1.1 DEFINITION, MEANING, AND CONCEPT
Employee Retention involves taking measures to encourage employees to remain in the organization for the maximum period of time. Employee retention is a systematic effort by employers to create & foster an environment that encourages current employees to remain employed by having policies &practices in place that address their diverse needs. Retention is the process for members or volunteers remain active with the organization. Retention is not a particularly formal process. Instead it focuses on maintaining a welcome environment, member morale, and organizational process. MEANING:
Employee retention refers to policies and practices companies use to prevent valuable employees from leaving their jobs. It involves taking measures to encourage employees to remain in the organization for the maximum period of time.
How to retain valuable employees is one of the biggest problems that plague companies in the competitive marketplace. Replacing staff is obviously expensive. But in addition a company’s reputation is also at stake. No one feels confident dealing with an organization which cannot hold onto their employees. It suggests instability, poor management and a lack of good planning. Regardless whether an individual is let go or leaves on their own accord, more often than not the employee leaves with a bitter taste in their mouth. That feeling is taken with them – along with the skills they learned while working for you – and their sentiments are often repeated to future employers and their personal network. Reactively losing talented individuals can damage your company’s reputation for years to come.
Lastly, constant high turnover creates unrest in present employees. Positions which are made vacant create increased workloads for other staff members – often outside their position profiles. The sense of instability and frustration can cause work backlogs and slow productivity. Yet, perhaps more fundamentally, the employee’s lack of faith in the organization when they see their co-workers departing will affect productivity work levels in unbelievably negative ways.
ECP MODEL OF EMPLOYEE RETENTION:
In today’s economy, the bottom line in business is profits. The model use this underlined concept including employee retention in importance. E- Employee retention and employee satisfaction.
When you have satisfied employees (who are not caught up in the quagmire of bureaucracy and leave), they are more able to help the customer. C- Customer retention.
The more effective the customer services the greater the customer retention. P- Profit.
Employee Satisfaction + Customer Satisfaction = Increased Profits. The equation is simple from this point on. When we keep customers that are satisfied and continue to add more, the corporation has increased the likelihood of increased profits.
IMPORTANCE OF EMPLOYEE RETENTION:
•If an employee resigns, a good time and resource is required to look for new employees able to fulfil particular requirements. •The expected level of talent and efficiency is difficult to obtain in the new employee. •Sudden resignation of employee brings current business process to standstill. Hence new hiring becomes immediate necessity. •The resignation can also trigger a chain reaction in other workforce to look in the same direction of better opportunities. •At higher hierarchy level, retention is also important not to get shared some in-house information and strategies to other competitive firms. ADVANTAGES OF EMPLOYEE RETENTION:
The costs of high staff turnover can be incredible. Some of the substantial costs that can be reduced by employee retention include: 1. Recruitment costs
● from advertising to the time spent interviewing and sourcing. 2. Training costs
● Orientation materials and trainers’ time (ex. call center agents require on average 4 - 6 weeks or more of classroom training). 3....