Tracking Employee Retention

Steven Cesare, Ph.D.

A landscaper from Georgia called me the other day to talk about compensation issues. During that conversation, I suggested the company offer divisional managers a monthly bonus for meeting employee retention goals. After differentiating between employee turnover and employee retention, I suggested the landscaper review the 2019 company payroll system in order to generate baseline data for establishing realistic goals. The following Table summarizes actual tracking of employee retention for Laborers and Foremen for each month during 2019.

	2019
	Laborers			Foremen
	Begin	End	Retention	Begin	End	Retention
January	11	9	82%	7	6	86%
February	12	10	83%	6	5	83%
March	11	11	100%	7	7	100%
April	16	12	75%	7	7	100%
May	12	9	75%	7	7	100%
June	13	11	85%	7	7	100%
July	13	11	85%	7	7	100%
August	11	11	100%	7	7	100%
September	13	11	85%	7	7	100%
October	13	11	85%	7	7	100%
November	11	9	82%	8	8	100%
December	10	7	70%	8	7	88%
Annual	11	6	55%	7	5	71%

The number in each cell under “Begin” represents the number of employees in that job classification who were on the company payroll on the first day of each month. The number in each cell under “End” represents the number of those same employees who were on the payroll system BOTH at the beginning of the month AND at the end of that same month.

As shown, 11 Laborers were employed by the company on January 1, 2019; of those 11 Laborers, 9 of them were still employed by the company on January 31, 2019. This “cohort” analysis, tracks only a defined group of employees for a given time period (January 1st through January 31st); it is not tracking all Laborers employed during January. Thus, the January 2019 Employee Retention Rate for Laborers was 82%.

Based upon the data shown in the Table, sometime during January, three additional Laborers were hired, which defines why there were 12 Laborers on the payroll on February 1st (Begin); of those 12 Laborers, 10 were still employed on February 28th (End). The February 2019 Laborer Retention Rate was 83%.

Similar methodology is in place for the Annual entry. As we already know, there were 11 Laborers on the payroll system at the beginning of January (Annual Begin). Of those original 11 Laborers, only 6 of them were still employed on December 31st 2019 (Annual End). The Annual 2019 Laborer Retention Rate was 55%; only 6 Laborers remained employed for the entire 2019 year.

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