08. Employee Retention
High employee turnover increases cost in resources,
recruiting, and time when replacing open positions. Expense to the organization
for recruiting a new employee costs half to 200% of the former employee’s
salary (Hebenstreit, 2008). The increased cost related to recruitment includes
advertising and overlapping of salary; making it difficult to maintain positive
employee culture and morale. High employee turnover also leads to missed
opportunities for meeting production matrices and budgets set within the
departments, adding additional cost to the organization. A report distributed
by the Society for Human Resource Management (SHRM, 2004) states that 75% of
employees are actively seeking a different job. This high percentage should
alert employers whose bottom line is dependent on employee productivity. The
survey shares that 43% are looking for a new job to receive better
compensation, 32% for better career opportunities and 22% are dissatisfied with
opportunities at their current job (SHRM, 2004). Organizations, which
understand this and develop strategies to addresses these concerns become
employers of choice (Dibble, 1999, p. 216). This means being an employer who
knows that workforce diversity, quality talent and relational growth determine
the stability of the workplace
We explored additional literature that suggest
measures to increase employee retention and explicates the employee selection
process. First, an organizations should establish a proficient communication
process. Leadership must effectively understand and operate within the five
levels of communication: intrapersonal, interpersonal, group, organizational
and intercultural in order to maintain a healthy work culture for its
employees, which is illustrated in table 1 (Bell & Martin, 2014). Second,
there must be transparency on the part of the applicant. This allows the
organization to examine the applicant and see if they will adopt the vision and
fit into the organization’s culture. Third, selection consists of employee
diversity, inclusion, integration, specific skills, certifications and
educational levels that are valued by both employee and the organization.
Finally, the organization should provide additional resources for employee
training and development to increase opportunities for their advancement. Our
purpose therefore is to provide strategies for employee retention.
RECOMMENDATIONS
In terms of strategies to ensure retention of high
performers, first, we recommend that an organization review its vision, mission
and core values to ensure “Strategic Intent” creates a culture where the
employee see their value and an opportunity to grow. This must be communicated
proficiently with clarity and transparency to maintain trust in the workforce.
Second, we recommend that managers realize that choosing diversity as part of
their workforce is no longer optional, but absolutely instrumental for any
organization’s success. The United States economy is no longer driven by
manufacturing goods as it used to be during the industrial revolution, but by
the service sector. In this sector, skilled workforce is drawn globally, and
therefore the knowledge of diversity, its traits and characteristics is a must.
It is worthy to note, the United States has become one of the leading nations
in the world, because of the melting pot effect, where talent and innovation
comes from various cultures. Managers must value and accommodate a diverse
workforce along with its unique characteristics by offering professional
development workshops that will not only enhance core job skills, but also soft
skills and emotional intelligence. In a multigenerational and multicultural
work environment, where employees of all backgrounds meet together; there must
be a common platform of respect and appreciation for everyone’s differences, in
order to build organizational morale and succeed as a company. Third, in order
to retain good employees, managers need to begin the hiring process with a
search for the right employee. In a time when employees are not always looking
for a job for life, we recommend organizations look at a few imperative points
to extend tenure of employees. One size does not fit all; different
personality’s measure different motivations for Person-Job and
Person-Organization fit. This applies across all realms: employee job title,
team, supervisor, organization and culture. The new employee should be
introduced to the culture of the organization during the hiring process.
Organizations should make it their mission to retain employees with specific
knowledge or educational level, credentials, and skills; these individuals may
go work somewhere else taking their skills with them. Extending tenure requires
motivation on both the part of the employee and the organization
Fourth, and finally we recommend developing a training
program for employees on all levels. It is also important to include outside
resources as a form to improve employee performance and productivity outcomes.
Training should be formal, job-related and available as an option for all
employees to choose. At the end of the day, we should be creating life-long
learners, who make an impact at every level as they choose to move up the
corporate ladder
References
Bell, R.L. & Martin, J. (2014). Managerial
Communication (First ed.). (D. D. DuFrene, Ed.) New York, NY: Business Expert
Press, LLC
Dibble, S. (1999). Keeping your valuable employees:
retention strategies for your organization's most important resource. Hoboken,
New Jersey: John Wiley & Sons, Inc.
Hebenstreit, R. P. (2008). A call to apply the
principles of the enneagram in organizations to attract, retain and motivate
employees. Enneagram Journal, 4-21
SHRM. (2004). New survey finds 75% of employees
looking for new jobs 'It's all about the money'. Alexandria: PR Newswire.
Retrieved from
http://www.prnewswire.com/news-releases/newsurvey-finds-75-of-employees-looking-for-new-jobs-its-all-about-the-money-75585522.html.
I woluld like to add a point to your comment. Staff retention is critical to an organization's success, as it helps to reduce employee turnover while also enhancing organizational effectiveness (Mohsen, 2007). This industry is committed to improving its competitiveness in order to meet global pressures and client needs.Depending on whether you have a low or high turnover rate, employee turnover can have a beneficial or negative impact on your organisation. Businesses that have a low turnover rate have a better reputation. A good staff turnover rate of roughly 10% indicates strong employee satisfaction, which helps attract top talent(Mohsen, 2007).
ReplyDeleteThere is a wealth of evidence that the retention of talented employees has been of serious concern to managers in face of the ever-increasing high rates and costs of employee turnover (Samuel and Chipunza, 2009). In response, managers worldwide have enforced HR policies to actively lessen employee turnover and promote retention (Hom et al., 2008).
DeleteAccording to Anwar & Abdullah (2021),Recruitment is the process of discovering and catching qualified or appropriate applicant to fill the vacant position. Highly agreed with this statement. It is indeed very challenging to choose the qualified and the right candidate for the position due the responsibility which the candidate would be given to take forward and conduct accordingly to achieve the targets set
ReplyDeleteYes Melan Boxall and Purcell (2003) stated that the big question here maybe which HRM practices are more likely to contribute to sustainable competitive advantage, and specifically staff retention (Mbugua et al., 2015, pp. 54-55)
DeleteAgreed. With the technology driven environment, human recourse needs to drive technologies, so there is a stiff competition in the market for employees and it is better to mange employee retention to the organization (Mathimaran & Kumar, 2017). There are 3-Rs related to employee retention, respect, recognition and rewards(McNeese-Smith, 1995). On the other hand, as an example Japanese workers maintain lifetime employment to the organization due to job security and seniority system(Abeggen, 1990). Kossivi at al (2016) also comes up with factors of employee retention as best benefits offered by organization.
ReplyDeleteYes Thushari. Employee turnover is important to address because high attrition can extensively affect companies, directly and indirectly, resulting in increased hiring and training costs, lost production, reduced profits and overall lower employee morale (Hayward et al., 2016).
DeleteAgreed with blog post. Even so, the human resource development (HRD) principle focuses on employee retention, reducing turnover costs, and improving HRD strategy. Turnover directly influences mitigating organization performance (Alateyah, 2018).
ReplyDeleteYes Amil basic employment needs occurred, is that motivation should occur through genuine job satisfaction, or employees become more likely to experience discontentment and dissatisfaction (Denton and Maatgi, 2016). Ali (2016)
DeleteAgreed. According Al-Shammari, Jefri and Prasad (1994), when talented employees are retained organizations can avoid the business instability. Further retention can be explained as to the capability of holding the employees you need for a longer period than competitors (Johnson, 2002, cited in Shaibu, Noor, Tirmizi & Bashir, 2009).
ReplyDeleteYes Jayashi Turnover intent is the probability that an employee will leave an organization (Mobley et al., 1978). Researchers measure turnover intent using specific time intervals, and they regard it as a choice concerning an individual leaving a current employer (Wong et al., 2015).
DeleteAccording to Sunil R. (2004) average company loses approximately $1 million with every 10 managerial and professional employees who leave the organization.
ReplyDeleteYes Suneera. Researchers suggested that positive turnover intentions remain correlated to actual voluntary turnover (Hancock et al., 2013), which makes this topic an important one for an organization’s managers to consider and to prevent since high turnover negatively affects businesses (Hayward et al., 2016).
DeleteAgreed, In fact, Long-term health and success of any organization depends upon the retention of key employees. To a great extent customer satisfaction, organizational performance in terms of increased sales, satisfied colleagues and reporting staff, effective succession planning (Das, B.L. and Baruah, M., 2013)
ReplyDeleteYes. Job satisfaction remains a complex topic due to national and cultural differences and the various components it encompasses and affects. Pan (2015), for instance, noted job satisfaction remains subjective and person-specific.
DeleteAgreed. A study by Kyndt et al, (2009) show a large positive contribution of appreciation and stimulation of the employee to employee retention. Leadership skills and seniority too have a positive relationship with employee retention in an organization. The study also reveals that individual differences influence employee retention.
ReplyDeleteYes Shanil. The contributions to job satisfaction and the results of employees liking their jobs remain broad. Umamaheswari and Krishnan (2015) suggested employee satisfaction could contribute to increased organizational commitment, reduced intent to quit, and ultimately increased retention rates. Various issues contribute to each of these factors. However, the relationships between each of these factors remain significant
DeleteAgreed. Further, employee retention is one of the major problems companies face in the competitive environment. The big business challenge is to align your goals with the growing demand for a balanced organizational climate that meets basic human needs and where work is synonymous with personal fulfillment and fulfillment (Teixeira & França, 2013).
ReplyDeleteIndeed, although retention and turnover research has experienced considerable theoretical expansion in the past few years (Holtom et al., 2008, p. 243), an overview of previous studies has indicated a lack of adequate research about the relationship between HRM practices and employee retention, particularly in the public & privat sector, as much of this discourse in literature is associated with business
DeleteAgreed, According to (Arthur, 2001), nowadays many organizations have understood that they must f aim on employee retention as one of the most critical business objectives in order to keep the organization which should be competitive and profitable. Training and development is the key organization strategy influencing on employee retention.
ReplyDeleteYes, here is a wealth of evidence that the retention of talented employees has been of serious concern to managers in face of the ever-increasing high rates and costs of employee turnover (Samuel and Chipunza, 2009). In response, managers worldwide have enforced HR policies to actively lessen employee turnover and promote retention (Hom et al., 2008).
DeleteAgreed with your points, Labour turnover defines as the rotation of employees in Labour market. Turnover in companies have not so far proved amenable to prediction (Abassi and Hollman, 2000).
ReplyDeleteYes. Worldwide, retention of skilled employees has been of serious concern to managers in face of high rates of employee attrition (Samuel and Chipunza, 2009, p. 410)
DeleteAgreed with your view, further the Employees will no longer tolerate what they do not like in their employment situation. They have the power in the knowledge of their abilities and confidence in their value in the marketplace. With greater loyalty to their career and their skills than to their employer, they move on. (Dibble 1999)
ReplyDeleteIn addition to your comment, organization provide more training programs to there advancement.
DeleteAgreed Chandana,
ReplyDeleteIn terms of labour relation Understanding what both labours and relationship mean and the impact each has on the organization critically effective to the organization's human resource management.As you mentioned, Employees join unions by expecting higher wages, better benefits, Safe work place, greater job security ( Shrestha,2012).
Leadership must effectively understand and operate within the five levels of communication: intrapersonal, interpersonal, group, organizational and intercultural in order to maintain a healthy work culture for its employees, which is illustrated in table 1 (Bell & Martin, 2014)
DeleteYes Agree Chandana, Managing for employee retention involves strategic actions to keep employees motivated and focused so they elect to remain employed and fully productive for the benefit of the organization (Samantha, 2012). comprehensive employee retention program can play a vital role in both attracting and retaining key employees, as well as in reducing turnover and its related costs (Benard, 2011).
ReplyDelete