The Importance of Retention Rate

A recent analysis of 32 million LinkedIn profiles showed that there was a 76% chance of an employee still being at a company 12 months later. Retention rate is an important metric for Human Resource Departments given that retaining talent generally benefits the company as a whole.

Our org chart software, OrgChart, expresses the retention rate metric as a Turnover Ratio. This can be used to drill down into different departments, divisions and managers for internal comparisons to assess management effectiveness and overall organisational health.

Another insight from the 2019 LinkedIn study showed employees that were internally mobile, whether it was a sideways move or a promotion, were much more likely to stay at their present company. OrgChart’s Tenure metric can be used to monitor not just the time an employee has spent at a company, but also their time occupying their present role. This allows tracking of possible job stagnation that could in turn lead to job dissatisfaction.

.The data also supported the old HR adage “People don’t quit their jobs, they quit their managers.” It’s a worthwhile endeavour to drill down into the retention rate of each manager to gain insight into their effectiveness. Studies have consistently shown that managerial effectiveness, including traits of trustworthiness and communication skills, contribute to higher employee retention.

Find out more on how to do a visual retention rate analysis by scheduling a free demo with one of our experts today.