HR Glossary for HR Professionals

Glossary of the most common HR terms and acronyms to assist professionals navigating the ever-growing and ever-changing world of HR terminology.

Employee Retention

What is employee retention?

Employee retention is a company’s ability to keep its employees. It’s usually represented as a percentage.


For example, an annual retention rate of 80 percent indicates an organization kept 80 percent of its employees that year and lost 20 percent.

Employee retention strategies

For employers, employee turnover is costly. Increase company loyalty and reduce turnover by addressing these key employee retention factors:


  1. Giving employees the ability to do what they do best

The majority of U.S. employees report that it is “very important” to have a position that takes advantage of an individual’s unique skills and talents. Employees want to feel like their abilities are utilized and valued. 

  1. Providing work-life balance for employee retention

More than any other generation, Millennials express concern for “flextime,” the ability to self-manage time rather than being required to operate within the constraints of standard business hours.

  1. Offering stability and job security

Employees want to know that they will succeed if they commit to working with your organization. Structural elements such as brand reputation, market positioning, company purpose, and growth strategy strongly influence an employee’s decision to stay with a company. Communicate – and demonstrate – the long-term value your company offers so that employees can envision your company as part of their career trajectory.

  1. Significant increase in income

As one might expect, employees react positively to companies that reward quality work and company loyalty with salary increases. Introduce a standardized pay structure to your employees during the interview process alongside measurable steps that can be taken to reach certain goals. A clearly defined growth track and reward system illustrates the opportunity that exists within your organization and increases employee retention.

Employee retention rate

Usually calculated on an annual basis, employee retention rate is calculated by dividing the number of employees who have been in their position a year by the number of employees in the position a year ago. If a position was added during the year, it would be excluded from the calculation.

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