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Employee retention rate
calculator

Work out how many of the people you started the year with are still here, and what keeping more of them is worth.

Your numbers

Your retention rate
 
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How is employee retention rate calculated?

Divide the number of your original employees still present today by your headcount 12 months ago, then multiply by 100. People who joined during those 12 months are excluded, because retention is about holding on to the staff you already had, not net headcount movement. Use a full 12 months so the result is comparable year to year.

How we calculated this

Retention rate is the number of people you had 12 months ago who are still here today, divided by the number you had 12 months ago, multiplied by 100. Anyone hired during the year is left out, so the figure measures how well you held the people you already had. We then take the people you lost, assume you could have kept one in four of them, and price those exits at 1.5 times average salary, the mid-point of Gallup's replacement-cost range. That second line is the money the retention rate is standing in for. The working, the assumptions and the sources follow.

New to the term? Read the plain-English definition of employee retention rate in the HR Glossary.

Your working
Assumptions
  • Only the starting cohort counts. New hires who joined during the 12 months are excluded, and so are their exits, so a business can show a healthy retention rate while churning through recent joiners. Run the turnover rate calculator alongside this one to see both.
  • Every departure counts the same: resignations, redundancies, retirements and dismissals. If you want a voluntary-only view, add the involuntary exits back into "still here" and run it again.
  • The avoided-cost line assumes one in four departures was preventable, which is deliberately under the 63% Work Institute reports (2025 Retention Report). It also uses 1.5 times salary for replacement cost, the mid-point of Gallup's half-to-two-times range. Both are conservative, so the money you could have kept is likely higher.
  • Base salary only. On-costs, lost knowledge, recruitment fees and the time colleagues spend covering the vacancy are excluded.
Sources

What to do about it

A retention rate is a result. It arrives after the decisions that produced it, which is why looking at it once a year mostly confirms what you already suspected. These steps are for whoever reports the number, whether or not they own the levers behind it.

1

Sort the leavers into left and lost

Of the people no longer here, which ones would you have fought to keep? That is your regretted attrition, and it is the only part of the rate worth a plan. Write the names down. A rate of 87% with two regretted exits is a good year; the same rate with fourteen is a problem.

2

Look at tenure at exit

If most of your regretted leavers went between 12 and 30 months, the problem is the job not being what was promised, or the growth running out. If they went after five years, it is a manager or a ceiling. The pattern tells you which lever to pull, and it is sitting in your HR system now.

3
Where a tool helps

Ask the stayers what would make them leave

The people who left have already told you with their feet. The people at risk are still here, and a short, regular pulse read by team catches drift months before it turns into a resignation. Exit interviews are polite and late; stay conversations are neither.

4

Open the internal doors

LinkedIn's Global Talent Trends found people stay 41% longer at companies with high internal hiring. Before you post the next role externally, ask who inside could grow into it. Every internal move is one fewer regretted exit and one fewer replacement cost from the line above.

5

Set the target by cohort and re-run it each quarter

Take the people you had on 1 July, and track how many are still here every quarter. Compare against last year's cohort rather than the national average, and put the dollar line from above next to it so retention has a value as well as a percentage.

Step 3 asks who is next.
That is what we read.

Compono Engage is an employee engagement platform that reads culture and climate alongside work personality, team by team, so the drift that precedes a resignation shows up while there is still time to act. Most HR systems record the exit and the date. Engage shows which teams are cooling and which people in them are least likely to put up with it, in a form a manager can use.

That is step 3 running all year, with the tenure pattern from step 2 already visible by team. The rate above tells you how many you kept. Engage tells you who you are about to lose, and the line above tells you what that costs.

See how it works
Compono Engage
8%+
reduction in turnover

Common questions

What is the difference between retention rate and turnover rate?

Retention rate measures how many of your starting staff stayed. Turnover rate measures how many people left across the whole 12 months, including newer hires. They are related but not opposites, and a business can have a healthy retention rate while still carrying high turnover among recent joiners.

What is a good employee retention rate?

It varies a lot by industry. Hospitality and retail run lower by nature, professional services tend to run higher. Rather than chasing a universal benchmark, compare your rate against your own previous 12-month figures and against peers of a similar size and sector.

How can we improve retention?

Start with the things research consistently links to staying. People stay about 41% longer at companies that hire internally (LinkedIn, 2020). Beyond that, the biggest gains come from spotting who is drifting early and acting on the specific reasons, rather than running a one-size offer at everyone.

This page is general information, not legal advice. We check figures annually and update them on a best-efforts basis, but employment rules change and we cannot promise everything here is current or complete. Before you act on it, confirm the detail with the relevant authority in your country or your own adviser. Last reviewed July 2026.

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Employee retention rate

The plain-English definition, with the calculators and rules that sit around it.

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