EMPLOYEE RETENTION Employee retention is a process in which the employees are encouraged to remain with the organization for the maximum period of time or until the completion of the project. Employee retention is beneficial forthe organization as well as the employee.
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EMPLOYEE RETENTION
Employee retention is a process in which
the employees are encouraged to remainwith the organization for the maximumperiod of time or until the completion of theproject. Employee retention is beneficial for
the organization as well as the employee.
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Retention involves
Compensation
Growth
Support
Relationship
Environment
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COMPENSATION
Compensation constitutes thelargest part of the employee retention process. Theemployees always have high expectations
regarding their compensation packages.Compensation packages vary from industry toindustry. So an attractive compensation packageplays a critical role in retaining the employees.
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SALARY & MONTHLY WAGES
Basic wage
House rent allowance
Dearness allowance
City compensatory allowanceBonus
Economic benefits
Long-term incentivesHealth insurance
Miscellaneous compensation
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Growth and Career
Growth and development are the integral part of
every individual¶s career. If an employee can not foresee his path of career
development in his current organization, there are chances that he¶ll leave theorganization as soon as he gets an opportunity. The important factors in
employee growth that an employee looks for himself are:
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a) Work profile
b) Personal growth and dreams
c) Training and development
Training and development
Communications skills
Technical skills
In-house processes and procedures improvement relatedskills
C or customer satisfaction related skills
Special project related skills
Need for such trainings can be recognized from individualperformance reviews, individual meetings, employeesatisfaction surveys and by being in constant touch withthe employees.
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Support Support
Employers canalso support their employees by creating an environmentof trust and inculcating the organizational values intoemployees. Thus employers can support their employeesin a number of ways as follows
· By providing feedback
· By giving recognition and rewards · By counselling them
· By providing emotional support
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Relationship
A supportive work culture helps grow
employee professionally and boosts
employee satisfaction. To enhance good
professional relationships at work, the
management should keep the following
points in mind.
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Respect for the individual
Relationship with the immediate manager
Relationship with colleagues
Recruit whole heartedly
Promote an employee based culture
Individual development
Induce loyalty
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Organization Environment
It is not about managing retention. It is about managing people. If an
organization manages people well, employee retention will take care of itself.
Organizations should focus on managing the work environment to make better use of the available human assets.
People want to work for an organization which provides
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Appreciation for the work done
Ample opportunities to grow
A friendly and cooperative environment
A feeling that the organization is secondhome to the employee
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Organization environment includes
Culture
Values
Company reputation
Quality of people in the organization
Employee development and career growth
Risk taking
Leading technologies
Trust
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Types of environment the employee
needs in an organization Learning environment
Support environment- Organization can provide support in the form of work-life balance. Work life balance includes:
y Flexible hours
y Telecommuting
y Dependent care
yAlternate work schedules
y Vacations
y Wellness
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IMPORTANCE OF RETENTION
Is it just to reduce the turnover costs?
The process of employee retention will
benefit an organization in the following
ways:
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The Cost of Turnover: The cost of employee turnover addshundreds of thousands of money to a company's expenses. While itis difficult to fully calculate the cost of turnover (including hiring
costs, training costs and productivity loss), industry experts oftenquote 25% of the average employee salary as a conservativeestimate.
Loss of Company Knowledge: When an employee leaves, hetakes with him valuable knowledge about the company, customers,current projects and past history (sometimes to competitors). Oftenmuch time and money has been spent on the employee inexpectation of a future return. When the employee leaves, theinvestment is not realized.
Interruption of Customer Service: Customers and clients dobusiness with a company in part because of the people.Relationships are developed that encourage continued sponsorshipof the business. When an employee leaves, the relationships that
employee built for the company are severed, which could lead topotential customer loss.
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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. Theunspoken negativity often intensifies for the remainingstaff.
Goodwill of the company: The goodwill of a company ismaintained when the attrition rates are low. Higher retention rates motivate potential employees to join theorganization.
Regaining efficiency: If an employee resigns, then good
amount of time is lost in hiring a new employee and thentraining him/her and this goes to the loss of the companydirectly which many a times goes unnoticed. And evenafter this you cannot assure us of the same efficiencyfrom the new employee
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What makes employees leave
Employees do not leave an organization without any significant reason.There are certain circumstances that lead to their leaving theorganization. The most common reasons can be
Job is not what the employee expected to be
Job and person mismatch
No growth opportunities
Lack of appreciation
Lack of trust and support in co-workers, seniors and management
Stress from overwork and work life imbalance
Compensation
New job offer
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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.
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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 level.
<L
ow> <Medium> <High>
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Retention Myths
Employees leave an organization for more pay
Incentives can increase productivity
Employees run away fromresponsibilities
Loyalty is a thing of the past
Taking measures to increase employeesatisfaction will be expensive for theorganizations
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( Early responsibilities in career
( Flexible and transparent organizational
culture
( Global opportunities through a variety of
exposure and diverse experiences
( Performance Recognition
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( Strong values of trust, caring fairness, andrespect within the organization
( Freedom to operate at work( Early responsibility in career
( Training and learning opportunities
( Visible, transparent and accessible leaders
( Competitive rewards
( Innovative HR programs and practices
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( Performance-driven Rewards
( Its belief in ³Growing our own timber´
( Comprehensive development and learningprograms
( Flat organization, where performance couldlead to very quick progression
( Challenging work context
( Competitive rewards
( Exhaustive induction and orientationprogram
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( Company brand
( Open , transparent, and caringorganization
( Management according to the managingwith respect to guiding principles
(
Training ad development programs( Structured career planning process
( Global career opportunities
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( Company¶s brand as an employer
(
Early opportunities for growth( High degree of autonomy