Employee Retention

Employee Retention answers the question “What percentage of our employees working here on Date 1 were still working here on Date 2?” and it can have a huge influence on the customer experience and profitability of a business.

You may also be interested in Employee Attrition which is a related, but different metric.

With the costs to hire, onboard and train employees, and then waiting (often for months) for them to become fully proficient at their job, it can be commercially very draining for a business constantly recruiting replacement staff.

So after investing all that money, it makes pure economic sense that you’d like to hang onto them right?

Is there a difference between Employee Retention and Employee Turnover?

Technically yes, although many businesses use the two definitions interchangeably.

The difference can be quickly summarised by saying:

  • Employee Retention relates to people staying
  • Employee Turnover relates to people leaving

Whilst that may look like a pretty obvious distinction, the formula’s for calculating each one a quite different and can reveal additional insight.

So what is Employee Retention all about?

Employee Retention is about creating an environment/culture where the staff actually don’t want to leave your business.

Call centres, amongst other industries, are renowned for a higher than industry average Employee Retention figure of around 60% per annum.

So 4 in 10 people who start won’t be there in 12 months.

Whilst that can be a drain on any business, having high employee retention is also not good.

Hanging onto staff for too long can be problematic for some businesses and a symptom of other issues including a lack of promotional opportunities, lack of active performance management and so on.

How to calculate Employee Retention

Employee Retention needs to answer the question “What percentage of our employees working here on Date 1 were still working here on Date 2?”

The basic formula for employee retention is the following:

(# of employees who stayed at the company for the whole time period)/(# employees at the start of the time period) X 100


If 55 people were working at my company as of 1 December and 40 of those same people were still working at my company as of 31 December, my retention rate for the month of December would be the following: 40/55 * 100 = 72.72%

The problem with this formula is that it has not allowed for any new hires – as such, you may find employee attrition can provide you with the additional insight.

What is ‘best practice’ for retention in call centres in Australia?

The most recent industry released in 2019 confirmed that an average contact centre will lose 45% of its staff annually: 22% to external attrition (left the organisation) and 23% to internal attrition (moved to another internal department).

  • 38 % of contact centres have 100% retention after 1 month
  • 23% of contact centres have 100% retention after 3 months
  • 16% of contact centres have 100% retention after 6 months

The average tenure for a frontline call centre agent is 22 months.

Key drivers of Employee Retention

I’ve always found that the most important element of Employee Retention is Employee Engagement.

In simple terms, happy staff are more productive and stay longer in their jobs.

If you’d like some tips on Employee Retention you’ll find lots of interesting articles here:

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