How to Calculate Employee Retention Rate & Boost Staff Satisfaction

The share of organisations reporting employee turnover levels of 20% or more hit a record high of 34% in 2025. For some, this increases up to 50% in the first 18 months. It’s no wonder 62% of HR professionals say retention is their biggest workforce challenge!

Low employee retention and high turnover lead to the loss of valuable organisational knowledge and skills. They also put significant pressure on a company’s financial resources, costing as much as 200% of an employee’s salary to find and onboard a replacement.

Want to tackle high turnover? Measuring and tracking retention throughout the year is a great first step. In this article, we’ll explain exactly how to calculate and improve your company’s employee retention rate.

How to Calculate Employee Retention Rate

Calculating employee retention rate involves identifying the number of employees still in your workforce and dividing this figure by the number of employees at the start of the period. But before we go into more detail, what does this metric show?

Retention rates demonstrate the percentage of employees who stay within your company over a specific time period. They help to measure the success of your talent management and engagement strategies, along with other key processes like recruitment and onboarding.

Follow these steps to calculate your retention rate:

• Choose a Time Period to measure, such as one year.
• Determine the Number of Employees at the start and end of this period.
• Calculate Employee Retention Rate using the following formula:

(Number of Employees at End of Period – Number of New Hires During Period) / Number of Employees at Start of Period

• Multiply this figure by 100 to give the percentage of employees who stayed throughout the period.

A good retention rate varies from company to company, but is generally considered to be between 85 to 90% or higher. It also depends on the industry and market conditions. The Australian aged care industry’s 10-year average retention rate is 41%, while the accommodation and food services market is much lower, for instance.

Compare these figures over time. If your retention rates are increasing, it shows that employees are satisfied and engaged. But falling rates highlight low satisfaction. From here, you can then begin to identify reasons why staff may be leaving and begin to tackle them.  

3 Ways to Boost Staff Satisfaction and Retention

Boost your staff satisfaction and retention rates by increasing employee engagement.

Highly engaged employees are 87% less likely to leave, since they’re more invested in the company’s mission and therefore feel a greater connection to its culture. 

To do this, you’ll need to understand why employees are leaving and also what encourages them to stay. Here are some key areas to consider:

1. Improve Your Onboarding Process

 71% of employees say they’ve been put off staying in an organisation if they had a poor onboarding experience. On the other hand, 52% of employers see higher retention rates after introducing stronger onboarding practices!

Effective onboarding, which covers the period between the offer acceptance and an employee’s first day, properly integrates new hires into the workplace culture. It ensures they feel ready to start their role with support and confidence, plus all the training materials, company handbooks, and IT systems they need. 

Employees who experience structured onboarding are 58% more likely to stay with a company for three years. One of the best ways to achieve this is by investing in good onboarding software. 

Platforms like Onboard Express streamline lengthy administrative tasks and leave more time for HR teams to focus on engaging new hires. All while maintaining compliance! Purpose-built onboarding software also:

• Enhances the Employee Experience: Secure online portals that keep all onboarding and training documents in one place offer a smoother onboarding experience. New staff can complete the process at their own pace, without feeling overwhelmed.
• Reduces Errors: Automated contract creation tools lower the risk of errors made through manual document assembly. Review and approval workflows also send these contracts straight to the relevant personnel, ensuring they’re signed quickly and accurately.

2. Invest in Training

Investing in your employees through thorough training programs from the very start highlights your commitment to their career progression. New hires who feel they have a future within your organisation are more likely to embrace its mission and culture in the long term.

Companies offering structured training programs also have a 218% higher income per employee than those without! 

Research into long-term employee success reveals that 81% of employees become overwhelmed during onboarding. 42% also think that work information is too scattered throughout different platforms.

These stats show the importance of delivering training in manageable chunks, tailored to each new hire’s preferred learning style. Try adding learning modules to your onboarding software, like Infinite Aged Care.

The residential provider was able to sync mandatory training sessions with its onboarding schedule through Onboard Express. This reduced onboarding from 50 to 13 working days and helped the organisation retain top aged care talent!

3. Prioritise Employee Wellbeing

Along with having a sense of purpose, supportive work environments are a key driver of employee retention, according to McKinsey employment studies. 

For many employees, this support begins with flexible working hours and options. Particularly since 79% say they’d be more loyal to their employers if flexible work were an option! Remote and hybrid options help to tackle stress and burnout, which are key drivers of workforce turnover. 

38% of new-generation workers also feel lost when knowing who to ask for answers or resources. Assigning new employees a mentor during onboarding ensures they have a dedicated person to address any first-day concerns that may cause them to leave their roles early.

Ready to Improve Your Employee Retention Rate?

Along with being a useful data metric for HR and recruitment teams, employee retention rate is an excellent tool for enhancing engagement and overall satisfaction. 

But retaining top talent in the long term begins before day one. It starts with a streamlined onboarding process, plus effective training and flexible working options that prioritise workforce wellbeing.

Book your Onboard Express demo today to learn more about integrating these employee retention strategies into your daily HR processes.