Employee retention rate is the metric used to measure and evaluate how successful a company is in retaining its employees. It reflects a business’s ability to keep its workforce consistent and committed. It’s calculated by taking the average number of employees at the end of each period, divided by the average number of employees at the beginning of the same period. This percentage represents the company’s average turnover rate. High employee retention rates are an indicator that your team members are engaged, safe, and supported—all factors that directly contribute to long-term success.