04. EMPLOYEE RETENTION STRATEGIES

Figure 1 : Employee Retention


WHAT IS EMPLOYEE RETENTION?

Employee retention is an organization's ability to reduce or prevent employee turnover. Turnover is when your employees leave for any reason or better opportunities.

Employee turnover rates are based on the number of employees who've left your organization divided by the total average number of employees. Employee retention is the percentage of employees who stay at your company for a set period of time. The retention rate is the inverse of the turnover rate.

Improving employee retention means more of your current employees are choosing to stay at your organization instead of being your competitor.


Figure 2 : Importance of Employee Retention

IMPORTANCE OF EMPLOYEE RETENTION 

As a decision maker in you in your organization, you may think, you can always hire a replacement. But is it practical all the time? The time and energy that goes into employee retention really worth or not?

The short answer? Absolutely. Every effort you make to increase employee retention and decrease your employee turnover rate is 100% worth it for your finances, productivity, and staying ahead of the competition.

Here are a few reasons why employee retention matters.

  • Employee Turnover is Costly

Employee Turnover comes at a considerable cost. Although there's no industry standard for calculating the cost of employee turnover, but, A study conducted by the Society for Human Resource Management (SHRM) predicts that every time you replace a salaried employee, it costs the organization 6 to 9 months of their salary, on average.

The expensive costs surrounding the recruitment process, hiring, onboarding, lost productivity, and long-term training of a new employee take a big chunk out of an organization's overall budget—all because employee retention wasn't a priority.

  • Engaged Employees are Productive Employees

When organization invest time and energy to cultivate a more positive employee experience, it's likely the employees will be excited about the work they're doing every day. A motivated employee is a key component in the organization’s overall productivity and profitability. Consider the investment in productivity you're making with your employees by supporting their long-term employee satisfaction.The more engaged employees are at work, the more likely they are to perform well in several key performance indicators.

  • Your Competitors Benefit from Your Loss

 If you don't invest in employee satisfaction, your competitors might invest on them. With heightened competition for talent in today's job market, your current employees could be swayed to go elsewhere.

Without an incentive to stay, your employees' specialized experience and insider knowledge are ripe for the picking by other organizations in your industry.

Working towards retaining the employee will be the best solution to be ahead of your Competitors.  


Figure 3 : Key to Employee Retention

EMPLOYEE RETENTION STRATEGIES

A retention strategy is a plan organizations create and use to reduce employee turnover, prevent attrition, increase retention, and foster employee engagement. While some turnover is inevitable, building a retention strategy to prevent as much voluntary turnover as possible can save an organization time and money.

With sales to drive forward, products to launch, and clients to satisfy, it's easy to forget that the most valuable investment of your organization's time and resources isn't your products, investors, or even your customers—it's your talented employees who help you get the job done.


KEY ELEMENTS OF CRAFTING EMPLOYEE RETENTION STRATEGY 

  • Track your current retention rate before setting goals
  • Use tailored employee retention strategies
  • Offer flexible work options
  •  Develop and communicate clear company values and mission.
  • Foster a sense of community and belonging among employees.
  • Encourage open communication and transparency.
  • Promote diversity and inclusion through hiring practices and ongoing training.
  • Get frequent feedback from employees and managers
  • Evaluate your benefits package

CONCLUSION

Employee retention is a rewarding effort that pays for itself in your finances, productivity, and the overall success of your organization. Especially for small & Medium organizations that are ready to grow their workforce. Employee retention strategies will help to reduce the unnecessary workload of HR department & the lengthy process of recruitment too. 

when Organization ready to take charge of your employee retention efforts by offering employee benefits, the employees will take the organization to the next level effortlessly. 


REFERENCES

  • https://www.enrich.org/blog/The-true-cost-of-employee-turnover-financial-wellness-enrich
  • https://static1.squarespace.com/static/5a92f73789c172c13de6b650/t/5b8960d5562fa796578c9623/1535729880690/Employee-Retention_JenaBooher.pdf
  • https://www.gallup.com/workplace/236927/employee-engagement-drives-growth.aspx
  • https://www.shrm.org/hr-today/news/all-things-work/pages/to-have-and-to-hold.aspx
  • https://www.gartner.com/smarterwithgartner/digital-workers-say-flexibility-is-key-to-their-productivity#:~:text=Flexible%20work%20hours%20is%20key,them%20to%20be%20more%20productive

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