Learn the employee retention formula and implement it to create a satisfying environment in the office
Employee retention is the ability to retain your employees as an organization. The retention process is represented by a simple statistic rate that allows the company to see the progress it's making. Many businesses will consider employee retention as relating to the efforts that the employer is putting to retain a bigger share of the workforce. In such a case, retention becomes the strategies rather than the outcome. A clear distinction is drawn between the high performing employees and top performers with efforts to retain employees targeting the highly contributing staff.
Understanding Employee Turnover
Employee turnover showcases deeper issues that have not been resolved which include low employee morale, lack of recognition, poor employee-manager relationships, the absence of a clear commitment among others. A lack of commitment to the organization can cause an employee to withdraw their attention and focus it elsewhere. The pay does not in any way play a large role in inducing the turnover, but it is typically believed. In any business setting, the goal of employers is to decrease the employee turnover by decreasing training costs, loss of their employees and recruitment costs among others important things. Employers can improve retention rates and decrease the associated costs of high turnover. They can seek positive turnover by maintaining only the employees who are high performers.
What does employee retention rate mean?
It is often referred to as the stability index because it is a way of measuring how stable business is. Any time the stability index is high, the company is doing great in most areas. If the stability index is low, the company is doing bad and most probably the employees have lost the morale which calls for attention.
Basic calculation for retention
The basic employee retention rate is determined by:
The number of workers with one or more years of service divided by the total number of staff on board a year ago. To obtain the retention rate percentage, multiply the answer by 100.
It is the work of the Human resource officers to keep up actual details of the actual number of employees on board. Keep clear records of the number of employees who have completed one year or more service with the company. Ensure that you get current updates from each department to stay well organized.
How to use these statistics
With the employee retention rate calculated, it's time to analyze the results so that the company can evaluate the current retention and turnover. Ensure that statistics from different departments are accurate and up to date to keep you supplied with the right info.