# What is Employee Retention Rate?

Retention rate measures how many employees stay over a set time. SMEs track it to understand turnover, plan hiring, and improve engagement strategies. High retention reduces costs and builds culture.

Source: https://faqtic.co/glossary/employee-retention-rate

## Why it Matters for SMEs

- Reduces hiring costs
- Improves culture
- Builds stability

## Example in Practice

Factorial reports retention rates by team.

## Frequently Asked Questions

### How is it calculated?

(Remaining ÷ Starting headcount) × 100.

### Good retention?

Above 85% yearly is common.

### Track with software?

Yes, via reports.

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