Retaining Top Talent: Metrics That Matter
Every business leader has been there. You think you’ve found the missing link for your team. They fit right in, begin contributing almost immediately, and deliver meaningful value to your business. Just when you start believing that they may be your next rising star, they leave. What happened and why?
Forbes has dubbed retention as the new recruitment in light of the current talent market and the ultra-competitive nature of many industries. The bottom line is that it’s far easier and more pragmatic to keep talented employees than constantly trying to replace them.
If you want to learn how to retain top talent, you need to listen to what the numbers are telling you. Here’s everything you need to know about the foundational metrics behind an effective talent retention strategy.
Key Employee Retention Metrics
There are many different employee metrics to track. It’s understandable if you don’t know where to start or are worried about getting lost in the noise. Here are some of the most important data points.
Employee Turnover Rate
Employee turnover rate reveals the percentage of employees who leave your organization during a specific time period. Divide the number of people who left by the average number of employees over that period. Multiply your results by 100.
Let’s say 10 employees leave, and you averaged 200 workers during that time span. Your turnover rate would be 5%. You’ll need to trend this figure over time to give a clear picture of when employees are most likely to leave. Examine turnover data in 30-, 60-, and 90-day increments. Look at annual data as well.
Voluntary vs. Involuntary Turnover
Voluntary turnover happens when people quit. Involuntary turnover occurs when you decide to part ways with a team member. Both can be bad, but each has different causes.
High voluntary turnover signals that you have a problem with engagement, leadership, or workplace culture. Conversely, if you are firing a lot of people, it can point to an issue with your hiring and recruiting process.
Retention Rate by Department or Role
Don’t just look at the big picture. It’s important to get granular. Some departments or roles may experience higher turnover rates than others, and that’s something you need to investigate.
For example, if your sales department has a much higher turnover rate than your marketing department, it may indicate a need for targeted retention strategies within sales.
Employee Engagement Scores
Employee engagement provides a snapshot of how connected and motivated employees are. You need to measure engagement at the individual and department levels. This metric will help you spot trends that correlate with retention.
If employees feel valued and have growth opportunities, they will be more engaged and less likely to quit. Employee engagement metrics are a great way to get a pulse check on the efficacy of your HR initiatives, without waiting for voluntary turnover to tell you that engagement is low.
Exit Interview Feedback
Numbers only tell part of the story. Exit interviews provide qualitative data that can complement your retention metrics. Understanding why your employees made the decision to leave will help you improve your retention and engagement strategies. Be aware of common themes that may emerge so you know where and how to improve.
Best Practices for Measuring and Analyzing Retention Metrics
Consistency holds the key to effectively using retention data. You can’t just periodically check in on the numbers. If you do, you’ll miss important trends and end up taking a reactive approach, instead of proactively addressing the data you’re seeing. Establish a clear framework for measurement and ensure everyone involved in collecting data follows a standardized process.
If you want to give yourself an edge in the fight to retain talent, invest in people analytics software like PeopleInsight by Hireroad. The platform allows you to track metrics over time and organize the data into visual charts that make the information easier to digest.
A holistic view of your retention strategy goes beyond looking at turnover metrics alone. Dashboard visualizations like the ones in PeopleInsight allow you to look at engagement data, cost of turnover, productivity, termination reasons, and other key retention metrics all in one place, to give you a comprehensive understanding of all the factors that play a role in employee retention.
Actionable Tips for Improving Retention
Here are some tips to create a great talent retention program.
Create Individualized Retention Plans
High performers are your most valuable assets. That means they deserve personalized retention plans. Give them career development opportunities and openly discuss how you want to support their long-term growth.
You should also consider creating department-specific retention plans. For example, if your sales team experiences unusually high attrition, you must first figure out why. Then, you could use a department-specific strategy to address the sales team’s concerns and create a more enjoyable workplace culture.
Invest in Your Team
People want to be part of organizations that value and invest in them. A 2024 survey revealed that 25% of employees will likely quit in the next six months because they aren’t being offered career development support.
You can address this concern by offering upskilling and mentorship programs that help employees grow within your organization. These initiatives don’t have to be solely focused on promotional opportunities. Many workers want to learn new skills and get better at their current roles.
Gather and Act on Employee Feedback
Regularly solicit feedback from your staff. You can make the process anonymous to encourage participants to be honest and transparent. Do your best to act on their suggestions and show that you are responsive to their needs.
You should gather feedback several times per year and ahead of any major transitions. For example, if you are researching new customer relationship management (CRM) platforms, get your team involved and find out what tools or features they would like to see in your next solution. This simple strategy can make them feel heard and valued.
Implement Recognition Programs
Employee award programs are a great tool for showing team members you appreciate them. Go beyond simple tactics like employee of the month programs. Do something that makes workers feel genuinely appreciated and valued.
For instance, you could create a competition for your sales team and award the top three performers of each month a gift card. This strategy recognizes their hard work and gamifies sales, which can be great for morale.