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What’s the Difference Between Retention and Turnover?
Though they're both related to employee management in a company, the concepts of ‘increasing retention’ and ‘lowering turnover' are indeed different.
When you think about ‘increasing retention’ and ‘lowering turnover,’ you might think they are measuring the same thing, right? Not exactly!
Retention and turnover are indeed different, and we’ll explain how in just a moment. Where they overlap is related to employee management in a company.
Retention refers to the ability of an organization to keep its employees over the course of time. In other words, retention is the measurement of how many employees stay with a company over a determined period of time. High retention rates are desirable as they indicate employee satisfaction, loyalty, and commitment to the organization.
Turnover, on the other hand, refers to the rate at which employees leave a company. Turnover is typically measured as a percentage of terminations against the total number of employees in a given period of time. High turnover rates can be detrimental to a company as they lead to increased recruitment and training costs, decreased productivity, and decreased morale among remaining employees.
Retention = The number of people that stay in a role over a specific period of time.
For example, if you have 50 technicians and 35 are employed for 3+ years, you have a 70% technician retention for 3+ years.
Turnover = The number of people that leave your organization in a given period of time.
For example, if you have 140 employees and 26 leave, you have an 18.57% turnover rate.
For dealership management, understanding the difference between retention and turnover is important because it can help you identify potential issues with your workforce and guide you to make the necessary adjustments. By tracking retention and turnover rates over time, dealership leaders can gauge the effectiveness of their employee management strategies and identify areas for improvement. For example, a high turnover rate may indicate that employees are dissatisfied with their job or the company culture. This may require changes to be made to improve employee engagement and retention. Similarly, a low retention rate may indicate that the company is failing to provide adequate opportunities for growth and development. This would require changes to be made to retain top talent. And of course, data has proven that training can help improve employee satisfaction rates.
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