20 Metrics in 20 Days- Day 15: New Hire 1-Year Retention Rate

Day 15 in our series of 20 consecutive posts on HR metrics: New Hire 1-Year Retention Rate


New Hire 1-Year Retention Rate is the proportion of new hires in a given period that remained at the company for at least one full year.

Note: The date of hire for those included in this calculation must be at least 12 months in the past. See Additional Considerations below.


$latex {New\ Hire\ 1-Year\ Retention\ Rate\ = \frac{Total\#\ New\ Hires\ in\ period\ Staying\ Full\ Year}{Total\ \# New Hires\ in\ period}}&s=2$

Additional Considerations

We want to know what proportion of the new hires in a given period stayed with the company for at least a year.

To get an accurate measure, we therefore need to allow at least one year from the date of hire (first day of work) to pass for someone to be included in our measure.

For example, if it is May 1, 2019 then my measure of New Hire 1-Year Retention Rate can only include those with a date of hire before May 1, 2018. Anyone hired after May 1, 2018 and who is still with the company might still leave within their first year…we simply don’t know whether they stayed a full year because the year is not over.

This means you need to be very explicit in stating your sample selection period:

  • Pick a start date for your period
  • Pick an end date for your period
  • Make sure that end date is at least a year in the past.

Once you have your dates, total up the number of new hires in that period who stayed one year and the number of new hires in that same period.

Handling dates in R can be tricky for those new to R so check out this page from Hadley Wickham on Dates and Times in R

Why You Should Care

Everyone reading this could probably come up with 10 items in 2 seconds. Here are just a few of the big ones for me:

  • Hiring is expensive so a low first-year retention rate means more hiring and more expense
  • Training is expensive so when new hires leave, they’ve consumed resources without generating much value in return. This is bad.
  • Employee leave/stay decisions are an emergent property of the system as a whole. If the new people are running away it sends a signal to others in the organization that better options are available. This can create a positive feedback loop in which increased turnover signals better employment options, which leads to more exploring of options which can increase turnover…


Again, this is really a huge domain in itself so I will just highlight a couple of big ones:

  • Ask WHY they are leaving. Considerations include the following:
    • Job was not what was expected
    • Poor training
    • High stress
    • Inflexible hours/ work-life coordination
    • Bad management/ supervisor
  • Determine whether recruiters are honestly and accurately describing the job
  • Talk to those who have stayed and even flourished in those same roles. What makes them different? What characteristics do they have and can you align your hiring practices to find more of them?


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