insights and Methods

Calculating Retention Percentage

Another query that I have is how you calculate "Retention Percentage" in your organization? What period do you calculate, while calculating Retention Percentage? While calculating "Retention Percentage," do you also consider those new hires that have joined towards the end of the period?

For beginners, "Retention Percentage" is not the opposite of "Attrition Rate." For example, if the attrition rate of your organization is 18%, that does not imply that the Retention Percentage is 82%.

Kindly help me in understanding the way you calculate "Retention Percentage" in your organization.

Awaiting your reply.

Regards,
Sanjeev Sharma
(BLOG: http://sanjeevhimachali.blogspot.com/)

Hi, sir,

We are calculating the attrition by the number of employees left in the year divided by the total number of employees as of the date in the organization. This means if 100 employees left during the year and the number of employees as of March 31st is 1071, the attrition rate is 9.33%. However, generally, people calculate retention as the opposite of attrition. So, her retention rate is 90.7%.

Please let me know your views.

Thanks,
Subodh

Subodh, let others also share their views, but the retention percentage is not opposite to the attrition percentage. Just as not having sickness doesn't mean that you are healthy.

Regards,
Sanjeev Sharma

Dear Mr. Sanjeev,

For retention percentage - the methodology we have started to find what percentage of employees are retained after a specific period of time is mentioned below. This is especially to know for our old employees, or say those who have been with us for the last 6 months or more. It thus shows that if we could retain this group for more than 6 months, there would be no need for alarming changes to be made in our existing HR policies. This may exclude cases of natural, unpreventable attrition.

For this purpose, as an example - we take the strength as of 30th June and see how many of the old employees (i.e., working for more than 6 months with us or joined before 30th June) have left during the half-year period from July to Dec.

By doing this, it reflects or shows some meaningful data to introspect/analyze the actual reasons as to why we are unable to retain some of our senior employees if their retention level has dropped. I follow the same procedure after 6 months for new recruits separately.

This, of course, needs some more fine-tuning. Let us share something from others.

Suhas Garde

Hi, I am new to this site. Can anybody help me find out the retention rate in an Excel sheet with formulas? I would be very thankful.

With Regards,

Loveleen Kapoor