RETENTION
Employee Retention involves taking measures to encourage employees to remain in the organization
for the maximum period of time. Corporate is facing a lot of problems in employee retention these
days. Hiring knowledgeable people for the job is essential for an employer. But retention is even
more important than hiring. There is no dearth of opportunities for a talented person. There are
many organizations which are looking for such employees. If a person is not satisfied by the job he’s
doing, he may switch over to some other more suitable job. In today’s environment it becomes very
important for organizations to retain their employees.
The top organizations are on the top because they value their employees and they know how to keep
them glued to the organization. Employees stay and leave organizations for some reasons.
The picture states the latest statement
that corporate believes in “Love them or Lose them”
The reason may be personal or professional. These reasons should be understood by the employer
and should be taken care of. The organizations are becoming aware of these reasons and adopting
many strategies for employee retention.
In this section we are going to study about various topics related to employee retention, why is it
needed, basic practices, myths, etc. in detail.
Now that so much is being done by organizations to retain its employees, why is retention so
important? Is it just to reduce the turnover costs? Well, the answer is a definite no. It’s not
only the cost incurred by a company that emphasizes the need of retaining employees but also
the need to retain talented employees from getting poached.
The process of employee retention will benefit an organization in the following ways:
1. The Cost of Turnover: The cost of employee turnover adds hundreds of thousands of
money to a company's expenses. While it is difficult to fully calculate the cost of turnover
(including hiring costs, training costs and productivity loss), industry experts often quote 25% of
the average employee salary as a conservative estimate.
2. Loss of Company Knowledge: When an employee leaves, he takes with him valuable
knowledge about the company, customers, current projects and past history (sometimes
to competitors). Often much time and money has been spent on the employee in
expectation of a future return. When the employee leaves, the investment is not
realized.
3. Interruption of Customer Service: Customers and clients do business with a company
in part because of the people. Relationships are developed that encourage continued
sponsorship of the business. When an employee leaves, the relationships that employee
built for the company are severed, which could lead to potential customer loss.
4. Turnover leads to more turnovers: When an employee terminates, the effect is felt
throughout the organization. Co-workers are often required to pick up the slack. The
unspoken negativity often intensifies for the remaining staff.
5. Goodwill of the company: The goodwill of a company is maintained when the attrition
rates are low. Higher retention rates motivate potential employees to join the
organization.
6. Regaining efficiency: If an employee resigns, then good amount of time is lost in
hiring a new employee and then training him/her and this goes to the loss of the
company directly which many a times goes unnoticed. And even after this you cannot
assure us of the same efficiency from the new employee
What Makes Employee Leave?
Employees do not leave an organization
without any significant reason. There are
certain circumstances that lead to their leaving
the organization. The most common reasons
can be:
Job is not what the employee expected to
be: Sometimes the job responsibilities don’t
come out to be same as expected by the
candidates. Unexpected job responsibilities
lead to job dissatisfaction.
Job and person mismatch: A candidate
may be fit to do a certain type of job which
matches his personality. If he is given a job
which mismatches his personality, then he won’t be able to perform it well and will try to
find out reasons to leave the job.
No growth opportunities: No or less learning and growth opportunities in the current job
will make candidate’s job and career stagnant.
Lack of appreciation: If the work is not appreciated by the supervisor, the employee feels
de-motivated and loses interest in job.
Lack of trust and support in coworkers, seniors and management: Trust is the most
important factor that is required for an individual to stay in the job. Non-supportive
coworkers, seniors and management can make office environment unfriendly and difficult to
work in.
Stress from overwork and work life imbalance: Job stress can lead to work life
imbalance which ultimately many times lead to employee leaving the organization.
Compensation: Better compensation packages being offered by other companies may
attract employees towards themselves.
New job offer: An attractive job offer which an employee thinks is good for him with
respect to job responsibility, compensation, growth and learning etc. can lead an employee
to leave the organization.
Employee Retention Strategies
The basic practices which should be kept in mind in
the employee retention strategies are:
1. Hire the right people in the first place.
2. Empower the employees: Give the employees the
authority to get things done.
3. Make employees realize that they are the most
valuable asset of the organization.
4. Have faith in them, trust them and respect them.
5. Provide them information and knowledge.
6. Keep providing them feedback on their performance.
7. Recognize and appreciate their achievements.
8. Keep their morale high.
9. Create an environment where the employees want to work and have fun.
These practices can be categorized in 3 levels: Low, medium and high lev
Loyalty, long-term career prospects, job satisfaction, stress and perceived fairness influence
employee turnover. In today's tight job market, retention of current employees is more
important than ever.
Recognizing that retaining skilled, talented and trained employees is essential to providing
consistent and top-notch service to the end users of power transmission/motion control
products, the PTDA Employee Development Committee has created a guide to developing
an employee retention program that will work to keep your best employees satisfied and
fulfilled in their careers.
