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Employee Retention Metrics You Should Be Tracking

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Employee Retention Metrics You Should Be Tracking

Millennials: the job-hopping people, are less interested in staying in their current jobs. As per a Gallup report, 21% of millennials are reported to have changed their careers within the past year.

With this shocking revelation in the market, employers continue focusing on employee retention. Nevertheless, just mapping the route to retain employees won’t suffice. In fact, as an employer, you must also know the employee retention metrics you should be tracking.

Why You Should Measure Employee Retention?

#1. Understanding your workforce dynamics

Measuring employee retention allows you to understand which employee leaves & when, and who stays. With the information, organisations can determine whether the top performers are staying or leaving.

#2. Identifying issues in time

Organisations can identify issues early and take appropriate action in time to correct the situation.

#3. Strategising

Measuring employee retention enables organisations to create an effective employee retention strategy after analysing the conditions.

#4. Saving money & resources

Focusing on employee retention measurement empowers organisations to work on retaining employees. Universally, companies that succeed at retaining their employees save themselves from spending money on hiring and training new employees.

Before we delve deeper into the details, understand what employee retention can do to your company:

    • Fosters improvement in the company’s culture.

    • Enables employees to develop strong workplace relationships.

    • Increases employee productivity.

    • Raises employee engagement levels.

    • Reduces costs.

    • Increases revenue.

    • Improves employee morale.

    • Creates better employee experience.

Now, you are prepared to read ahead. In this article, we define the employee retention metrics you should be tracking, and the reasons for doing so are the benefits mentioned above.

Common Employee Retention Metrics

1. Employee retention rate

The metric that lays the foundation for tracking employee retention is the employee retention rate. The term refers to the indication of a company’s ability to retain employees over a period of time.

A company could be successful if it welcomes new hires regularly. However, its success reduces to half if, on the other hand, it fails to retain its existing employees.

The employee retention rate is calculated by subtracting the number of employees who left from the total number of employees and dividing the remainder by the total number of employees. For conversion into a percentage, the number is multiplied by 100.

2. Voluntary turnover rate

The voluntary turnover rate is defined as the rate at which employees leave an organisation willingly. As a matter of fact, a low voluntary rate depicts that employees are happy with their organisation and enjoy working there.

To calculate the voluntary turnover rate, let’s say, ten members resigned from their jobs voluntarily out of 200 employees. You can divide ten by 200 and then multiply the number by 100, which would give you a voluntary turnover rate of 5%.

3. Involuntary turnover rate

The involuntary turnover rate is precisely the opposite of the second metric. Simplifying it, the term refers to the percentage of employees dismissed or laid off by the organisation. The higher the rate, the poor an organisation’s workforce planning and employees’ career development strategies.

You can calculate the rate in the same manner as mentioned for the voluntary turnover rate. The only change is dividing the number of employees dismissed or laid off from their jobs by the total number of employees. You can obtain the rate by multiplying the number by 100.

ALSO READ: Career Mobility: A Key To Attracting And Retaining Talent

4. Employee satisfaction rate

Employees who are well recognised and rewarded timely always stay satisfied and happy with their jobs. Not only this, an organisation that cares for employee development also nurtures satisfied employees.  As a result, they tend to stick to a particular organisation for a relatively longer duration.

Employers can measure employee satisfaction by asking the employees to rate the organisation on a scale of 1-10. The employees have to rate based on how likely they are to recommend you as an employer.

5. Average employee tenure

The tenure for which an employee stays with an organisation indicates their satisfaction with the organisation. Employers calculate the average employee tenure by averaging the tenures of all employees with the total number of employees. A company having employees stick to it for a longer duration enjoys a high employee retention rate.

The metric allows the HR departments to identify & address concerns that bother the employees. Thus, they leave.

6. Cost of employee turnover

Acquiring new talent is costlier than retaining the existing ones. Furthermore, a company with high talent acquisition and low retention rates can never succeed in the long run.

The formula to calculate the cost of employee turnover is summing up costs such as

    • Monthly salary,

    • Advertisement cost,

    • Background checks,

    • Cost of time invested by managers in conducting interviews,

    • Onboarding cost of new hires, and

    • Training cost

7. Engagement scores

Employee engagement is a metric that indicates whether or not an employee will remain with the company. Generally, HR personnel uses pulse surveys or engagement surveys to collect the required data.

A pulse survey consists of short questions to understand employees’ perceptions of the work environment. Additionally, employers can measure engagement by asking a series of questions. The surveys can be conducted quarterly or annually.

8. Flight risk

It’s not always possible to predict the future and tell which employee will leave the organisation shortly. Nonetheless, some aspects can be counted to identify the same, which are:

    • Underpaid employees

    • Employees who perceive they are not being paid adequately

    • Employees that have recently switched jobs

    • Employees that feel the lack of career development opportunities

By identifying these red flags, you can estimate the flight risk.


Knowing the employee retention metrics will not only help you understand the state of employee retention. While this goes above and beyond and helps you assess the effectiveness of your employee retention efforts. So take suitable measures now and make them work for the employees’ career development.

​At CGP Singapore, we have a comprehensive line of HR solutions that meet the needs of companies with distributed teams, including talent search, executive search, and contracting. Learn more about how we can help you bring great talents together across Asia.



1. What is the metric for employee retention?

Employee retention refers to organizations' practices and strategies to retain talented employees. The main objective is to reduce turnover during a specific period of time. The most common employee retention metrics are employee retention rate, retention rate per category, voluntary & involuntary turnover, employee satisfaction rate, and cost of employee turnover, and the list is endless.

2. What is an example of a retention process?

While there are many ways an organisation can retain its talented employees. However, as per the present circumstances, offering flexible work is the biggest example of an employee retention process. The employees remain productive and loyal to the organisation even when working from home. The reason is they feel valued by their employer as they can spend more time with their family when given the freedom to work from home.