What is Employee Retention?
Employee retention is the ability of an organisation to keep its employees over time. It is the inverse of attrition and a core measure of how well people management is working.
Last updated: June 2026Definition
Employee retention is the percentage of employees who remain with an organisation over a defined period. A 90% annual retention rate means 9 in 10 employees who started the year were still on the payroll at year-end.
Retention rate formula
Retention rate (%) = (Employees at end of period − Employees who joined during the period) ÷ Employees at start of period × 100.
Common retention drivers
- Compensation parity — being paid market-fair, especially for high performers.
- Manager quality — the #1 attrition driver in most exit interviews.
- Career progression — visible growth paths and internal mobility.
- Onboarding experience — first 90 days predict 1-year retention.
- Work-life balance and culture — flexibility, recognition, psychological safety.
How to improve retention
- Run stay interviews, not just exit interviews.
- Conduct compensation benchmarking annually for critical roles.
- Invest in first-90-day onboarding and manager training.
- Measure manager-level attrition; act on outliers.
- Track regretted vs unregretted attrition separately.
Retention analytics in Texlaculture
Texlaculture computes retention by tenure cohort, manager, function and location. Attrition prediction surfaces high-flight-risk employees so HRBPs can intervene before resignation.
Track retention with HR analytics
Texlaculture HR analytics surfaces retention drivers — tenure, manager, function, location.
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