Employee retention rate measures the percentage of employees a company is able to retain over a given period of time, usually a year. To calculate a company’s employee retention rate, divide the total number of employees remaining at the end of the year by the total number of employees at the start of the year. A good employee retention rate varies for each company. A rule of thumb is, a high employee retention rate of around 80-90% is considered good news to a company as it signals that the company is able to retain talented and loyal employees.
Employee retention is an important aspect to success for any organisation. It measures the percentage of employees who stay in the company over a specific period of time. Retaining talented employees helps maintain a stable and experienced workforce, fosters a positive company culture, and boosts morale among team members. Employees who feel valued, supported, and engaged are more likely to stay with an organisation long-term, contributing to its success and growth. Therefore, investing in employee retention strategies, such as competitive compensation, professional development opportunities, work-life balance initiatives, and a positive work environment, is essential for any company looking to build a strong, loyal, and productive workforce.
Employee retention rates can help HR leaders identify areas for improvement and make data-driven decisions. Low retention rates in specific departments, roles, or locations can indicate underlying issues that need to be addressed. Low retention rates may also indicate areas of disengaged employees. By monitoring retention rates, HR leaders can then better anticipate and plan for future workforce needs or implement more employee engagement initiatives.
Here are the top 3 approaches to increasing retention:
Bowtie’s group medical insurance provides coverage for outpatient services, dental care, surgeries, and physical examinations, helping companies cater to employees’ diverse needs. The ProCare Series, in particular, enhances the more commonly used outpatient and dental coverage, allowing employees to freely choose their preferred clinics without any medical network restrictions.
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Employee retention rate is a key indicator of a company’s capacity to maintain a consistent workforce. It calculates the proportion of employees who remain with the organisation over a specific timeframe in relation to the total number of employees during that period. Analysing these rates provides insights into crucial factors affecting an organisation’s success.
This is particularly important for employees with specialised, highly sought-after skills who are frequently targeted by recruiters and difficult to replace. These individuals, often labelled as ‘high-potential employees,’ play a vital role in organisations due to their technical expertise and leadership abilities. Their retention is especially significant for a company’s long-term success and stability.
Low employee retention rates can severely undermine an organisation’s success and profitability. Low employee retention incurs substantial costs related to recruitment, onboarding, and training replacements, while also leading to losses in institutional knowledge, disrupted operations, and decreased productivity. It can also foster a sense of instability, eroding employee morale, engagement, and the company’s culture. Frequent employee churn damages the employer’s brand, making it challenging to attract top talent.
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