Employee Retention Rate: 2025 Formula, Benchmarks & Free Calculator

This 2025 guide explains what employee retention rate is, how to calculate employee retention rate with a simple formula, and how to use a free online calculator or Excel template. You’ll also see how your results compare to current retention benchmarks by company size and industry.

TL;DR: Use the free employee retention rate calculator, get your retention rate in less than 30 seconds, compare it to 2025 benchmarks by size and industry, and access 25 proven retention strategies with templates from HarmonyHR.

Note: This guide is about employee retention, meaning how you keep people at your company. It does not cover the U.S. Employee Retention Credit (ERC) tax topic.

Free Employee Retention Rate Calculator (Instant Result)

Quick example

Example quick calc (Jan–Dec 2025):

• Employees at start of period: 200
• Employees at end of period: 186
• New hires during period: 20

Step 1. Remove new hires from the end headcount:
186 − 20 = 166

Step 2. Divide by start headcount:
166 ÷ 200 = 0.83

Step 3. Convert to %:
0.83 × 100 = 83.0% retention

Here's tip: Track retention every month and use a 12-month rolling chart so leaders can see trends over time, not just a single number. You can also compare retention with turnover using your dashboard or our guide "Employee Turnover in 2025: Meaning, Formula, Benchmarks & Ways to Reduce It".

Free Employee Retention Rate Excel Template (Download)

Prefer to work in a spreadsheet instead of just using an online calculator?

This free employee retention Excel template works for both monthly and annual employee retention rate tracking. It includes:

• a ready-to-use employee retention rate calculator (simple and adjusted formulas),
• a pre-built employee retention Excel template with monthly data,
• automatic turnover rate calculation,
• a lightweight employee retention dashboard with charts for leadership updates.

Use the template to:

• track employee retention rate by month and year,
• compare retention and turnover in one view,
• export charts for executive or board meetings,
• keep all your retention data in one place before you move to full HR software.

Download the free employee retention rate Excel template

It works in Excel or Google Sheets. When the template becomes too manual, many HR teams switch to HarmonyHR as their employee retention software to automate onboarding, leave, and retention dashboards by team and manager.

Employee Retention Rate Formula (With Quick Example)

What is employee retention?

Employee retention is the percentage of employees who stay at your company over a set period, like a month, quarter, or year.

It reflects how well you keep talent through:

• good onboarding,
• effective managers,
• growth and career paths,
• recognition and feedback,
• fair pay and benefits.

Retention is the opposite of turnover.

Base employee retention rate formula

If you want a simple version that doesn't adjust for new hires:

Employee retention rate = (Employees at end of period ÷ Employees at start of period) × 100

Use this if:

• you have very few new hires, or
• you're looking at a short period (like one month) and just need a quick directional view.

Adjusted retention rate formula (recommended)

Most HR leaders prefer the adjusted version of the employee retention rate formula. It excludes new hires and shows how well you kept your original team.

Employee retention rate = (Employees at end of period − New hires during period) ÷ Employees at start of period × 100

To calculate:

• Take your end-of-period headcount
• Subtract new hires who joined during that period
• Divide by your start-of-period headcount
• Multiply by 100 for a percentage

This method is easy to use across months and teams and simple to explain to leaders:

"Of the people who were with us at the start of the year, we retained 83%."

When to use which formula

1. Use the simple formula

Use the basic formula when:

• you have few or no new hires, or
• you're looking at a very short period (like one month) and just want a quick directional view.

2. Use the adjusted formula (recommended)

Use the adjusted formula when you want to:

• understand how well you've kept your original team,
• compare retention across teams, locations, and managers,
• measure the impact of programs like onboarding, learning and development, or pay reviews.

Cohort retention

You can also calculate cohort retention to focus on specific groups, such as:

• by role,
• by location,
• by manager,
• by hire date (for example, first-year retention for new hires).

This helps you quickly spot areas where employees are leaving more often.

What Is a Good Employee Retention Rate in 2025?

The right retention target depends on your company's size and industry, but there are helpful benchmarks.

Employee Retention Benchmarks in 2025 (by Company Size)

Employee Retention Benchmarks in 2025 (by Industry)

How to use these benchmarks

Instead of aiming for a single number, choose a target range that fits your situation (like 88–90% for mid-market tech companies).

Track how your retention rate changes over time, not just overall but also by function and manager.

Context & next steps

• Senior individual contributors and people with niche skills may have lower retention, especially in competitive job markets.
• Good managers and a structured onboarding process, such as a 30/60/90-day plan, usually have the biggest effect on first-year retention.

Employee Retention vs Turnover vs Attrition

When talking with leadership, it's important to know the difference between three terms:

• Retention is the percentage of employees who stayed.
  For example, "Our 12-month employee retention rate is 89%."
• Turnover is the percentage of employees who left (whether they chose to leave or not).
  For example, "Our annual employee turnover rate is 11%."
• Attrition means a natural drop in headcount without hiring replacements,
  for example:

• a hiring freeze,
• when a product line closes and departures aren't replaced.

In practice:

• Set up an HRIS/dashboard view where you can see:

• retention rate,
• turnover rate,
• attrition,
  with filters by team and manager.

• Discussing retention and turnover together makes it easier to explain the full picture to the business.

25 Employee Retention Strategies to Improve Your Rate

Below are 25 proven employee retention strategies, each with:

Impact: ☆ to ☆☆☆☆☆ (on 12-month retention)

Cost: $ (low), $$ (medium), $$$ (high)

Time: ⚡ (days), ⏳ (weeks), 🗓️ (months)

Primary metric: what to watch in your HRIS/dashboard

If you're using several retention strategies that are scattered in DMs, spreadsheets, or documents, it's a sign you should automate your HR processes.

See 7 small signals it's time to automate your HR process.

How HarmonyHR Helps Improve Employee Retention

HarmonyHR is employee retention software that helps you turn retention from stories into measurable, trackable workflows.

With HarmonyHR, HR teams can:

Onboarding automation

• Use ready-made 30/60/90-day templates by role
• Assign clear owners, due dates, and reminders
• Deliver a standardized, high-quality employee experience for all new hires

Global calendar & leave management

• Run a single global calendar for PTO, shifts, and local holidays across time zones
• Make PTO rules transparent and clarify who is available and when

RBAC & audit trails

• Set detailed role-based access controls ("who can change what")
• Keep a complete history of changesby role/country

Retention analytics & dashboards

• Track headcount, churn, and employee retention rate by team/manager/office
• Monitor time-to-productivity and cost trends
• Give leaders visual dashboards they can understand at a glance

Deployment options

• Cloud deployment for speed and simplicity
• On-premises / hybrid options for regulated industries or countries with strict data rules

Turn Your Employee Retention Plan Into Automated Workflows

If you're still tracking employee retention in spreadsheets or slide decks, HarmonyHR gives you one place to automate onboarding, leave, and retention analytics.

In a short session, we'll:

• map your current onboarding process and handoffs,
• identify the biggest retention blockers in your flow,
• set 90-day and 12-month retention targets by team,
• show how HarmonyHR, as employee retention software, turns these into automated workflows and dashboards.

See HarmonyHR in action

Book a live walkthrough and leave with a concrete, 90-day retention roadmap for your teams.

Related internal reading

• What is an HRIS? 21 must-have features & benefits (2025 guide)
• What Is an HR System and How to Implement It (2025 Guide)
• AI in HR 2025 and 2026: Best AI HR Tools, Real Use Cases & Future Trends

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