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 for the organization as well as the employee. Employees today are different. They are not the ones who don’t have good opportunities in hand. As soon as they feel dissatisfied with the current employer or the job, they switch over to the next job. It is the responsibility of the employer to retain their best employees. If they don’t, they would be left with no good employees. A good employer should know how to attract and retain its employees. Retention involves five major things:

Compensation

Environment

Growth

Relationship

Support

Employee retention would require a lot of efforts, energy, and resources but the results are worth it.

Compensation
Compensation constitutes the largest part of the employee retention process. The employees always have high expectations regarding their compensation packages. Compensation packages vary from industry to industry. So an attractive compensation package plays a critical role in retaining the employees. Compensation includes salary and wages, bonuses, benefits, prerequisites, stock options, bonuses, vacations, etc. While setting up the packages, the following components should be kept in mind: Salary and monthly wage: It is the biggest component of the compensation package. It is also the most common factor of comparison among employees. It includes
o o o o

Basic wage House rent allowance Dearness allowance City compensatory allowance

Salary and wages represent the level of skill and experience an individual has. Time to time increase in the salaries and wages of employees should be done. And this increase should be based on the employee’s performance and his contribution to the organization. Bonus: Bonuses are usually given to the employees at the end of the year or on a

It also shows the employee that the organization cares about the employee and its family. Personal growth and dreams: Employees responsibilities in the organization should help him achieve his personal goals also. These incentives help retain employees in the organization's startup stage. legal assistance etc). Training and development: Employees should be trained and given chance to improve and enhance their skills. Employees’ priority is to work for themselves and later on comes the organization. If he’s not satisfied with his growth. It saves employees money as well as gives them a peace of mind that they have somebody to take care of them in bad times. etc. The important factors in employee growth that an employee looks for himself are: Work profile: The work profile on which the employee is working should be in sync with his capabilities. they’ll leave the organization for better jobs. If an employee can not foresee his path of career development in his current organization. use of a company cars. The profile should not be too low or too high. he’ll not be able to contribute in organization growth. discounts on company products. Long-term incentives: Long term incentives include stock options or stock grants. etc. leave travel concession. Economic benefits: It includes paid holidays. After retirement: It includes payments that an Employee gets after he retires like EPF (Employee Provident Fund) etc. Miscellaneous compensation: It may include employee assistance programs (like psychological counseling. Organization should not limit the resources on which organization’s success depends. These trainings can be given to improve many skills like: • • • Communications skills Technical skills In-house processes and procedures improvement related skills . Many employers fear that if the employees are well rained. Growth and Career Growth and development are the integral part of every individual’s career. Organizations can not keep aside the individual goals of employees and foster organizations goals. Health insurance: Health insurance is a great benefit to the employees.festival. there are chances that he’ll leave the organization as soon as he gets an opportunity.

This bitterness could be due to . confident and empowered. employee satisfaction surveys and by being in constant touch with the employees. Supervisor should support his subordinates in a way so that each one of them is a success. individual meetings. Management can support employees by providing them recognition and appreciation. The management is sometimes not able to provide an employee a supportive work culture and environment in terms of personal or professional relationships. Top management can also support its employees in their personal crisis by providing personal loans during emergencies. childcare services. et al. Support Lack of support from management can sometimes serve as a reason for employee retention. counseling services. Employers can also provide valuable feedback to employees and make them feel valued to the organization. employee assistance programs. The feedback from supervisor helps the employee to feel more responsible. There are times when an employee starts feeling bitterness towards the management or peers. Management should try to focus on its employees and support them not only in their difficult times at work but also through the times of personal crisis.• • C or customer satisfaction related skills Special project related skills Need for such trainings can be recognized from individual performance reviews. Thus employers can support their employees in a number of ways as follows:  By providing feedback  By giving recognition and rewards  By counseling them  By providing emotional support Importance of Relationship in Employee Retention Program Sometimes the relationship with the management and the peers becomes the reason for an employee to leave the organization. Employers can also support their employees by creating an environment of trust and inculcating the organizational values into employees.

the management should keep the following points in mind. not only among teams but in different departments as well. Relationship with colleagues: Promote team work. It is about managing people. To enhance good professional relationships at work. It leads to less satisfaction and eventually attrition. A supportive work culture helps grow employee professionally and boosts employee satisfaction. certifications. Try to make the current employees stay instead of recruiting new ones. availability of resources.many reasons. Relationship with the immediate manager: A manger plays the role of a mentor and a coach. Organizations should focus on managing the work environment to make better use of the available human assets. etc. Deliver what is promised. If an organization manages people well. open door policy. It is his duty to involve the employee in the processes of the organization. So an organization should hire managers who can make and maintain good relations with their subordinates. Show them that the organization cares and he’ll show the same for the organization. etc. Induce loyalty: Organizations should be loyal as well as they should promote loyalty in the employees too. Otherwise he’ll feel useless and will be dissatisfied. Create opportunities for their career growth by providing mentorship programs. Respect for the individual: Respect for the individual is the must in the organization. Promote an employee based culture: The employee should know that the organization is there to support him at the time of need. He designs ands plans work for each employee. Individual development: Taking proper care of employees includes acknowledgement to the employee’s dreams and personal goals. employee retention will take care of itself. Employees should know what the organization expects from them and what their expectation from the organization is. Recruit whole heartedly: An employee should be recruited if there is a proper place and duties for him to perform. An employee based culture may include decision making authority. educational courses. This decreases employee’s interest and he becomes de-motivated. Organization Environment It is not about managing retention. This will induce competition as well as improve the relationships among colleagues. People want to work for an organization which provides .

 Appreciation for the work done  Ample opportunities to grow  A friendly and cooperative environment  A feeling that the organization is second home to the employee Organization environment includes • • • • • • • • Culture Values Company reputation Quality of people in the organization Employee development and career growth Risk taking Leading technologies Trust Types of environment the employee needs in an organization • • Learning environment: It includes continuous learning and improvement of the individual. etc. It’s not only the cost incurred by a company that emphasizes the need of retaining employees but also the need to retain talented employees from getting . the answer is a definite no. clarity of work and responsibilities. o o o o o o • Lack or absence of such environment pushes employees to look for new opportunities. involvement in decision-making. challenging work. certifications and provision for higher studies. The environment should be such that the employee feels connected to the organization in every respect. Importance of Employee Retention Now that so much is being done by organizations to retain its employees. Work life balance includes: Flexible hours Telecommuting Dependent care Alternate work schedules Vacations Wellness Work environment: It includes efficient managers. supportive co-workers. and recognition. why is retention so important? Is it just to reduce the turnover costs? Well. Support environment: Organization can provide support in the form of worklife balance.

The unspoken negativity often intensifies for the remaining staff. Interruption of Customer Service: Customers and clients do business with a company in part because of the people. Goodwill of the company: The goodwill of a company is maintained when the attrition rates are low. Higher retention rates motivate potential employees to join the organization. customers. Regaining efficiency: If an employee resigns. And even after this you cannot assure us of the same efficiency from the new employee. the investment is not realized. While it is difficult to fully calculate the cost of turnover (including hiring costs. Co-workers are often required to pick up the slack. 2.poached. When the employee leaves. The Cost of Turnover: The cost of employee turnover adds hundreds of thousands of money to a company's expenses. The most common reasons can be:  Job is not what the employee expected to be: Sometimes the job responsibilities don’t come out to be same as expected by the candidates. Relationships are developed that encourage continued sponsorship of the business. Turnover leads to more turnovers: When an employee terminates. Loss of Company Knowledge: When an employee leaves. which could lead to potential customer loss. then good amount of time is lost in hiring a new employee and then training him/her and this goes to the loss of the company directly which many a times goes unnoticed. What Makes Employee Leave? Employees do not leave an organization without any significant reason. current projects and past history (sometimes to competitors). training costs and productivity loss). industry experts often quote 25% of the average employee salary as a conservative estimate. 4. 5. 3. he takes with him valuable knowledge about the company. When an employee leaves. 6. the effect is felt throughout the organization. . Unexpected job responsibilities lead to job dissatisfaction. the relationships that employee built for the company are severed. The process of employee retention will benefit an organization in the following ways: 1. There are certain circumstances that lead to their leaving the organization. Often much time and money has been spent on the employee in expectation of a future return.

 Job and person mismatch: A candidate may be fit to do a certain type of job which matches his personality. . Recognize and appreciate their achievements. seniors and management can make office environment unfriendly and difficult to work in. 4. can lead an employee to leave the organization. trust them and respect them. Hire the right people in the first place. • Employee Retention Strategies The basic practices which should be kept in mind in the employee retention strategies are: 1. seniors and management: Trust is the most important factor that is required for an individual to stay in the job. 5. • Compensation: Better compensation packages being offered by other companies may attract employees towards themselves. Have faith in them. • Lack of trust and support in coworkers. 3. compensation. then he won’t be able to perform it well and will try to find out reasons to leave the job. Nonsupportive coworkers. 9. Empower the employees: Give the employees the authority to get things done. Provide them information and knowledge. • Stress from overwork and work life imbalance: Job stress can lead to work life imbalance which ultimately many times lead to employee leaving the organization. growth and learning etc. Keep their morale high. • Lack of appreciation: If the work is not appreciated by the supervisor. If he is given a job which mismatches his personality. Create an environment where the employees want to work and have fun. No growth opportunities: No or less learning and growth opportunities in the current job will make candidate’s job and career stagnant. the employee feels de-motivated and loses interest in job. 2. • New job offer: An attractive job offer which an employee thinks is good for him with respect to job responsibility. 7. 8. 6. Make employees realize that they are the most valuable asset of the organization. Keep providing them feedback on their performance.

These practices can be categorized in 3 levels: Low. Medium and High Level. monetary and non monetary rewards)  Recognizing professional as well as personal significant events • • • Wedding gifts Anniversary gifts New born baby gifts . Low Level Employee Retention Strategies  Appreciating and recognizing a well done job  Personalized well done and thank-you cards from supervisors  Congratulations e-cards or cards sent to spouses/families  Voicemails or messages from top management  Periodic days off for good performance  Rewards (gift. certificates.

restaurants.• • • Scholarships for employee’s children Get well cards/flowers Birthday cards. anniversaries. rebates. dushera. discounts. hockey. promotions. etc Holiday parties and holiday gift certificates Occasional parties like diwali. etc. Retail store discounts Computer peripherals purchase discounts  Providing workplace conveniences o o On-site ATM On-site facilities for which cost is paid by employees laundry facility for bachelors Shipping services Assistance with tax calculations and submission of forms Financial planning assistance Casual dress policies Facilities for expectant mothers       o o o o Parking Parenting guide Lactation rooms Flexi timings  Fun at work o o o o o o o Celebrate birthdays. holi. celebrations and gifts  Providing benefits o o o o Home insurance plans Legal insurance Travel insurance Disability programs  Providing perks: It includes coupons. etc Organize get together for watching football. cricket matches Organize picnics and trips for movies etc Sports outings like cricket match etc Indoor games . retirements. museums. etc o o o Discounts in cinema halls.

mehandi. Occasional stress relievers o o o o o o o “Casual dress” day “Green is the color” day Handwriting analysis Tatoo. hair braiding stalls on weekends Mini cricket in office Ice cream Fridays Holi-Day breakfast  Employee support in tough time or personal crisis o o o o Personal loans for emergencies Childcare and eldercare services Employee Assistance Programs ( Counseling sessions etc) Emergency childcare services Medium Level Strategies for Employee Retention  Appreciating and recognizing a well done job  Special bonus for successfully completing firm-sponsored certifications  Benefit programs for family support  Child adoption benefits  Flexible benefits  Dependents care assistance  Medical care reimbursement  Providing conveniences at workplace  Gymnasiums  Athletic membership program  Providing training and development and personal growth opportunities • • Sabbatical programs Professional skills development .

o o Suggestion committees can be created Open door communication policy can be followed .• Individualized career guidance High Level Strategies  Promoting Work/Life Effectiveness  Develop flexible schedules  Part-time schedules  Extended leaves of absence  Develop Support Services  On-site day care facility etc.  Understand employee needs: This can be done through proper management style and culture  Listen to the employee and show interest in ideas • • • Appreciate new ideas and reward risk-taking Show support for individual initiative Encourage creativity  Encouraging professional training and development and/or personal growth opportunities: It can be done through: o o o o o o o Mentoring programs Performance feedback programs Provide necessary tools to the employees to achieve their professional and personal goals Getting the most out of employee interests and talents Higher study opportunities for employees Vocational counseling Offer personalized career guidance to employees  Provide an environment of trust: Communication is the most important and effective way to develop trust.

But some times these strategies are not used properly or even worse.  Hire the right people from the beginning: employee retention is not a process that begins at the end.o Regular feedbacks on organization’s goals and activities should be taken from the employees by:    Management communications Intranet and internet can be used as they provide 24X7 access to the information Newsletters. Because of which these strategies fail to achieve the desired results. 1. working . etc. When employees leave. These myths prevent the employer from successfully implementing the retention strategies. There are many myths related to the employee retention process. Proper training should be given to the managers on interview and management techniques. Let us learn about some of these myths. The employers should understand this and work out some other ways to make employees feel satisfied. boost employee morale hence achieve retention. Issues that are mainly the cause of dissatisfaction are organization’s policies and procedures. The basic purpose of these strategies should be to increase employee satisfaction. Money can make an employee stay in an organization but not for long. job responsibilities. But instead they should try to figure out the main reason behind it. They are the best source of networking. Employees leave an organization for more pay: Money may be the motivating factor for some but for many people it is not the most important factor. These myths exist because the strategies being used are either wrong or are being used from a long time. o o o o The new joinees should fit with the organization’s culture. Money matters more to the low-income-employees for whom it’s a survival issue. The factors more important than money are job satisfaction. notice boards. The process of retention begins right from the start of the recruitment process. wrong strategies are used. There are so many tactics and strategies used in retention of employees by the organizations. Retention Myths The process of retention is not as easy at it seems. The personality. Referral bonus should be given to the employees for successful hires. leadership characteristics of the candidate should be in sync with the culture of the hiring organization. management tries to retain them by offering more money. An internship program can be followed to recruit the fresh graduates. and individual’s skill development.

conditions. 4. When certain employees leave. recognition. 5. Attrition rates are considered to be beneficial in some ways: • • If all employees stay in the same organization for a very long time. respect. Management can assign extra responsibilities to their employees and appreciate them on the completion of these tasks. relationship with the supervisor and salary. greater control on the processes and authority to take decisions in their present job. whose continuation of service would have negatively impacted productivity and profitability of the company. etc. the company is benefited. Employees run away from responsibilities: It is a myth that employees run from responsibilities. This will induce a sense of pride in the employee and will improve the relationship between the management and the employee. the attrition in considered being healthy. growth opportunities and friendly supervisors. career growth and development. Loyalty is a thing of the past: Employees can be loyal but what they need is an employer for whom they can be loyal. They can generate work speedily and in volumes but can’t boost employee commitment. They are free of cost. Benefits of Attrition Attrition is not bad always if it happens in a controlled manner. This means if the ones who have left fall in the category of low performers. most of them will be at the top of their pay scale which will result in excessive manpower costs. meaningful responsibilities. growth. can’t be bought. Taking measures to increase employee satisfaction will be expensive for the organizations: The things actually required to improve employee satisfaction like respect. An employer or management that reacts well to the employee’s ideas and suggestions is enough for the employees to be retained. Employees look for variety. Cash incentives.2. recognition. The only concern is how organizations differentiate “good attrition” from “bad attrition”. is the main concern. The term “healthy attrition” or “good attrition” signifies the importance of less productive employees voluntarily leaving the organization. Incentives can increase productivity: Incentives can surely increase productivity but not for long term. . There is no reason for the employee to hop jobs if he’s satisfied with the employer. In-fact employees feel more responsible if they are given extra responsibilities apart from their regular job. respect. etc. appreciation. What really glues employees to their work and organization is quality work. volume work targets and speed awards are old management beliefs. achievement. 3. They want opportunities to learn and grow. Some attrition is always desirable and necessary for organizational growth and development. For such employees. Rather speed can hamper the quality of work produced.

The only positive point is that the realization has initiated action that will lead to cutting loss. the good employees can be given the share that they deserve. they leave mainly because of work related stress and dissatisfactions. This. Desirable attrition also includes termination of employees with whom the organization does not want to continue a relationship. It benefits the organization in the following ways: o It removes bottleneck in the progress of the company o It creates space for the entry of new talents o It assists in evolving high performance teams There are people who are not able to balance their performance as per expectations. especially in the middle of some big company project or venture. Even good attrition indicates loss as recruitment is a time consuming and costly affair. These companies are severely affected when employees check out.• New employees bring new ideas. as the rewards are limited. More and more companies have now realized the importance of a healthy work culture and have a gamut of people management good practices for employees to have that . lack potential for future or need disciplinary action. Retention Success Mantras Transparent Work Culture: In today’s fast paced business environments where employees are constantly striving to achieve business goals under time restrictions. in the longterm. is detrimental to organizational health. but when undesirable employees leave the company. Furthermore. Although employees most often prefer to stay with the same company and use their time and experience for personal growth and development. open minded and transparent work culture plays a vital role in employee retention. Some companies believe attrition in any form is bad for an organization for it means that a wrong choice was made at the beginning while recruiting. approaches. business pressures do not allow the management to over-reward the performers. • • • There are also some people in the organization who have a negative and demoralizing influence on the work culture and team spirit. abilities & attitudes which can keep the organization from becoming stagnant. Companies invest very many hours and monies in training and educating employees.

More importantly. Closed doors work culture can serve as a deterrent to communication and trust within employees which are potential causes for workrelated apathy and frenzy. Thus. Organizations need to be more flexible so that they develop their talented workforce and gain their commitment. The basic objectives of a QWL program are improved working conditions for the employee and increase organizational effectiveness. Employees comprise the most vital assets of the company. and retains its workforce. motivates. they are likely to leave because of stress and frustration. In a transparent environment while employees get a sense of achievement and belongingness from a healthy work environment. transparency in work environment discourages work-politics which often hinders company goals as employees start to advance their personal objectives at the expense of development of the company as a single entity. Suitable working time: Organizations are offering flexible work options to their employees wherein employees enjoy flexi-timings for dedicating their efforts at work. In a work place where employees are not able to use their full potential and not heard and valued. the company is benefited with a stronger. communication. pride and so on. A transparent work environment can serve as one of the primary triggers to facilitate accountability. could achieve a lot in their mutually beneficial dialogue. It induces responsibility among employees and accountability towards other peers. The elements that are relevant to an individual’s quality of work life include the task. administrative system and relationship between life on and off the job. responsibility. Providing quality work life involves taking care of the following aspects: Occupational health care: The safe work environment provides the basis for the person to enjoy working. social environment within the organization. The work should not pose a health hazard for the person. The employer and employee.ideal fresh work-life. reliable work-force harboring bright new ideas for its growth. It is believed that in a transparent work culture employees rigorously communicate with their peers and exchange ideas and thoughts before they are finally matured in to full-blown concepts. trust. . organizations are required to retain employees by addressing their work life issues. which gradually builds up trust and pride. the physical work environment. Quality of Work: The success of any organization depends on how it attracts. recruits. aware of their risks and rights.

but also it enhances a company's competitiveness. . Not only does QWL contribute to a company's ability to recruit quality people. A proactive approach can be adopted to reduce attrition. Directly. in a number of ways as follows: • Manage employee turnover: Employee turnover affects the whole organization in terms of productivity. such as autonomous work groups. QWL consists of opportunities for active involvement in group working arrangements or problem solving that are of mutual benefit to employees or employers. Managing the turnover. Employers can also support their employees by creating an environment of trust and inculcating the organizational values into employees. Providing employees salary at par with the other counterparts of above that what competitors are paying motivates them to stick with the company for long. Turnover costs should also be taken into consideration while framing these strategies. they provide support in terms of personal crises. The management can support employees directly or indirectly. which are essential in determining the company's competitiveness. managing stress and personal development. Supporting Employees: Organizations these days want to protect their biggest and most valuable asset and they want to do this in a way that best suits their organizational culture.Appropriate salary: The appropriate as well as attractive salary has always been an important factor in retaining employees. and motivated workforce. loyal. based on labor management cooperation. indirectly. job enrichment. and highinvolvement aimed at boosting the satisfaction and productivity of workers. Retaining employees is a difficult task. It requires employee commitment to the organization and an environment in which this commitment can flourish. Strategies should be framed in advance and implemented when the times arrives. People also conceive of QWL as a set of methods. Providing support to the employees acts as a mantra for retraining them. Management can support employees. Common beliefs support the contention that QWL will positively nurture amore flexible. becomes an important task. Providing quality at work not only reduces attrition but also helps in reduced absenteeism and improved job satisfaction. hence.

Optimize employee engagement: An organization’s productivity is measured not in terms of employee satisfaction but by employee engagement. Keeping them engaged is an important task. So. Feedback: Feedback acts as a channel of communication between the employee and his manager. Planed coaching sessions help an individual to work through issues. Employee satisfaction also comes with high engagement levels. . Engage the new recruits: The newly hired employees are said to be least engaged in the organization. The amount of information employees receive about how well or how poorly they have performed is what we call feedback. organizations should aim to maximize the engagement among employees. It suggests where the employee performance is effective and where performance has to improve. The fresh talent should be utilized to maximum before they start feeling bored in the organization. maximize his potential and return to peak performance. Employees are said to be engaged when they show a positive attitude toward the organization and express a commitment to remain with the organization. Coaching and mentoring: Employees whose work performance suffers due to poor interpersonal relationships or because of lack of interpersonal skills should be provided proper coaching by their superiors.• • • • Become employer of choice: What makes a company an employer of choice? Is the benefit it offers or the compensation packages it gives away to its employees? Or is it measured in terms of how they value their employees or in terms of customer satisfaction? Becoming an employer of choice involves following a road map which tells where to go as a brand. It is a dialog between a manager and an employee which acts as a way of sharing information about the performance.

So there is a need to encode and decode the message in the process. But such times are very rare. Positive recognition for good performance boosts up morale of employees and results in performance improvement to a higher productivity level. It is an opportunity for managers and employees to assess and identify career and advancement opportunities. employees may assume that they are performing productively or they may feel that the manager is satisfied with their performance. It helps employees to understand the effectiveness of their performance and contributes to their overall knowledge about the work Managers have tendency to ignore good performances of their employees. Studies reveal the performance tends be same or even decreases if no feedback is provided. It gives managers and employees a way to identify and discuss skills and strengths. Some managers do not provide any kind of feedback to their employees. Due to no feedback. However. feedback is necessary because: • • • • • • • It builds trust and enhances communication between manager and employee. It helps in identifying performance areas that need improvement and specific ways to improve them.Managers can provide either positive feedback or negative feedback to employees. Moreover this improvement is short term. . Providing no feedback may demotivate employees and may lead to employee absenteeism. Negative feedback obviously communicates manager’s dissatisfaction. Communication between Employee and Employer: Communication is a process in which a message is conveyed to the receiver by the sender. Input from manager’s side is necessary as it help employees to improve their performance and increase productivity. Positive feedback leads to employee retention and motivation. It acts as an opportunity to enhance performance by identifying resources for skill development. Thus. Positive feedback communicates managerial satisfaction. The message may be or may not be in a common format or language that both the sender and receiver understand. The process of communication is incomplete without the feedback. This feedback helps the employee assess his performance and identify the improvement areas. negative feedback sometimes make employee to put more efforts to improve his performance. It is believed that positive feedback is the only type of feedback that generates performance above the minimum acceptable level. Encoding and decoding also helps in the security of the message.

Nothing is hidden and shared with the employees. There are 3 categories of employees: • • • A: Who will leave their current employer in 3 years of their employment B: Who have a probability of leaving their current employer in next 3 years C: Who will stay with their current employer in the next 3 years Category A: These are the employees who lack communication with their employers. . well structured communication with their employers. Employees look for organizations where communication and process are transparent. Same applies to employee retention also.Communication is the solution to almost everything in this world. Straight-from-the-shoulder communication is what the employees need from their employers. Category C: These are the employees who have proper.

Employers also feel that the immediate supervisors are the most authenticated and trusted source of information for them. attrition costs companies 18 months’ salary for each manager or professional who leaves. Secondly. Intranet and many more So there should be effective communication across the organization and this communication should be two-way. This amounts to major organizational and financial stress. Newsletters. Exit interviews are an ideal way of recording and analyzing the factors that have led employees to leave the organization. Communication mediums • • • Open door policy: Organizations should support open door policies so that the employees feel comfortable and are able to express their doubts and feeling to their employers. the cost of employee turnover can be calculated. Frequent meetings and Social gatherings Emails. on an average. They allow an organization to understand the reasons for leaving and . This trust leads to employee loyalty and finally retention.Communication is also the way to win the employees trust in the organization. and 6 months’ pay for each hourly employee who leaves. Managing Employee Retention The task of managing employees can be understood as a three stage process: 1. According to a survey. This will help in assessing the whether the employee retention rates are healthy in the company. Understand why employees leave 3. Employees trust the employers who are friendly and open to them. Implement retention strategies Identify the cost of employee turnover: The organizations should start with identifying the employee turnover rates within a particular time period and benchmark it with the competitor organizations. Identify the cost of employee turnover 2. Communication alone can lead to unimaginable heights of employee retention. Understand why employees leave: Why employees leave often puzzles top management. So the organizations should hire managers who are active communicators. considering that one out of every three employees plans to leave his or her job in the next two years.

Implement retention strategy: Once the causes of attrition are found. and that they are kept aware of their likely career path with the organization The organization’s reward strategy reflects the employee drivers The leaving process is managed effectively Employers and Their Key Drivers to Attract and Retain Talent The Following table describes the Key Drivers to Attract and Retain Talent. The most effective strategy is to adopt a holistic approach to dealing with attrition.oriented culture NTPC . An effective retention strategy will seek to ensure: • • • • • Attraction and recruitment strategies enable selection of the ‘right’ candidate for each role/organization New employees’ initial experiences of the organization are positive Appropriate development opportunities are available to employees. Employers Procter and Gamble India Key Drives To Attract And Retain Talent o Early responsibilities in career o Flexible and transparent organizational culture o Global opportunities through a variety of exposure and diverse experiences o American Express (India) o o o o o o o Performance Recognition Strong global brand Value-based environment Pioneer in many people practices Learning and growth opportunities Competitive rewards Opportunity to grow. learn and implement Strong social security and employee welfare performance.underlying issues. However employees never provide appropriate response to the asked questions. a strategy is to be implemented so as to reduce employee turnover. So an impartial person should be appointed with whom the employees feel comfortable in expressing their opinions.

and respect 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 Performance-driven Rewards Its belief in “Growing our own timber” Comprehensive development and learning programs Flat organization. transparent. where performance could lead to very quick progression Challenging work context Competitive rewards Exhaustive induction and orientation program Organization philosophy and culture Job stability Freedom to work and innovate Company brand Open . and caring organization Management according to the managing with respect to guiding principles Training ad development programs Structured career planning process Global career opportunities Company’s brand as an employer Early opportunities for growth High degree of autonomy Value compatibility Innovative people program Company brand image Work ethics Learning and growth opportunities Challenging work assignments Growing organization Glaxo Smith Kline Consumer Healthcare o o o o Tata Steel o o o o o o Colgate Palmolive India o o o o o o o o o o o o o Wipro Indian Oil Corporation . caring fairness.o o o o o o o o o o Johnson & Johnson Strong values of trust.

while management and top-level supervisors earn an additional 50 percent of their annual salaries. Retention Bonus is one of the important tools that are being used to retain employees. A retention bonus plan is not a panacea. Although retention bonuses are becoming more common everywhere. the implementation of a system may take 18 months. Retention bonuses are generally vary from position to position and are paid in one lump sum at the time of termination. tenure and other factors.TCS o o o o o o The group brand equity Strong corporate governance and citizenship Commitment to learning and development Best in people practices Challenging assignments Opportunity to work with fortune 500 clients Retention Bonus Higher attrition rates within a particular industry have forced companies to use some innovative strategies to retain employees. depending on position. Retention bonus is an incentive paid to an employee to retain them through a critical business cycle. In some companies. However. non-management employees generally receive about 10 percent of their annual salaries in bonuses. It can also run for a particular project. so a retention bonus will be offered after 20 months. A project has its own life span. Retention bonuses have proven to be a useful tool in persuading employees to stay. While bonuses based on salary percentages are the generally used. As long as the project gets completed. some industries . For example. bonuses range from 25 percent to 50 percent of annual salary. some companies pay in installments as on when the business cycle completes. They need to give key people an attractive incentive to stay on through these transitions to ensure productivity. some companies choose to pay a flat figure. A retention period can run somewhere between six months to three years. the employees who have worked hard on it are entitled to receive the retention bonus. Employees are chosen for retention bonuses based on their contributions to management and the generation of revenue. According to a survey. Retention bonuses are becoming more common in the corporate world because companies are going through more transitions like mergers and acquisitions.

Retail/wholesale companies are the most appropriate to implement stay-pay bonuses. Or tell them before hand that their requirements can not be fulfilled. Early departures arise from the wrong recruitment process. Hire candidates who are actually suitable for the job.  Culture fit: Try to judge individual’s capability to adapt to the organization’s culture. internships etc. Hire Right Talent Employee retention starts with recruitment.  Hire appropriate candidates. If their requirements can be fulfilled only then promise them. tell the candidate what is expected from him. Don’t hire under qualified or clearly overqualified candidates. This is mainly to retain good employees and provide them a cash incentive to keep them motivated.  Discuss what the expectations of the employees are: Ask employees what they expect from the organization. followed by financial service providers and manufacturing firms. . To retain its key senior employees post merger with EDS Corporation. Attrition rate can be reduced if a right person is hired for a right job. Setting wrong expectations or hiding expectations will result in early leaving of employees. Mphasis is providing cash component based retention bonus plan for its employees. A drastic change in the culture may give a culture shock to the candidate. Companies of all sizes use retention bonus plans to keep knowledge employees retained in the company. Be realistic. Realistic preview of the job responsibilities can be given to the employment seekers by various methods like discussions. Here are a few ways to ensure how to hire the right talent for a particular job. trial periods.  Clearly discuss what is expected from the employee: Before joining the organization.are more likely than others to offer them. For this the employer should understand the job requirements clearly. Don’t show them an unrealistic picture.  Provide realistic job preview at the time of hiring: Mostly employees leave an organization because they are given the real picture of their job responsibilities at the time of joining.

There is a fear of hampering the image and reputation of the person who referred the candidate. pay attention to their aspirations. Managers and team leaders can reduce the attrition levels considerably by creating a motivating team culture and improving the relationships with team members. Referrals: According to the research. they also need to educate their managers about the realities on the ground. but leave because of what their managers’ do or don’t do. research has shown that people join companies. team outings etc. Standing up for the Team: Team leaders are closest to their team members.g. arranging a talk by the VP of Quality on career opportunities in the field of quality. just giving the extra responsibility does not help. Delegation: Many team leaders and managers feel that they are the only people who can do a particular task or job. they do not delegate their jobs as much as they should. When agents see the team leader standing up for them. A manager should focus on showing employees his career ladder. celebrations. However. Motivation does not necessarily have to come through fun events such as parties. Focus on future career: Employees are always concerned about their future career. assure challenging work. Providing coaching: Everyone wants to be successful in his or her current job. value the quality of work life and provided chances for learning have loyal and engaged employees. While they need to ensure smooth functioning of their teams by implementing management decisions. they will have one more reason to stay in the team. Managers often tend to escape this role by just coaching their employees. However. referred candidates stay longer with the organization. If an . Manager Role in Retention When asked about why employees leave. It is seen that managers who respect and value employees’ competency. However. This can be done in a following way: • • • • • • Creating a Motivating Environment: Team leaders who create motivating environments are likely to keep their team members together for a longer period of time. not everyone knows how. coaching is followed by monitoring performance and providing feedback on the same. Delegation is a great way to develop competencies. managers and team leaders play an active and vital role in employee retention. The manager must spend good time teaching the employees of how to manage responsibilities given to them so that they don’t feel over burdened. Therefore. one of the key responsibilities will be providing coaching that is intended to improve the performance of employees. Therefore. Extra Responsibility: Giving extra responsibility to employees is another way to get them engaged with the company. They can also come through serious events e. However. Therefore. low salary comes out to be a common excuse. Employees who look forward to these events and are likely to remain more engaged.

employee sees that his current job offers a path towards their future career aspirations. Therefore. then they are likely to stay longer in the company. . managers should play the role of career counselors as well.

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