What counts as a good employee retention rate for your company

Executive overview

There is no single ideal retention rate — benchmarks vary by industry, company size, and role type. Hospitality and retail typically see 55–63%; finance and tech aim for 85–90%.

The right retention target is the one calibrated to your industry, role mix, and culture — not a universal number.

How retention rate is calculated

• Subtract employees who left from starting headcount, divide by starting headcount, multiply by 100
• Example: 200 employees, 30 leave → (170 ÷ 200) × 100 = 85% retention

Industry and role benchmarks

• Hospitality and retail: 55–63% (seasonal, high-churn by nature)
• Finance and tech: 85–90%
• Customer service roles: 50–60% (often seen as stepping stones)
• Project management and technical roles: 85–90% to protect continuity

Seven steps to set your ideal rate

1. Benchmark against competitors — research your industry average; beating it gives a talent edge
2. Account for company size — in a 15-person firm, two exits drop retention by 13%; size amplifies impact
3. Adjust by role type — sales tolerates higher turnover; technical and ops roles need more stability
4. Align with mission and culture — strong cultural fit or nonprofit purpose justifies a higher target
5. Factor in development opportunities — robust training and career paths correlate with higher retention
6. Credit work-life balance policies — flexible hours and generous PTO lift satisfaction and retention
7. Reassess regularly — review by role and department, use engagement surveys and exit interviews, benchmark annually