A lot of small businesses make the mistake of not tracking, compiling, and analyzing crucial employee retention data in their organization. They then get surprised when their employees leave in droves. If you don’t know what’s happening on the floor and can’t identify trends, then you’ll be constantly stabbing in the dark looking for a solution. Only when you have a clear view backed by raw data will you be able to make significant changes in your organization and monitor their effects. Let’s take a look at a few important employee retention metrics you should be looking for.
Overall Retention Rate
Simply put, your overall retention rate represents the number of employees who stay with your organization within a certain period. This will give you a general idea of how good you are at keeping employees.
To get this metric, you need to specify a period, which will usually be a year. You will then divide the number of employers you have at the end of the period by the number of employees you had at the beginning and multiply this number by 100.
If you had 50 employees at the beginning of the year and 45 at the end of it, divide 45 by 50, which will give you 0.9. This will give you a 90% retention rate once you multiply this number by 100. This is your overall retention rate.
Overall retention rate is closely related to employee turnover rate and is very similar, but it’s not exactly the same. If you want to learn more about employee turnover, G&A Partners has a great article. They explain exactly what it is, why it’s important that you track it, and what you can do to improve it.
Voluntary Turnover Rate
The voluntary turnover rate will give you an indication of work conditions on the floor. If you have unusually high voluntary turnover rates, it usually means that there is something wrong with work conditions, your company’s culture, or your processes. Your benefits may also not be competitive enough.
To get this metric, divide the number of people who left voluntarily by the end of a period by the number of employees you had at the beginning of that period multiplied by 100. If a company had 200 employees at the beginning of the period and 20 of them left voluntarily within that period, then you would get a 10% voluntary turnover rate. You should also follow up resignations with exit interviews and run regular surveys to understand why employees decide to leave.
New Employee Satisfaction
If you want to get a clearer view of how effective your recruitment, onboarding, and training processes are, you need to track new employee satisfaction. This will also give you a general idea of how welcoming and fulfilling your workplace is, and whether new hires are likely to stay.
To get this, you will need to survey your new hires shortly after they’ve been hired. Based on their responses, you can divide the number of employees who expressed satisfaction by the total number of employees you hired within a certain period and then multiply it by 100. If a company hires 12 employees within six months and eight of them express satisfaction, then you get a 66% satisfaction rate. You can then gather, compile, and track fluctuations over time and make adjustments accordingly.
These are only some of the metrics you should start monitoring in your organization, but these alone could make a major difference in how many employees you can keep. This will allow you to save money and time on recruitment and know what needs to be done to improve your workplace.