Retention Rate
The percentage of employees who remain at an organisation over a given period, used as a measure of workforce stability and employee satisfaction.
Retention rate is calculated by dividing the number of employees who remain at the end of a period by the number employed at the start, expressed as a percentage. It is the inverse of turnover rate. High retention indicates that employees are satisfied, engaged, and see a future with the organisation. Low retention signals underlying problems with culture, management, compensation, or career growth.
Employee turnover is expensive. Research estimates the cost of replacing an employee at anywhere from 50% to over 200% of their annual salary, depending on seniority and role complexity — factoring in recruitment, lost productivity during the vacancy, and time for the new hire to reach full performance.
Remote-first companies tend to benefit from higher retention rates, as flexibility is one of the most valued employee benefits and one of the hardest to give up. However, retaining remote employees requires intentional investment: clear career paths, regular feedback, strong community, and equitable access to opportunities that are not disadvantaged by their remote location.