Employee retention rate is the proportion of employees who remain with an organization over a specified period. For an engineering manager, it is a useful question to ask alongside hiring needs: how many people stay, and what might make leaving more likely? Here, employee retention is distinct from customer retention rate, which can be used as a business success metric. section 7.6 section 1.2.1
Look beyond the rate when deciding what to do:
- Make staying worthwhile. Clear performance expectations, career development, learning opportunities, recognition, and a supportive environment can improve the chances of retaining people. section 4.1.5 section 8.6
- If someone considers leaving, ask why. Explore concerns you can address, such as a role mismatch or compensation, while accepting that personal circumstances may be outside your control. section 8.4.2
- Consider the costs of departure. Attrition can mean lost knowledge, disrupted work, and the effort of filling a vacancy; a retention decision still depends on the employee’s circumstances. section 8.6 section 8.4.2
Compare the choices, not just the headcount
In one hypothetical comparison, replacing an engineer costs $30,000, while an estimated $10,000 investment could retain the existing employee. That makes retention worth considering, without assuming every departure can or should be prevented. Ask: what is driving departures, and which changes are within your control? section 8.3.3 section 8.4.2
