Retention generally refers to someone’s ability to grasp and continue to hold something. This can be a physical item, a concept, or general knowledge.
In business, this definition can be applied in a variety of ways.
- Retention could refer to an employee’s ability to receive training and remember it to apply it to a job.
- Retention might be the rate a company can keep employees, especially into a long-term career.
- Retention is the company’s income after paying for necessary expenses and costs.
Retention has many analytical uses. For example, suppose employee retention is low. This could indicate poor management, lackluster work environments, toxic work culture, poor compensation, or any other red-flag-based reasons. If you constantly lose employees and the sheer promise of “Oh, but you are doing so much good through this company” isn’t doing much, then perhaps it is time to take a stern look at how to increase retention.
Finally, financial retention is an integral part of financial peace for a company.