What is Employee Retention ?
Employee retention refers to the various policies and practices which let the employees stick to an organization for a longer period of time. Every organization invests time and money to groom a new joinee, make him a corporate ready material and bring him at par with the existing employees. The organization is completely at loss when the employees leave their job once they are fully trained. Employee retention takes into account the various measures taken so that an individual stays in an organization for the maximum period of time. Importance of Retention
Manage Employee Turnover
Employers implement retention strategies to manage employee turnover and attract quality employees into the organization. Retention programs focus on the relationship between management and their workers. Competitive pay, benefits, employee recognition and employee assistance programs are all apart of a company's attempt to maintain employee satisfaction. Human resources specialists utilize feedback they receive from exit interviews and focus groups to improve employee relations and reduce turnover. Cost Effective
A company can significantly benefit from employee retention programs because of a direct effect on an employer’s bottom line. High turnover can be very expensive. According to the Society for Human Resources Management, “employee replacement costs can reach as high as 50 to 60 percent of an employee’s annual salary.” Strategies geared towards retaining good workers helps offset employee replacement costs and reduces the indirect costs such as decreased productivity and lost clients. Maintain Performance And Productivity
Employee retention practices help support an organization’s productivity. Recruiting and training new employees takes time. An unfilled position means work is not getting done. Even if a position is filled, there is still a learning curve most employees must overcome before their work becomes profitable. Taking the necessary steps to keep current workers satisfied with their roles will ensure productivity is not interrupted. Enhances Recruitment
Effective retention strategies often begin during the employee recruitment process. Employees are more inclined to remain with a company that fulfills the promises made when their employment offer was extended. Companies that provide a realistic view of their corporate environment, advancement opportunities and job expectations to new hires can positively influence employee retention. Increases Morale
Employees that enjoy what they do and the atmosphere in which they work are more likely to remain employed with their company. Retention strategies are important because they help create a positive work environment and strengthen an employee’s commitment to the organization. Strategies that target employee engagement, such as team-builders and community involvement, increase company morale and give employees a sense of pride in what they do. The procedure of Retention Management
The procedure of retention management consists of six steps: 1. Identification of the target and actual needs of the staff 2. Analysis of the fluctuation risk of the staff
3. The Analysis of factors of Motivation/Demotivation of the retention group 4. Identification of the targeted measures
5. Implementation of the measures
6. Evaluation of the measures
Step 1: Identification of target and actual needs of the staff The starting point is the corporate strategy and business objectives. The product, market or organisational goals of the company can help to identify strategic staffing needs and the strategic relevant skills of employees. Step 2: Analysis of the fluctuation risk of staff In step 2, the HR manager is interested in the degree of the fluctuation risk. First, it is important, to analyse the common portfolio of the potentials and performance of the employees. In large companies, this could be done through a management audit. In small...
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