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Employee Retention Strategy - A Managing Dilemma


In these changing times both the employee & employer are under tremendous
pressure to perform. There is fierce competition not only in the industry but also
across categories. This new liberalized cutting edge technology driven environment
has made employee retention mind-boggling. The fast pacing change across the globe
has made the new employee & employer relationship irreversible.


The entire process of keeping talent is built on a framework consisting of three heads:
The present times have seen a radical change in the style of work. The basic value
system of an individual has changed. In this competitive environment the corporate
body must reassert itself. The very entity called corporation is to be explicitly
understood. The organizational approach to staffing, its ethics policy, and
compensation package, fringe benefits even the pathos of the organization can be
turned towards its advantage. The manner in which a corporation portrays its image is
the beginning of the talent keeping
process. The employee was once treated merely as an asset, but today he is treated as
family as a unique individual. His aspirations, goals, ambitions, are all given pivotal
importance. This is the new employee arrangement that governs the market of today.
This is the very ground on which both the employee & organization meet. Sound
understanding of market structure, the emergence of intermediaries, their economic
implications, the government policy. This defines the very environment in which the
organization functions.

Employee Retention Strategy - A Managing Dilemma

Outline of project
A study on Employee Retention

The study intends to see the satisfaction level of the employees on the facilities
provided by the company and to measure their employee retention and how these
welfare measures boost the employee morale.

An industrial organization is substantially benefited, if it cares to develop general

individual attitudes in its personnel programmed that can effectively contribute to the
satisfactory level of the employees. If an organization appropriately discovers
attitudes and factors related to the job, it can take necessary steps to prevent bad
situations and thereby improve the retention level of the employees.

This report studies about the awareness and retention level of the employees and the
employee’s involvement of utilizing these welfare measures provided by the
The result supports the fundamental effect, that retention level of the employees
reflects the welfare schemes and benefits offered which drive towards motivation of
the employees and retaining them in the organization.

Employee Retention Strategy - A Managing Dilemma

Need for the study

Employees are the building blocks of any organization. The human resources are the
most valuable assets of the organization. Good human resources give the organization
an edge over the other business.

The business formula of any establishment depends mainly on the employees.

To understand the retention level of the employee towards the organization.

To bring out the needs that would create satisfaction in the job and in turn retain an

The survey on the topic Employee Retention provides guidelines to the management
to make policies and rules in regard to the welfare of the employees.

An effective Employee Retention Program is a systematic effort to create and foster

an environment that encourages employees to remain employed by having policies
and practices in place that address their diverse needs.

The study presents the actual feeling of the employees, both their positive and their
negative views about the organization, which will serve as a guideline for the
management to take steps awarding to improve the retention level of the employees.

Employee Retention Strategy - A Managing Dilemma

Employee Retention

What is employee retention?

The picture states the latest statement that corporates believe in

“Love them or lose them”

Employee Retention involves taking measures to encourage employees to remain in

the organization for the maximum period of time. Corporates are facing a lot of
problems in employee retention these days. Hiring knowledgeable people for the job
is essential for an employer. But retention is even more important than hiring. There is
no dearth of opportunities for a talented person. There are many organizations which
are looking for such employees. If a person is not satisfied by the job he’s doing, he
may switch over to some other more suitable job.

In today’s environment it becomes very important for organizations to retain their

employees. The top organizations are on the top because they value their employees
and they know how to keep them glued to the organization. Employees stay and leave
organizations for some reasons. The reason may be personal or professional. These
reasons should be understood by the employer and should be taken care of. The
organizations are becoming aware of these reasons and adopting many strategies for
employee retention.

Employee Retention Strategy - A Managing Dilemma

An effective Employee Retention Program is a systematic effort to create and foster
an environment that encourages employees to remain employed by having policies
and practices in place that address their diverse needs.

Employee retention is the process in which 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 for the

Employees today are different. They are not the ones who don’t have good
opportunities in hand. As soon as they feel dissatisfied with current employer or the
job, they switch over to the next job. It is the responsibility of employer to retain their
best employees. If they don’t, they would be left with no good employees.

Retaining the valuable

Keeping the right
employees for employees
a long period of
time AND movingamount
most appropriate them up the
Of time AND moving them up
value curve.
The retention curve

Employee Retention Strategy - A Managing Dilemma

Importance of employee retention

Now that so much is being done by organizations to retain its employees, why is
retention so important? Is it just to reduce the turnover costs? Well, the answer is a
definite no. 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 process of employee retention will benefit an organization in the following ways:

1. The Cost of Turnover:

The cost of employee turnover adds hundreds of thousands of money to a company's
expenses. While it is difficult to fully calculate the cost of turnover (including hiring
costs, training costs and productivity loss), industry experts often quote 25% of the
average employee salary as a conservative estimate.

2. Loss of Company Knowledge:

When an employee leaves, he takes with him valuable knowledge about the company,
customers, current projects and past history (sometimes to competitors). Often much
time and money has been spent on the employee in expectation of a future return.
When the employee leaves, the investment is not realized.

3. Interruption of Customer Service:

Customers and clients do business with a company in part because of the people.
Relationships are developed that encourage continued sponsorship of the business.
When an employee leaves, the relationships that employee built for the company are
severed, which could lead to potential customer loss.

4. Turnover leads to more turnovers:

When an employee terminates, the effect is felt throughout the organization. Co-
workers are often required to pick up the slack. The unspoken negativity often
intensifies for the remaining staff.

Employee Retention Strategy - A Managing Dilemma

5. 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.

6. Regaining efficiency:
If an employee resigns, then good amount of time is lost in hiring a new employee
and then training he/she and this goes to the loss of the company directly which many
a times goes unnoticed. And even after this you cannot assure us of the same
efficiency from the new employee.

Employee Retention Strategy - A Managing Dilemma

3 R’s of retention management


Retain &



By recognizing an employee a manager reinforces productive behavior, builds
the individuals self-esteem, and makes them feel appreciated. Recognition
creates a corporate culture in which employees feel good about themselves, their
co-workers, and their superiors. As a result, employees enjoy their jobs more
and have a greater sense of loyalty to the company. Ultimately, a company with
a strong culture of employee recognition will experience lower rates of attrition
and thereby increase its bottom line.
It’s not necessarily about money, formal programs or getting your name in the
company newsletter. It's all about what matters to each individual employee

Employee Retention Strategy - A Managing Dilemma


The degree to which compensation plays a role in an employee’s loyalty to the

company varies, but it is undoubtedly an important factor in employee retention.
Some consider it to be a de-motivator rather than a motivator. In other words,
inadequate compensation is likely to deter employees, while high levels of
compensation will not retain them.

Employees have greater job satisfaction and loyalty if they feel their position is
important to the bottom line of the company and requires a high level of
responsibility. This is especially true for young people because they are more
concerned with learning and creating better opportunity for themselves.

Employee Retention Strategy - A Managing Dilemma

What is Employee Retention Today?

According to The HR Priorities Survey from ORC Worldwide, an HR consulting and

data services firm, nearly 62 percent of respondents to their survey opined that talent
management will be the most pressing strategic issue they face in year. The findings
of the survey also indicated that 33 percent of talent management programs include
workforce acquisition, assessment, development, and retention as areas that will
consume most of the survey respondents' time this year 2007 (see Anonymous, 2007).
Retention has emerged as the focus of much time and attention in recent years,
particularly as part of talent management programs, and so much is known about it
that the HR practitioner who tries to integrate it into a talent program may grow
bewildered by the huge volume of research about it

Employee retention is more than just keeping employees on the job. It is also about
employees, primarily by enhancing their job satisfaction. Job satisfaction, in turn, can
increase productivity and keep employees energized and motivated to give their best.
Job satisfaction can equate to employees who stick with their current employer and
strive to perform at or above expectations and standards. Employee retention is
commonly considered to mean the ability to maintain a stable workforce. It is often
linked to morale and to organizational productivity. Retention is thus the opposite of
turnover, a well-known concept.

In addition the perception of having a job for life in a public sector role no longer
exists. The trend for the younger generation of workers is to shift from job to job and
this is becoming a norm of society. Companies that can recruit the best talent and
retain them will have an edge in the long run.

“Today talented persons are like frogs in a wheelbarrow, which can jump at any
point of time when they sense opportunities”

Employee Retention Strategy - A Managing Dilemma

Employee Retention in the New Millennium

Today's labor force is different. Supervisors must take responsibility for their own
employee retention. If they don't, they could be left without enough good employees.
A wise employer will learn how to attract and keep good employees, because in the
long run, this workforce will make or break a company's reputation. What's Different?
New supervisors must be prepared to be collaborative, supportive, and nurturing of
their people. The old style of "my-way-or-the-highway" style of management is a
thing of the past. Most new supervisors need training to understand what it really
takes to retain employees. Employee retention involves being sensitive to people's
needs and demonstrating the various strategies in the five families detailed in Roger
Herman's classic book on employee retention, Keeping Good People.

Employee Retention Strategy - A Managing Dilemma

Four Building Blocks of the Retention Process

Many organizations are feeling the pinch of low unemployment and high turnover.
Maybe yours is one of them. Keeping good employees is critical to organizational

However, many organizations look at this area as a series of tasks to be performed.

This is a process, not a set of tasks…and once that mindset is taken, a comprehensive,
ongoing system can be developed to ensure your retention goals are realized. Here are
four areas to consider when developing your systemic process.

Building Block 1: Recruit To Retain

Use behaviour based interviewing. Ensure that all interviewers are "in-sync"; that is,
they're reading off the same sheet of music. Look at the competencies that will be
needed to reach strategic goals, and then hire people who posses those competencies.
Use indicator assessments to help you better screen candidates and ensure that the job
fit is correct. Realistically preview jobs; neither overselling nor underselling benefits
the interviewee or the organization. And, don't forget reference and credential checks.
In certain positions, full background checks may be needed.

Carefully evaluate each position, especially when one becomes vacant. Is a

replacement truly needed? Are there better ways of structuring positions? Look for
employee input as well as management input.

How does your organization stack up against the competition? If salaries, benefits and
other "maintenance" factors aren't keeping up with the market, the other areas don't
matter. Consider getting outside market surveys for comparative data.

Building Block 2: Make Everyone a Part Of The Family

Set up orientation programs that embrace new employees. Look at orientation as a

long-term process, not just the first day or week of employment. Use your orientation
process to build employee involvement and commitment. That means making it

Employee Retention Strategy - A Managing Dilemma

interactive from the beginning, and involving all parts of the organization. Use a
buddy system for that critical introductory period time (or some other time
parameter). It's nice to have a buddy to explain the ropes and to have someone to have
lunch with. Check back regularly with new employees to "see how it's going". Find
out if what was described during the formal orientation day is indeed what they're
experiencing at their worksite.

Don't wait for the resignation that triggers an exit interview to find out what caused an
employee to leave. Don't wait for the exit interview to find out where the organization
has some opportunities for improvement. Use both formal and informal systems. For
example, "Pulse Check" interviews done at three or four months after hire date can
give a standardized indication of what's going well and where improvements can be
made. Culture and climate surveys provide indicators, and focus groups can provide
in-depth information on specific areas.

"MBWA", Managing By Walking Around, is a great way to get up close and personal
with employees. It gives you first hand information, and allows you to view the
workplace "as it is", rather than your perception from your office.

Building Block 3: Develop Current and Future Competencies

Skill development is for everyone - old and new employees alike. Proactively assist
employees in setting goals that link their development to the organization's overall
goals. Provide opportunities for both the short term and long term. Reward and
recognize employees based on results achieved pertaining to that skill. It isn't enough
just to learn it. Determine tangible results based on mastering the skill.

If you don't already have a mentor program, consider this for every employee.
Mentors can help to guide and develop every employee, and the relationship is
invaluable in raising the comfort level of employees and the productivity standard bar
in the organization.

Managers are critical in retention efforts, so think about what you're doing to develop
yours. Employees don't leave companies; they leave their managers! Make your
managers are ones that employee will stick to like glue! But be forewarned,

Employee Retention Strategy - A Managing Dilemma

management development is an individualized, long-term commitment. It's not a few

programs that the organization mandates every manager must attend.

Use a variety of tools and methods for developing employees. Assessments, web-
based training, classroom instruction, team learning and on-the-job training are just a
few of the methods. Each person is different in how they take in and process
information. Find out what works best with each person, and then capitalize on it.

Building Block 4: Learn From the Past With An Eye On The Future

Even with the best work environments, employees do leave for a variety of reasons.
Find out why your voluntary terminations resign by conducting structured exit
interviews. Then, use that data to make positive changes in your workplace. If
recurring themes come up, verify them with existing employees. Ask employees to
form teams to develop recommendations to improve those areas.

As for involuntary terminations….study them carefully. Are there trends? Do certain

supervisors have a higher than normal percentage of involuntary terminations? What
are the reasons? How can these be avoided in the future?

By implementing principles of the Four Building Blocks, you can build a strong
process for holding on to your employees. This, of course, is by no means
exhaustive…but it's a definitely a good start!

Employee Retention Strategy - A Managing Dilemma

These practices of retention can be categorized in 3 levels: low, medium

and high:

3 levels

Low level Medium level High level

Appreciating and Benefit program Promoting

recognizing a for family support work/life
well done job effectiveness
Providing training
Recognizing and development Understand
professional as and personal employee needs
well as personal growth
significant events opportunities

Employee Providing Hire the right

support in tough convenience at people from the
time or personal work place. beginning.

Employee Retention Strategy - A Managing Dilemma

Reasons Employees Give for Leaving Their Jobs

People often lie in exit interviews about why they are leaving. Managers should, of
course, know in advance who is leaving and why. A comprehensive list like this is of
little value unless you use it as a guide to gather your own information as to why your
workers are leaving. It is important to know these reasons to prevent them in the

1) Job content
This means the job description or the work the employee is doing. In a lot of cases
employees are put to jobs without considering their likes, dislikes, interests or areas of

2) Level of responsibility
This means the amount or the quality of the work given to the employee. In a few
cases the employee is given work, which does not have any authority or responsibility
or an imbalance of both. The employee could even be unhappy with the job

3) Company culture
At its most basic, it’s described as the personality of an organization, or simply as
“how things are done around here.” It guides how employees think, act, and feel.
Corporate culture is a broad term used to define the unique personality or character of
a particular company or organization, and includes such elements as core values and
beliefs, corporate ethics, and rules of behavior. Corporate culture can be expressed in
the company’s mission statement and other communications, in the architectural style
or interior décor of offices, by what people wear to work, by how people address each
other, and in the titles given to various employees.

Employee Retention Strategy - A Managing Dilemma

4) Caliber of Colleagues
Sometimes an employee cannot adjust with his peers and gets an inferiority /
superiority complex. This could happen due to various reasons such as conflicts in the
team, no support, no appreciation by peers etc.

5) Compensation
Not enough stock options / low value
Not enough benefits
Lack of bonuses
Lack of promotions
Lack of awards
Low pay and…
Loss of possible chance of "Wealth"

6) Lack of motivation for a particular project

Lack of enthusiasm toward project
Work team not cohesive
Lack of communication in project team
Assigned to a project unwillingly

7) Stress
Impossible to meet deadlines
Too many projects on going
Long working hours
Work taken home = less leisure time
Family/relationship problems due to the above
Possible health problems i.e. blood pressure high, nervous breakdown, anxiety attack

8) Lack of communication channel in the company and thus the feeling of

isolation and "in the dark".
Company morale suffers when employees are left in the dark. To combat this,
company leaders are enhancing their internal communication programs. Kent Barnett,
CEO of Knowledge advisors recommends: “Companies need to provide full
disclosure to their employees. Publish goals, share progress, openly and consistently

Employee Retention Strategy - A Managing Dilemma

revisit company values, and give employees the opportunity to act like owners.
Communication keeps employees well informed and engaged in the success of your
company.” Without adequate communication, employees are left to guess about the
future of the business.

Effective communication is a two way street. Leaders must provide opportunities for
employees to speak their voice. Employees feel valued and respected when they can
ask questions and share their thoughts, ideas, and concerns. Companies should
conduct surveys, weekly company meetings, and after work activities that allow
employees to openly express how they feel in a safe atmosphere with their leaders.
Such communication activities build trust and strengthen employee/employer

9) Life styles or work or family conflicts

The employee could have problems to do with the location or timings due to personal
reasons due to which he decides to leave.

10) No compelling vision of the future

The employee does not find him climbing the corporate ladder and does not see any
further up gradation in the work he is assigned.

Employee Retention Strategy - A Managing Dilemma

What Makes a Great Place to Work?

Communications are open and accessible
Competence in coordinating human and material resources
Integrity in carrying out vision with consistency.

Supporting professional development and showing appreciation
Collaboration with employees in relevant decisions
Caring for employees as individual with personal lives

equality- balanced treatment for all in terms of rewards
Impartiality- absence of favoritism in hiring and promotions
Justice-lack of discrimination and process for appeals

Ability to be oneself
Socially friendly and welcoming atmosphere
Sense of family or team.

Any company can be a Great Place to Work!

The great place to work is the place where employees "trust the people they
work for, have pride in what they do, and enjoy the people they work with" – this
idea of great workplace is measured by the quality of the three, interconnected
relationships that exist in organization:
The relationship between employees and management.
The relationship between employees and their jobs/company.
The relationship between employees and other

Employee Retention Strategy - A Managing Dilemma

Employee Retention Tools

In the present scenario, world is turning into a global village and the whole globe
is reachable from any destination. In this small world even companies are reachable to
the people and vice versa. And so their jobs are also easily accessible for everyone. In
this situation, the biggest challenge for a company is to retain its workforce intact
especially the Knowledge Banks.

All the companies are planning to increase their turnover every moment of time.
While in all this workout of increasing the turnover they forget about their loss
incurred by the resignation of employees and the expenses of hiring new employees
(Hiring Cost, Training Cost, Productivity Loss etc.). This hiring of a new employee
normally costs around 35% or more of the average employee salary. For example- let
us consider average salary of an employee per year as Rs.20, 000, and then the cost of
hiring a new employee and other expenses come around Rs.7, 000. If you have 2
employees resigning per month the cost comes to Rs.14, 000 and taking the same for
12 months comes to around Rs.168, 000, which is a direct loss from the turnover of
the company. And after all this there is always a risk of getting a right employee for
the right position with a right attitude.
If an employee resigns, 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. And even after this you cannot assure us of the same
efficiency from the new employee (He might be better and might not be). You require
time to judge his capabilities and work nature. The loss is even graver if he/she is
Your Knowledge Bank, this can bring your process to a stand still even. And above
all these things, one resignation many a times triggers a chain reaction among other
employees, leading to a negative effect.
For all these and many other reasons you need to retain your employees. For
retaining your employees, you need to understand the requirements of the employees
and at the same time should make them clear about the expectations of the company
from them. It’s a general human tendency that each human being thinks himself as
important and expects the same from the other side, so the company management

Employee Retention Strategy - A Managing Dilemma

should make their employees accountable for their respective jobs and make them feel
that they are very important for the smooth processing of that process(At the same
time create a backup for him). Care and importance are two things of which every
human being is mad of.
Below are few of the tools for Employee Retention:-

1. Employee Reward Program-

You can make a provision of Monthly or Quarterly Award (depending upon the
budget) for the best employee, Awarding 2 or 3 best workers each month. The award
can be in terms of gifts or money.
If it is money then it should be divided into two parts, first part to be given with the
next month salary and the remaining after 6 months. In this way he/she can be
retained for 6 more months. These rewards shall be considered at the time of

2. Career Development Program-

Every individual is worried about his/her career. You can provide them conditional
assistance for certain courses which are beneficial from your business point of view.
Conditional assistance means the company will bear the expenses only if he/she gets
an aggregate of certain percentage of marks. And entrance to that course should be on
the basis of a Test and the number of seats to be limited. For getting admitted to such
program, You can propose them to sign a bond with the company, like they cannot
leave the company for 2 years or something after the successful completion of the

3. Performance based Bonus- The employee always comes to know about the profit
of the company which is of course based on the strategic planning of the top
management and the productivity of the employee. To get more work out of the
employee, you can make a provision of Bonus. By this employee will be able to relate
himself with the company’s profit and hence will work hard. This bonus should be
productivity based. You can make sure that this bonus is not adding extra-pressure on
the budget of Your Company and you can arrange this by cutting a part of the salary
hikes and presenting it to the employees in the form of bonus.

Employee Retention Strategy - A Managing Dilemma

4. Employee Referral Plan- You can introduce Employee Referral Plan. This will
reduce your cost (charges of external consultants and searching agencies) of hiring a
new employee and up to an extent you can rely on this new resource. On every
successful referral, employee can be given a referral bonus after 6 or 9 months of
continuous working of the new employee as well as the existing employee. By this
you can get a new employee at a reduced cost as well as are retaining the existing one
for a longer period of time.

5. Loyalty Bonus- You can introduce a Loyalty Bonus Program in which you can
reward your employee after a successful completion of a specified period of time.
This can be in the form of Money or Position. This will encourage the fellow
employees as well whether they are interested in money or position, they will feel

6. Giving a voice to the Knowledge Banks- First of all you should try to retain your
workforce intact, as they are the intellectual asset of the company. And above that you
can’t afford losing your knowledge banks. These are the people who stabilize the
process. You can involve them in some of the decisions.

7. Employee Recreation- You should also let your employees enjoy in a light mood.
You can take your employees to a trip or for an outing every year or bi-yearly. You
can make use of this trip as well. You can start this trip with an opening note about
the management views and plans, strategies etc. At the same time you can involve
your top management into some of the fun activities as this will make feel the
employees that they are very close to the management and everybody is same.

8. Gifts at some Occasions- You can give some gifts at the time of one or two
festivals to the employees making them feel good and understand that the
management is concerned about them.

9. Accountability- You should make each employee accountable so that he can also
feel that he is as important as his manager. If he/she will be filled with this sense,
he/she will seldom think of leaving the company.

Employee Retention Strategy - A Managing Dilemma

10. Making the managers effective and easily accessible- You should make the
management easily accessible so that the employee expectations can be clearly
communicated to the top management, as it is impossible for the top management to
reach each employee frequently.

11. Surveys- You should conduct regular surveys for feedbacks from employee about
their superiors as well as other issues like food, development plans and other
suggestions. This will make them feel of their importance and the caring nature of the
company. Some of the suggestions might be of real good use for the company.

For a company, the workforce is like an intellectual property, both in terms of

skills and money. A trained and content workforce can lead a company to new heights
while a opposite one can hamper it badly. So, every resignation saved is every dollar

Employee Retention Strategy - A Managing Dilemma

Employee Retention: Vital Strategy

Employee retention is most critical issue facing corporate leaders as a result of the
shortage of skilled labor, economic growth and employee turnover. This site explores
all aspects of the workforce stability issue in the face of unprecedented churning in
the employment market with a focus on retaining your employees. This is one of the
hottest topics for corporate leaders in all fields in the United States and globally.
Struggling with uncontrolled turnover? We can help. Designed to provide employers--
executives, managers, and human resource professionals--with a wide range of tools
to control employee turnover, this site offers a wide range of products and services to
help you to build retain your most valuable players... and profit. Workforce stability
can be your competitive advantage in these turbulent times.

Employee Retention Strategies - A Managing Dilemma

Strategies for Retaining People

1. Take a Direct Personal Interest in All Your Team Members
This can be done by following these simple guidelines:

(i) know Everyone by Name

Incredible, but true. Any corporate structure is like a pyramid. No matter what part of
the pyramid you occupy, the strength of the pyramid depends on the bottommost layer
and it becomes imperative that you know all the people who report to you directly or
indirectly. At least, the best managers have an uncanny knack of remembering
peoples’ names and making casual personal enquiries about the well being of anyone
they meet. Since this kind of behavior is not always experienced, it makes the people
realize that they are being given personal attention and builds loyalty in the team. It
satisfies the basic human craving of being noticed.

(ii) Connect with Everyone

Tough one to explain but when it comes to people, you are better advised to build
relationships first and then steer people in the direction you want them to move.
Moreover, in this case, people will follow you willingly. Learn to persuade, not
dominate. There is a vast difference between the two phrases ‘Can you please ensure
that this is done?’ and ‘You need to complete this work by EOD today.’ One is a
slight nudge or a request while the other is a kick. No one likes to be kicked.

(iii) Protect Your Team at all Costs

Protect your team from:

Overenthusiastic sales personnel who try to impose their sales targets on developers,
Powerful stakeholders who impose deadline pressure, Prima Donna developers who
start dominating juniors
Have genuine concern and take true care of your team – the best leaders are the ones
who go to extreme lengths to protect the interests of their team. Sometimes, this may

Employee Retention Strategies - A Managing Dilemma

mean that you need to lock horns with your immediate superiors and higher

(iv) Solve Problems Even If it is Outside the Scope of the Project

One of your key responsibilities as a Project Manager is to clear all the obstacles
which come in the way of your team members and prevent them from performing at
the optimum level. While most PMs do handle all the nagging problems faced within
the office premises, very few actually look beyond that.

(v) Be Absolutely Honest and Transparent

Trust is the foundation stone of all relationships. Break trust and invite disaster. Be it
organizational changes, cost cutting, layoffs, or any other news which impacts the
team; always be the first one to inform the team openly and accurately.

Do all your team members feel safe when it concerns you – if not, you need to work
towards building up the deposits in that emotional bank account with everyone.

2) Get the right people on the bus –

In his book, Good to Great, Jim Collins talks about the importance of having the right
talent on the organizational bus. Hiring individuals who are truly fit to succeed in the
position for hire will dramatically increase the chances of that employee being
satisfied with his or her work and remaining with the company for an extended period
of time. By far, we have found this to be the biggest predictor of future employee

Employee Retention Strategies - A Managing Dilemma

3. Practice the 80/20 Rule

The Pareto principle, in the project management context would mean that 80%
of the work is done by 20% of the team. This means that once you have identified
your core 20%; make sure you are spending 80% of your time with them.

Sometimes, the weakest developers in your team can end up eating up your
entire time and bring down the entire project over a period of time. The same
applies to your core team as well – remember, your team is only as strong as its
weakest link. Sometimes, the best developers end up spending most of their time
in resolving problems faced by their weakest colleagues. Never allow this to

4. Place the Right People in the Right Areas

Over a period of about 3-6 months, you will be able to pinpoint people’s strengths and
weaknesses if you are always involved at the ground level and not just living on
updates like average project managers. At this point of time, it is important to
strengthen the roles for the core 20% as all high-fliers eventually get restless.

5) Communication, communication, communication –

Communication has become so heavily stressed in the workplace that it almost seems
cliché. However communication couldn't be more important in the effort to retain
employees. Be sure that team members know their roles, job description, and
responsibilities within the organization. Communicate any new company policies or
initiatives to all employees to be sure that everyone is on the same page. Nobody
wants to feel that they are being left out of the loop.

6) Create Career Development Plans for all your Key People

Most project managers never quite get down to working this step, yet, this is the key step to
stem attrition and hold on to your best team members. The best people are usually interested in
the following aspects of a job:
Career growth, i.e. growth in responsibility, Growth in income, Better role Overall, the best
people are mainly interested in knowing if the current job provides them enough opportunities

Employee Retention Strategies - A Managing Dilemma

to advance towards their long term career goals which might be of becoming an enterprise
software architect, project manager, etc.

7) Praise Publicly and Criticize Privately

Never miss spotting someone doing the right thing – and always acknowledge and
reward the same. People literally crave for a kind word and will eventually repeat
their best performance when they are recognized for the same.

On the contrary, if a situation demands that some harsh words need to be spoken, and
then always ensure that this happens in a closed door meeting and never in public.
Also, take particular care that you do not violate someone’s sense of self-respect but
at the same time you make a person realize the gravity of his mistake.

8) Show Empathy, Not Sympathy

Empathize with people when they miss project deadlines due to personal problems,
but do not sympathize.
The dictionary meaning of sympathy is “the feeling of being sorry for someone”,”
support for or approval of something” and that of empathy is “understand and share
the feelings of another”. There is a qualitative difference between both. When you
show sympathy, you will allow a person to drag you into his well of woe whereas
when you show empathy you will help or empower him to solve his problem or move
on and find someone else to do the job.

9) Share Successes with the Team, but Take Responsibility for Failures

Always ensure that the top performers get public recognition for their efforts. This is
easy in organizations where you have a quarterly rewards and recognition program. In
organizations where this is not the case, the project manager needs to be creative. One
way to do this is to be a good promoter of people, this leads to people becoming more
and more motivated and striving to consistently meet the high standards they
themselves have set.

Employee Retention Strategies - A Managing Dilemma

10) Include employees in decision making –

It is incredibly important to include team members in the decision making process,
especially when decisions will effect an individual's department or work team. This
can help to create a culture of employee involvement and will generate new ideas and
perspectives that top management might never have thought of.

11) shorten the feedback loop –

Do not wait for an annual performance evaluation to come
due to give feedback on how an employee is performing.
Most team members enjoy frequent feedback about how they
are performing. Shortening the feedback loop will help to
keep performance levels high and will reinforce positive
behavior. Feedback does not necessarily need to be scheduled
or highly structured; simply stopping by a team member's
desk and letting them know they are doing a good job on a current project can do
wonders for morale and help to increase retention.

12) Recognize team members for their hard work and let them know they are
appreciated –

This can be one of the single greatest factors affecting employee retention.
Everybody, in all levels of an organization, wants to know that their efforts are
appreciated and recognized. This can be as simple or as extravagant as a supervisor
may desire. Often time a short e-mail or quickly stopping by a team member's desk
and saying "thanks" can do wonder for morale. Other options might include a mention
in the company newsletter for outstanding performance or gift certificates to a
restaurant or movie theatre - the possibilities are endless.

13) Clearly define what is expected of team members –

Nothing can be more frustrating or discouraging for an employee than the lack of a
clear understanding of what is expected of him on the job. In a performance driven
workplace a lack of clarity regarding job duties and expectations can cause fear and
anxiety among employees who are unclear of what is expected of them. Even worse
Employee Retention Strategies - A Managing Dilemma

outright anger can occur when a team member receives a negative performance
evaluation based on expectations and job duties that he or she was unaware of or
unclear about.

14) The quality of supervision and mentorship –

It has been said so often that it is almost cliché, but people leave people, not their
jobs. Supervisors play the largest role in a team member's development and ultimate
success within an organization. All employees want to have supervisors who are
respectful, courteous, and friendly - that is a given. But more importantly team
members want supervisors who set clear performance expectations, deliver timely
feedback on performance, live up to their word and promises, and provide an
environment where the employee can grow and succeed. Failure by supervisors and
management to provide this can cause an employee to start looking for greener

15) Fair and equitable treatment of all employees –

One of the surest ways to create animosity and resentment in an organization is to

allow favoritism and preferential treatment of individual team members. The so-called
"good ole' boys club" can create a noxious organization culture and foster resentment
among team members. This culture will only get worse and can create a devastating
exodus of valued team members. Be sure to treat all employees equally and avoid
favoritism at all costs.

Employee Retention Strategies - A Managing Dilemma

Factors causing employee turnover:


Companies have now realized the importance of retaining their quality workforce.
Retaining quality performers contributes to productivity of the organization and
increases morale among employees.
Four basic factors that play an important role in increasing employee retention include
salary and remuneration, providing recognition, benefits and opportunities for
individual growth.

Employee Retention Strategies - A Managing Dilemma


 Management must encourage employees who give ideas or suggestion. They

must encourage the participative management style.

 They must also offer rewards, both monetary and non-monetary to the
employees, because recognition plays an important role in maintaining
employee retention.

 Employer-Employee relationship can still improved, as it act as a mode for

retaining an employee

Finally from the findings it is recommended that the management can revise its
promotional activities to its employees take pride in their job and can perform
excellently in future.

Employee Retention Strategies - A Managing Dilemma

Importance to training in Employee Retention

Training and development is not given the adequate importance in this

company. It is a must to realize that the expenses done on training and
development would indirectly save on the organization cost and also help to retain

Training could be on any factor, could be technical or even could be general like
on communication or personality development skills. Such few training sessions
can enhance the employees and motivate the employees.
Training for change management, which is, expected in the organization e.g. the
new process of performance appraisal is also necessary.

 Career Aspirations
Career aspirations, career goals of the employees should be discussed. They
should be made to feel important. It’s not always possible to promote everyone
in the organization but it is definitely possible to explain this and tell the
employee when and how he will climb the corporate ladder.
Career goals should be reviewed about once a year and not only during the
times of promotion. Reviewing it only during the time of promotion would
show a selfish outlook of the company. A process of goal setting in the
organization is recommended.

A quote from the employee: “Appraisal is not done at all since the last 4/5
years. Employees are stuck at a particular grade and time and again
employees have asked for promotions, increments and the response has been
very poor”.

 Stick to the work Culture

This has been the strength of the company. The employees are more than
happy with the work culture of this company. This should not be changed.

Employee Retention Strategies - A Managing Dilemma

Especially that the company will now undergo change management, there
would be a chance that the culture would change so this has to be avoided.

 Communication bias
Few employees do not perceive the company as a walk- in communication
cultured company. It is important to help these employees remove the bias. This
would require support from the higher levels.

 Exit interviews
The process that currently exists should be continued so that the reasons for
the leave of one employee do not become the reasons for the leave of the

 A note of caution
There are 3% of the employees who have said that they are still in the company
as the market scenario is bad and that other jobs are not offered. This must be
taken seriously cause had the market scene to become good the company might
loose a few good employees.

Employee Retention Strategies - A Managing Dilemma

Employee morale

Maximizing and Improving Employee Morale is a critical element of any

organization's long-term talent management strategy. The reasons are many. The
simplest reason... If your employee morale is not where it should/could be, your
employee retention will suffer and overall productivity will be much lower than it
could be.
What destroys employee morale is ultimately what I call "negative energy".
Negativity or negative energy is caused by several core issues. Following are eight
core employee morale challenges that when improved can lead to very good outcomes
for your organization and team...

Job Fit –

The biggest "contributor" to employee morale problems is simply the wrong person
is in the wrong job. It is absolutely critical that employee team members have the
core ability to do the job well through a proper match of their skill sets and most
importantly a proper match of the Behaviors, Values, and Personal Attributes to the
needs of the job well. Without a proper Job Fit you have a Job Mismatch Problem
leading to what I call "Job-Me Conflict". Job-Me Conflict always, always, always
leads to employee morale problems.

Job Clarity –

Another significant contributor to employee morale issues is that employee team

members do not know what is expected of them. It is absolutely critical that
employee team members know what they need to be doing daily to achieve success.
Job role and duty ambiguity leads to confusion. Confusion leads to people making
their job up and/or anxiety about the job role. There is a direct one-to-one
relationship between employee morale and knowing what is necessary to do the job
well. Take the time to clarify job tasks and do so periodically.

Employee Retention Strategies - A Managing Dilemma

Personal Accountability –

Employee Accountability or Personal Accountability is one of the most powerful

ways to improve employee morale. In today's litigious society, we are conditioned to
blame everything and everyone else but ourselves. The reality is that if it is to be - it
is up to me. The buck stops here with me... When an employee team member begins
to ask the right questions, the right answers come and with those answers comes
empowerment and improved employee morale. A powerful Personal Accountability
Training Program is QBQ. This program is an easy program to deliver internally and
is one that we recommend to all of our clients as an initial "shot in the arm" to
improve employee morale quickly.

Passion For the Work –

Without passion for the work, life becomes dull, boring, and a "grind" in the
workplace. The best way to create passion is to first understand the Behaviors,
Values, and Personal Attributes of the employee team member. When you do so, you
will understand how to communicate more effectively with each team member at a
level that is unparalleled. What needs to be communicated is the impact that the
employee team member and organization ultimately has on others. Passion does not
come from talking about products and/or services and descriptions of benefits.
Instead... Passion comes as a result of understanding the positive emotional benefit of
what your products and/or services do for the Customer. When you turn your
Mission, Vision, and Guiding Values into a cause, you create passion.

Workplace Politics –

Where the "who matters more than the what", employee morale drops. Let's be real...
All workplaces have politics. Where there are human beings, there will be politics. If
your organization, department, or team has more workplace politics than is healthy,
your employee morale will be poor as your high performers bail out for "greener

Employee Retention Strategies - A Managing Dilemma

Self Awareness –

Employee team members who are unaware of their core behavioral styles and values
will have what I call "repeat games" to identify what they are. These "repeat games"
are job hops, work assignment changes, and career changes to identify what is the best
fit for them. A good metaphor is trying to "fit a puzzle piece" only the puzzle piece is
a big one - finding the "fit" in our lives through our work. By increasing self
awareness of one's behavioral styles and values, one can begin to seek the
environment that calls for these unique combinations as well as better accept one's
strengths and "growth opportunities". Daniel Goleman's fantastic books in Emotional
Intelligence (EQ) can serve as outstanding reference material should you want
additional information.

Interpersonal Awareness –

Employee team members must first become self aware before they can become
interpersonally aware. We are all "wired" and see the world differently. Through self
awareness, we can become better able to understand how to "flex" our behaviors - the
way we talk and behave - with others to help ourselves and others get what we all

Someone Who Cares About Them At Work –

We all need to know that we matter. Having a good friend at work is important. A
personalized praise program that is specific to the Behaviors and Values of the
employee team member is an important way to improve this critical element

Employee Retention Strategies - A Managing Dilemma

Strategies for employee satisfaction

Employee Satisfaction Requires New Strategies

Today's employees are looking for more than just a paycheck, and many
companies have learned that paying more than the competition is not necessarily the
best or even an effective way to recruit qualified personnel.
As the apartment industry matures, managing employees has become even
more critical. But just as human resource (HR) operations have grown more
important; they have also become more challenging thanks to today's tight labor
Apartment firms not only compete with each other for talent, but also
against a broader category of people-intensive, service-oriented industries. In this
environment, apartment companies are trying to improve their HR performance by
examining their wage strategies, decentralizing their HR operations, outsourcing
certain functions and implementing new technologies.

It's not just the check anymore

Employees are looking for more than just a paycheck, and many
companies have learned that paying more than the competition is not necessarily the
best or even an effective way to recruit qualified personnel. Indeed, many firms are
making strategic choices to invest in training and recognition programs to gain a
competitive edge, increase retention and build morale.
Others are adjusting pay levels, but not necessarily across the board.
Instead, they are implementing job classification programs and performance-based
pay systems to remain competitive while still keeping salary costs in line.
That being said, money does still matter. To design the best possible
compensation package, firms need to know if their wages are in line with market
standards. However, compensation data on site-level property managers is difficult to

Employee Retention Strategies - A Managing Dilemma

To fill this need, the National Multi Housing Council (NMHC) will release
its first Apartment Compensation/Benefit Survey measuring wage and benefit
practices for site-level positions in major markets.

Hiring out in the field

Decentralizing HR operations is a growing trend in the more sophisticated

apartment firms. Faced with high employee turnover and a growing number of
qualified applicants who "got away" while headquarters processed a hiring request,
more and more corporate HR departments are now letting site-level management
make hiring decisions.
It is not enough to just delegate authority downward, however. Corporate
offices must also provide site-level management supervisors with the training and
resources needed to make smarter hiring decisions.

The value of outsourcing

Depending on a firm's size, outsourcing can be an effective way to reduce

HR costs and provide benefits a company cannot offer on its own. For example, firms
are outsourcing payroll processing and the administration of workers' compensation
claims. They are also using third-party vendors to offer Web-enabled training
Before going down this path, however, firms must conduct cost-benefit
analyses of existing tasks and services. Some real estate firms that want to outsource
discover that their employee pool or transaction volume is not large enough to make
third-party HR services work. Other times, a firm will decide to keep an HR function
in-house because doing so yields substantial benefits to employees.
If, for example, a firm's face-to-face training program is the primary method
through which senior management interacts with on-site and regional employees, then
that training may contribute significantly to building company morale. In that
instance, outsourcing would not be desirable.

Employee Retention Strategies - A Managing Dilemma

The turn to new technologies

Training is one area where many HR professionals are looking for high-
tech solutions. New distance-learning options, such as Web-based and CD-ROM
training materials, may work best as risk-reduction tools for new employees, who can
be required to study the materials and pass an online test before beginning work.
Before introducing a new technology, however, a company should develop
a plan that specifically identifies the expected costs of implementing the tool, the
costs of training personnel to use it and the guidelines that will be used to determine
whether the technology actually raises productivity. Some firms have also found that
distance learning can actually hurt employee productivity and increase turnover when
employees feel removed from peer contact and company recognition. Consequently,
firms may need to find new ways to recognize outstanding personnel and encourage
employee interaction.

Employee Retention Strategies - A Managing Dilemma

Ways to Retain Your Great Employees

Key employee retention is critical to the long term health and success of your
business. Managers readily agree that retaining your best employees ensures customer
satisfaction, product sales, satisfied coworkers and reporting staff, effective
succession planning and deeply imbedded organizational knowledge and learning. If
managers can cite these facts so well, why do they behave in ways that so frequently
encourage great employees to quit their jobs?
Employee retention matters. Organizational issues such as training time and
investment; lost knowledge; mourning, insecure coworkers and a costly candidate
search aside, failing to retain a key employee is costly. Various estimates suggest that
losing a middle manager costs an organization up to 100 percent of his salary. The
loss of a senior executive is even more costly. I have seen estimates of double the
annual salary and more.
Employee retention is critically important for a second societal reason, too. Over the
next few years while Baby Boomers (age 40 to 58) retire, the upcoming Generation X
population numbers 44 million people (ages 25-34), compared to 76 million Baby
Boomers available for work. Simply stated: there are a lot fewer people available to
Employee retention is one of the primary measures of the health of your organization.
If you are losing critical staff members, you can safely bet that other people in their
departments are looking as well. Exit interviews with departing employees provide
valuable information you can use to retain remaining staff. Heed their results. You’ll
never have a more significant source of data about the health of your organization.
I’ve provided retention tips in earlier articles, but will add ten more retention tips to
your arsenal with these top ten ways to retain a great employee.
To satisfied employee knows clearly what is expected from him every day at work.
Changing expectations keep people on edge and create unhealthy stress. They rob the
employee of internal security and make the employee feel unsuccessful. I’m not
advocating unchanging jobs just the need for a specific framework within which
people clearly know what is expected from them.

Employee Retention Strategies - A Managing Dilemma

The quality of the supervision an employee receives is critical to employee retention.

People leave managers and supervisors more often than they leave companies or jobs.
It is not enough that the supervisor is well-liked or a nice person, starting with clear
expectations of the employee, the supervisor has a critical role to play in retention.
Anything the supervisor does to make an employee feel unvalued will contribute to
turnover. Frequent employee complaints center on these areas.

--lack of clarity about expectations,

--lack of clarity about earning potential,
--lack of feedback about performance,
--failure to hold scheduled meetings, and
--failure to provide a framework within which the employee perceives he can succeed.
The ability of the employee to speak his or her mind freely within the organization is
another key factor in employee retention. Does your organization solicit ideas and
provide an environment in which people are comfortable providing feedback? If so,
employees offer ideas, feel free to criticize and commit to continuous improvement. If
not, they bite their tongues or find themselves constantly "in trouble" - until they
Talent and skill utilization is another environmental factor your key employees seek
in your workplace. A motivated employee wants to contribute to work areas outside
of his specific job description. How many people could contribute far more than they
currently do? You just need to know their skills, talent and experience, and take the
time to tap into it. As an example, in a small company, a manager pursued a new
marketing plan and logo with the help of external consultants. An internal sales rep,
with seven years of ad agency and logo development experience, repeatedly offered to
help. His offer was ignored and he cited this as one reason why he quit his job. In fact,
the recognition that the company didn't want to take advantage of his knowledge and
capabilities helped precipitate his job search.

Employee Retention Strategies - A Managing Dilemma

How to Help Managers with Employee Retention

Almost every manager can increase her ability to retain employees by developing her
management skills. Teaching a manager about how to value people can be more
challenging. Particularly if the manager doesn't already value people and their
contributions in her mind and heart, it will be a leap for her to change her values.
These ideas will help your organization develop managers who believe in and act in
ways that support employee retention.
Integrate core values about people and a mission and vision that enable people to
align themselves with the company direction. Communicate the importance of these,
and clear expectations about the behaviors expected from managers to accomplish
these, to every manager.
Negotiate a performance development plan with each manager that stresses the
expected managerial areas of development,
Provide training in core management skills to every manager. Core management skills
include how to:
integrate performance management including goal setting,
give and receive feedback,
recognize and value employees,
coach employee performance,
handle employee complaints and problems,
provide a motivating work environment, and
hold career development discussions with employees.

Hold regular meetings to provide management development coaching and feedback.

You can assist managers to improve their management style and skills. A regular
meeting helps you debrief events as they occur, while memories of the exchanges are
fresh in the manager's mind.
Schedule and hold learning organization events such as book clubs, product training,
project debriefs, and discussion and planning meetings.
Provide funding for conferences and educational development opportunities for
managers to continue learning.

Employee Retention Strategies - A Managing Dilemma

As part of a fully integrated performance management system, provide 360 degree

feedback so managers know how their management style is perceived.
What if a Manager Fails at Employee Retention?
If a manager fails at employee retention, the chances are good that the manager has
been unable or unwilling to develop their ability to manage and value people across
the board. Managers who exhibit a pattern in which their key employees leave your
organization cannot retain their management role.
If you have fairly and ethically provided the manager the learning opportunities
suggested here, you can, in good conscience, remove the individual from the
managerial role. My experience has been that most managers consider this such a loss
of prestige and "face" that they voluntarily leave the organization.
If they choose to stay, however, they must commit to being effective, contributing
employees. If the manager cannot make this leap, you will need to let the manager go
before their negativity impacts the rest of your workplace.
Given the management development opportunities listed here, most managers will be
able to become managers who retain their best employees. Your investment in your
managers can fuel your organization's ongoing success. After all, it is the quality of
the people you employ and retain that is the heart of your business success.

Employee Retention Strategies - A Managing Dilemma

The Bottom Line for Employee Retention

What is the bottom line when it comes to employee retention? The quality of the
supervision an employee receives is critical to employee retention. People leave
managers and supervisors more often than they leave companies or jobs.
It is not enough that the manager is well-liked or a nice person. Sure, a nice, likeable
manager earns you some points with your employees. A draconian, nasty, or
controlling manager takes points away from your organization. So will below market
benefits and compensation. But, a manager or supervisor, who is a pro at employee
retention, knows that the quality of the supervision is the key factor in employee
Effective Managers Create Employee Retention
Managers who retain staff start by communicating clear expectations to the employee.
They share their picture of what constitutes success for the employee in both the
expected deliverables from and the performance of their job.
These managers provide frequent feedback and make the employee feel valued. When
an employee completes an exchange with a manager who retains staff, he or she feels
empowered, enabled, and confident in their ability to get the job done.
Employee complaints about managers and supervisors center on these areas.
Employees leave managers who fail to:
provide clarity about expectations,
provide clarity about career development and earning potential,
give regular feedback about performance,
hold scheduled meetings, and
provide a framework within which the employee perceives he can succeed.

Employee Retention Strategies - A Managing Dilemma

Effective employee retention strategies, key to reduce attrition in BPO


Intelligent employers always realise the importance of retaining the best talent.
Retaining talent has never been so important in the Indian scenario; however, things
have changed in recent years. In prominent Indian metros at least, there is no dearth of
opportunities for the best in the business, or even for the second or the third best.
Retention of key employees and treating attrition troubles has never been so important
to companies.

In an intensely competitive environment, where HR managers are poaching from each

other, organisations can either hold on to their employees tight or lose them to
competition. For gone are the days, when employees would stick to an employer for
years for want of a better choice. Now, opportunities abound.

It is a fact that, retention of key employees is critical to the long-term health and
success of any organisation. The performance of employees is often linked directly to
quality work, customer satisfaction, increased product sales and even to the image of
a company. Whereas the same is often indirectly linked to, satisfied colleagues and
reporting staff, effective succession planning and deeply embedded organisational
knowledge and learning.

Employee retention matters, as, organisational issues such as training time and
investment, costly candidate search etc., are involved. Hence, failing to retain a key
employee is a costly proposition for any organisation. Various estimates suggest that
losing a middle manager in most organisations, translates to a loss of up to five times
his salary. This might be worse for BPO companies where fresh talent is intensively
trained and inducted and then further groomed to the successive stages. In this
scenario, the loss of a middle manager can often prove dear.

Employee Retention Strategies - A Managing Dilemma

Why people leave?

In an industry like BPO, the work can often be monotonous and opportunities for
career growth minimal. So when opportunities beckon, the high rate of attrition is not
surprising. However, there are some common reasons that especially cause people to
leave. Surveys have listed night shifts, money, inability to handle various types of
stress, monotonous work; company policies, lack of career growth, problems with
those in senior positions etc., as some of the most common reasons listed by BPO
employees, as reasons for quitting jobs.

Finding the cause

Have a survey among employees to find the reasons for attrition. If possible, have exit
interviews to know the reasons for resignations. If a key employee resigns, it should
be taken up on a priority basis and the senior management should meet the employee
to discuss his reasons for leaving and evaluate whether his issues bear merit and
whether they can be resolved. Steps can be taken to avoid similar reasons from
occurring in the case of others, in similar positions.

What can be done?

Though, it is impossible to scrap problems totally, there are certain ways by which
BPO managements can tackle attrition. Since the BPO environment is unique, these
companies need to develop innovative ways to tackle them. Human Resources
department of a BPO must address these issues, and along with the management need
to evolve strategies to retain employees at all levels.

Employee Retention Strategies - A Managing Dilemma

At the time of Recruitment

Select the right people through competency screening.

Use psychometric tests to get people who can work at night and handle the monotony.
Offer an attractive, competitive, benefits package.
Make clear of performance enhanced incentives and other benefits. Keep these
promises, later.
BPOs can set up offices in smaller towns, or recruit from there, where opportunities
are few.

At the office
An employees work must be communicated to him clearly and thoroughly. The
details of the job, its importance, the way it should be done, maximum time that can
be allotted to complete it etc., must be made clear. If there are changes to any of
these, let the employee know at the earliest
Give the employees necessary tools, time and training. The employee must have the
tools, time and training necessary to do their job well - or they will move to an
employer who provides them.
Have a person to talk to each employee at regular intervals. Listen and solve
employee complaints and problems, as much as possible. Fairness and impartial
treatment by seniors is important. Help employees manage stress, both at work and if
possible, off work too. Give them special concessions, when in need. Treat the
employees well & provide dignity of job.
The quality of the supervision an employee receives is critical to employee retention.
Frequent employee complaints arise on this issue.
Provide the employees a stress free work environment. People want to enjoy their
work. Make work and work place cheerful and fun-filled as possible.
Make sure that employees know that their work is important for the organisation.
Feeling valued by their employer is key to high employee motivation and morale.
Recognize their strengths and help them to improve those they lack.
Employees must feel rewarded, recognised and appreciated. Giving periodical raise in
salary or position helps to retain staff.

Employee Retention Strategies - A Managing Dilemma

Offer excellent career growth prospects. Encourage & groom employees to take up
higher positions/openings. If they dont get opportunity for growth within the
organisation, they will look elsewhere for it.
Work-life balance initiatives are important. Innovative and practical employee
policies pertaining to flexible working hours and schemes, granting compassionate
and urgency leave, providing healthcare for self, family and dependants, etc. are
important for most people. Work-life balance policies would have a positive impact
on retaining skilled employees, as well as on attracting high-calibre recruits.
Implement competency models, which are well integrated, with HR processes like
selection & recruitments, training, performance appraisal and potential appraisal.

Night shifts

Have doctors to advise them about health problems and the ways and means to deal
with them. Provide dietary advice: - Dos and donts. Help them to maintain their
Organise programmes where people from other professions, who have night shifts talk
to BPO employees about their experiences. Other organisations like Army, Railways,
Hospitals and various government services etc., also have night shifts.
Organise training, counselling and development programmes for employees. Tell
them that their work is important. Encourage the best performers to share their
experiences with others and guide others. The emphasis is to create the desire to learn,
enjoy and be passionate about the work they do.
If needed, provide special lights in the office/workplace to ensure that their bodies get
sufficient vitamin D.
One distinct disadvantage of night shifts is the sense of disorientation with friends and
family members. Concentrate on this problem and develop innovative solutions and
ways to deal with it. Additional holidays for work on national holidays and festivals,
holidays for family functions etc., can go a long way.

Employee Retention Strategies - A Managing Dilemma


As they say, happiness can be contagious. So make sure the work place is a happy
one, which every employee would love to spend time. Human resources department
along with senior management must take steps to make sure of this.

Effective human resource management must be practiced at both strategic and day-to-
day levels. HR management practices must reflect company policy as to how it will
manage and relate to its employees. The HR strategy should evolve from a
transactional support role to partnering in the organisations business strategy. HR
must take steps to be aware of employee problems and try to solve them, creatively.

Employee Retention Strategies - A Managing Dilemma

Employee retention strategy of THE RAINMAKER GROUP

At The Rainmaker Group, they are committed to helping in Maximize Possibility by

creating an employee retention program and provide with the proper retention training
system that will identify and retain the top performers within organization.

They understand that time is money to for organization. Every minute of every day
that employee retention problems persist in organization is losing valuable time,
energy, and resources.

With the use of the powerful tools at our disposal, their employee retention experts
will get to know their team and organizational culture better than anybody could have
ever imagined. By doing so they can get down to the real causes of employee turnover
in organization and develop retention program that is right for team.

Their clients always see a sizable return on investment in the form of improved
profitability, reduced employee turnover, and enhanced employee morale.

Stop unwanted employee turnover dead in its tracks and get back to doing what you
do best: growing and leading your organization!

• The cost of employee turnover can range between 1/2 to 4 times an

employee's annual wages and benefits
• 80% of turnover can be attributed to mistakes during the hiring process]
• Employee retention has as much to do with who you hire as what you do
after he or she is hired
• Traditional methods of hiring employees only provide a 14% likelihood of a
successful job hire

An ineffective employee retention strategy can drive any manager crazy. The
crippling effects employee turnover costs can have on your organization's efforts to
Employee Retention Strategies - A Managing Dilemma

consistently turn a profit only adds to the stress you are already under as a leader in
your organization. Don't despair. You can do something about the high cost of
employee turnover, dwindling levels of retention, and the steady outflow of quality

How they can help improve current employee retention program:

• They identify top performing team members and develop strategies to ensure
they stay with your organization
• They can identify the reasons why an employee will leave before they are ever
• They will help you select and hire great employees who are well fit for the
job and your organizational culture
• They can help to improve communication and morale - two key elements that
affect employee retention
• They will assist in determining growth opportunities for team members and
develop customized training that will improve performance

There are few if any issues that business leaders face today that are more important
than the effort to hire and retain good employees. An effective employee retention
program can have a dramatic impact on your organization's bottom line. As
employees grow so does your business, and its bottom line. It might seem like
common sense, but it can't be understated: an organization is only as good as the
people it employs.

Here at The Rainmaker Group our employee retention experts have some of the most
powerful tools available to help you select the best employees and effectively coach
and motivate your employees after they are hired. Give us a call today. We are here to
help and would love to hear from you!

Employee Retention Strategies - A Managing Dilemma



Sampath, Saumya and Shankar were discussing something very important at the
lunch table. They all work for the 4000 employee strong advanced Pharma, a leading
firm, based in Hyderabad. The topic of their discussion was how disenchanted they
were with their jobs and how soon they intend looking elsewhere for better
opportunities. Ramana, the HR manager, who was at the adjoining table happened to
hear their conversation. What he overheard troubled him to understand. These three
employees were star performers in the organization. While Sampath and Shankar
worked in the marketing division, Saumya was in the finance division. From their
discussion, Ramana could gather that there was something major brewing and it’s not
just these three who were unhappy. He decided to take some corrective steps
immediately to avert the disaster. The first thing that Ramana did after walking out of
the lunch room was to call for a meeting of the HR department. He said that he
immediately wanted to conduct a survey on what is it that the employees dislike the
most about the organization and how would they like it to be changed. He gave his
team only a week and asked them to come up with the findings in compact and
orderly form. Ramana’s team came up with the following findings by the decline-

Performing the same duties day in, day out, without any expectations of change in
routine or opportunities for advancement was found to be the most discouraging
aspect for the employees.
In cases where there were any attempts of job enrichment, it was in a distorted
manner, with managers burdening employees, by placing unrewarding responsibilities
on their shoulders. This result in a feeling of exploitation and has the reverse of the
intended effect.

The employees also felt that cross-training would help them learn new skills and gain
multi-functional knowledge, which would equip them for managerial responsibilities

Employee Retention Strategies - A Managing Dilemma

in the future. They also felt that cross-training would also provide them respite from
their routine jobs once in a while. Ramana taking a clue from employee suggestions
immediately went in for cross-training. Cross-training was implemented horizontally,
upward and downward to increase employee motivation in the organization.
Departmental heads, assistant and employees were given an opportunity to cross-train
in different departments or within the department itself. With the requisite ground
support, employees can even have one day training in the position of department

Conclusion of the case

From the above case we can drawn out the conclusion that HR manager Ramana is a
responsible employer and very much concern about the well-being and fulfilling the
expectations of employees.
Retaining the employee especially the best ones require more than goodies and
Mr. Raman has potential to recognized and understand the needs of employees which
can drive satisfaction and high performance in them.

So, from the above case we can say the organization is truly,

Employee Retention Strategies - A Managing Dilemma

Case –Study
Duphar Pharma India ltd.

The aim of this section is to find out how retention works differently in practical
situations and how companies need to customize their strategies to meet their
employee specific needs.

The sample size of the survey is 20 people plus 4 in-depth interviews. The sample size
was selected on the basis of the following calculations:

Strength of the company: 360 employees

According to market research theory a 1- 3 % sample should be taken i.e. 3 – 9
But to avoid bias and to get more information a sample of 20 is taken. In a subject like
retention, qualitative data is required, thus 4 in – depth interview are taken.

At the end of the survey, findings, observations, analysis and recommendations are

About Duphar Pharma India Ltd.

Duphar is an international chemical and pharmaceutical group with headquarters in

Brussels. In India, Duphar is present in the Pharmaceutical sector through its group
company Duphar Pharma India Ltd.

Duphar Pharma India Ltd. was formed in 2002 as a consequence of the demerger of
Pharma business of Duphar-Interferon ltd. Duphar Pharma India Ltd. has presence in
the field of Women Health, Gastroenterology , Mental Health and influenza vaccines.
Duphar Pharma India Ltd registered a turnover of Rs.1831 Million in 2007.

Duphar Pharma India Ltd. is head quartered at Mumbai and employs more than 360
people throughout India. It operates through two sales divisions and reaches out its
customers across the country through more than 1100 distributors.

Employee Retention Strategies - A Managing Dilemma

Findings and observations


Purpose of the question

The aim of this question was to find out the age group that exists as the maximum in
the organisation.

The maximum number of employees exists in the age bracket of 40 – 50 years.

Work Experience Before Duphar Pharma

No w ork experience
8 < 1year
6 1 - 3 years
4 3 - 5 years

2 5 - 10 years
10 - 15 years
15 - 20 years

Purpose of the question

The purpose of this question was to find out on an average what type of employees
joins the organisation, i.e. approximately how much work experience to they have.
The question also threw light on which organisations did they work earlier at and at
what level.

Employee Retention Strategies - A Managing Dilemma

Most of the employees have had a work experience of about 1-3 years before they
joined Duphar Pharma.
Most of the employees have worked in well-known firms prior to Duphar Pharma.
This shows a positive sign. To attract experienced employees is very difficult. But
with the amount of responsibility that the company provides this task of attracting
experienced employees has become simpler.

Work Experience At Duphar

< 1-2 2-5 5 - 10 10 - 15 15 - 20 > 20
1year years years years years years years

Purpose of the question

This question aims at finding the number of years that the employees have stayed in
the organisation. This would directly speak on the retention of the company. This
would also reflect on the company’s recruitment planning.
The company has most of the employees who are 5 – 10 years and 15 and more years
old. There are no employees who have had about 1- 2 years in the company.
Due to the fact that the company recruits more of the experienced people, the
company does not have a lot of fresh blood coming in. in the last 2 years not many
have been recruited. This may be positive in the sense of retention but may turn out to
be negative in the terms of ‘fresh blood’ in the organisation. This can be counter
checked by the fact that most of the employees (46%) lie between the age group of
40- 50 years.

Employee Retention Strategies - A Managing Dilemma

Current Job Tittles

Junior Deputy Senior VP /
Officer Manager Manager Director

Purpose of the question

The intention was to take the survey all through the organisation, i.e. from the junior
officer level to the vice president level.

Delegation of responsibility


Wants More Wants Less Satisfied
Gets Less Gets More

Purpose of the question

The purpose is to find how much responsibility the company gives and how much is
expected by the employees. As responsibility given can be an important criterion for
retention this question holds a lot of importance.
Most of the employees are satisfied with the amount of responsibility they are given.
But there exist a few who either want more responsibility and get less or have more
responsibility and want less.
Responsibility means the amount or the quality of the work given to the employee. In
a few cases the employee is given work, which does not have any authority or
responsibility or an imbalance of both. The employee could even be unhappy with the

Employee Retention Strategies - A Managing Dilemma

job challenges. These groups of people who either want more or have more
responsibility have to be taken care of.

Training Given

20% 33%

Purpose of the question

The purpose was to see the satisfaction level of the employees with the amount of
training given by the organisation to sharpen the employees’ skills that would help
him or her perform the tasks better.
It is found that the company is rated low at this attribute. The employees are willing to
go for training programmes to enhance their skills. But there seems rarely a chance
given to the employees.
Evaluating employee training and development activities is a must. Training
employees in the skills they need to successfully perform their job will contribute to
the overall success of the organization and improve the productivity and morale of the
employees. This is not taken into consideration at Duphar Pharma. The training
provided is very minimal and the employees are dissatisfied with this.

Communication Channel



Fairly open

Walk - in

0 2 4 6 8

Employee Retention Strategies - A Managing Dilemma

Purpose of the question

The purpose was to find out the communication process in the organisation. It was to
see whether the communication channel causes any problem.
The communication channel is fairly open. Though the perception varies from walk in
to formal systems.
Company morale suffers when employees are left in the dark. Employees feel valued
and respected when they can ask questions and share their thoughts, ideas, and
concerns. Though this does seem to be the issue with Duphar Pharma, it is important
for this idea of a fairly open communication and the formal communication (80%)to
shift towards the walk in type of a channel of communication.

Career Path Discussed


Purpose of the question

This question would indicate the amount of interest the company holds for the
employees’ future.
It is found that at Duphar career paths are not given importance. 67% of the
employees feel the need of the discussion of their carrer paths.

Career Path Reviewed

Only during
Once a
Once in 6 Once in 2
months years
0 1 2 3 4 5

Employee Retention Strategies - A Managing Dilemma

Purpose of the question

To find out that if at all careers are discussed, how often are they reviewed?
Findings- Out of the minimal 33% that have their carreer paths discussed , most of
them face this discussion only during the times of promotion. This is not a healthy
sign, this does not give the employees the idea that the organisation ‘Cares’.
If the employee does not find him climbing the corporate ladder and does not see any
further up gradation in the work he is assigned, he is not motivated to stay in the
organisation. The organisation needs to review with each employee where in the
ladder can he reach, how can he reach there and how soon can he be there. This
interest that the organisation would show would motivate the employees to stay in the

Performance Appraisal



Purpose of the question

It was to find out the satisfaction level of the employees in context to their
performance appraisal process.
The major chunk (80%) of the employees is dissatisfied with the appraisal process.
Performance appraisal is a way to recognize the work done by the employees. In most
organizations this process is directly linked to the remuneration of the employee. But
at Duphar Pharma, this process is still to begin. By recognizing an employee a
manager reinforces productive behavior, builds the individuals self-esteem, and
makes them feel appreciated. Recognition creates a corporate culture in which
employees feel good about themselves, their co-workers, and their superiors. As a

Employee Retention Strategies - A Managing Dilemma

result, employees enjoy their jobs more and have a greater sense of loyalty to the

Purpose of the question

This was to find the company’s core competency. This would tell the company it’s
strength and thus help in retaining.
It is found that the work environment that consists of freedom to work and no
harassment is the major reasons why the employees are still in this organisation.
Responsibility given is another importance reason.
At its most basic, it’s described as the personality of an organization, or simply as
“how things are done around here.” It guides how employees think, act, and feel.
Corporate culture is a broad term used to define the unique personality or character of
a particular company or organization, and includes such elements as core values and
beliefs, corporate ethics, and rules of behaviour. Corporate culture can be expressed in
the company’s mission statement and other communications, in the architectural style
or interior décor of offices, by what people wear to work, by how people address each
other, and in the titles given to various employees.
At Duphar, the employees gel with the culture and are satisfied with the work
environment, this being the company’s greatest strength.

Employee Retention Strategies - A Managing Dilemma

The recommendations are completely based on the research done at the
organisation based on the questionnaires filled and the in-depth interviews taken.
There could be a few recommendations that would sound not important for the
time being, but it is recommended not to flip over them as they could lead to
future problems.

The most important and a must is the issue of recognition.

The employees of this company are satisfied with the 2 Rs that is responsibility
and Remuneration but the third R is nearly absent. The employees need to be
Recognised for the work they to. They need to be appreciated for their good
work. One of the best ways to do this is through a good performance appraisal

The company as known is in the process of designing a performance appraisal

process. It is a recommendation to take input from the employees as to their
expectations from the process. If this system is linked to salary / remuneration
training the employees to go about the process is another important criteria. This
step whenever taken would bring about a change so it should be tried that the
change is not sudden for them and they are mentally prepared for the same.

Recognition will become an important criterion even for the new employees that
join the organisation. This is specially if the company is looking at hiring fresh
blood in the organisation. The current market scenario places more importance to
Recognition and Responsibility than Remuneration.

Employee Retention Strategies - A Managing Dilemma

Case study- WIPRO


1. Customer Support Services

2. Technical Support Services
3. Employee IT Help-desk Services
4. Insurance Processing
5. Data Conversion Services
6. Scanning, OCR with Editing & Indexing Services
7. Book Keeping and Accounting Services
8. Form Processing Services:
9. Internet / Online / Web Research

Why people prefer to join WIPRO?

In general a person with any graduation can join any of the BPO. Some BPO's like to
take people with MBA but then again the specialization are of an individual hardly
makes any difference. Again, this is the industry; where there is no reference checks
and very often people don't even specify there exact age. Lets me share with you
some of the reasons as why people prefer to join a company:
Not get a better job, Find nothing better to do, Education level doesn't matter,
Good work environment, Good Benefits, Flexibility of time, Attractive life style,
Transport facility,etc.

Why people leave the WIPRO?

When there are so many benefits associated with BPO industry, when there are so
many privileges for the BPO employees than what makes them to change the
company/industry?? Is it only MONEY that matters or anything else as well?? Here
are some of the reasons for a BPO professional to change his/her job.
No growth opportunity/lack of promotion, For higher Salary, For Higher
education, Misguidance by the company, Policies and procedures are not
conducive, No personal life , Physical strains , Uneasy relationship with peers or

Employee Retention Strategies - A Managing Dilemma

Challenges for a HR Professional in BPO

1. Brand equity: People still consider BPO to be "low brow", thus making it
difficult to attract the best talent.

2. Standard pre-job training: Again, due to the wide variety of the jobs, lack of
general clarity on skill sets, etc, there is no standard curriculum, which could
be designed and followed.

3. Benchmarks: There are hardly any benchmarks for compensation and benefits,
performance or HR policies. Everyone is charting their own course.

4. Customer-companies tend to demand better results from outsourcing partners

than what they could actually expect from their own departments. "When the
job is being done 10,000 miles away, demands on parameters such as quality,
turn around timeliness, information security, business continuity and disaster
recovery, etc, are far higher than at home.

5. Lack of focused training and certifications given this background, the

recruiting and compensation challenges of HR departments are only

Employee Retention Strategies - A Managing Dilemma

Wipro BPO FOR HR practices

Wipro Spectra mind has been awarded the NHRDN (National HRD Network)
Trailblazers Award 2004, during the International NHRD Conference 2004, hosted in
Bangalore. The award was conferred in the category of academic institutions,
corporations and voluntary organizations that have created new paths and directions
for others to emulate.

According to a press release, NHRDN has specifically recognized Wipro Spectra

mind for its performance orientation that has become central to the company culture.
The performance management system at the company is aligned to both, the business
goals and values adherence.

The company values/ operating principles are broken down into behavioral indicators
that are observed and measured on a regular basis, which in turn linked to the personal
effectiveness parameters in an individual's performance review. There is also an
ongoing emphasis on training needs assessment and people development.

Wipro Spectra mind was also noted for its innovative practices in the areas of
attracting the right talent, reward and recognition, promoting fun as a written down
operating principle, learning, employee communication and compensation which are
amongst the key reasons for the spectacular success of the company.

Employee Retention Strategies - A Managing Dilemma


A part from the legal and mandatory benefits such as provident-fund and gratuity,
below is a list of other benefits…:

1. Group Medi-claim Insurance Scheme: This insurance scheme is to provide

adequate insurance coverage of employees for expenses related to
hospitalization due to illness, disease or injury or pregnancy in case of female
employees or spouse of male employees.

2. Personal Accident Insurance Scheme: This scheme is to provide adequate

insurance coverage for Hospitalization expenses arising out of injuries
sustained in an accident. This covers total / partial disablement / death due to
accident and due to accidents.

3. Subsidized Food and Transportation: The organizations provide

transportation facility to all the employees from home till office at subsidized
rates. The lunch provided is also subsidized.

4. Company Leased Accommodation: Some of the companies provides shared

accommodation for all the out station employees, in fact some of the BPO
companies also undertakes to pay electricity/water bills as well as the Society
charges for the shared accommodation. The purpose is to provide to the
employees to lead a more comfortable work life balance.

5. Recreation, Cafeteria, ATM and Concierge facilities: The recreation

facilities include pool tables, chess tables and coffee bars. Companies also
have well equipped gyms, personal trainers and showers at facilities.

6. Corporate Credit Card: The main purpose of the corporate credit card is
enable the timely and efficient payment of official expenses which the
employees undertake for purposes such as travel related expenses like Hotel
bills, Air tickets etc

Employee Retention Strategies - A Managing Dilemma

7. Cellular Phone / Laptop: Cellular phone and / or Laptop are provided to the
employees on the basis of business need. The employee is responsible for the
maintenance and safeguarding of the asset.

8. Personal Health Care (Regular medical check-ups): Some of the BPO'S

provides the facility for extensive health check-up. For employees with above
40 years of age, the medical check-up can be done once a year.

9. Loans: Many BPO companies provide loan facility on three different

occasions: Employees are provided with financial assistance in case of a
medical emergency. Employees are also provided with financial assistance at
the time of their wedding. And, the new recruits are provided with interest free
loans to assist them in their initial settlement at the work location.

10. Educational Benefits: Many BPO companies have this policy to develop the
personality and knowledge level of their employees and hence reimburses the
expenses incurred towards tuition fees, examination fees, and purchase of
books subject, for pursuing MBA, and/or other management qualification at
India's top most Business Schools.

11. Performance based incentives: In many BPO companies they have plans for,
performance based incentive scheme. The parameters for calculation are
process performance i.e. speed, accuracy and productivity of each process.
The Pay for Performance can be as much as 22% of the salary.

12. Flexi-time: The main objective of the flextime policy is to provide

opportunity to employees to work with flexible work schedules and set out
conditions for availing this provision. Flexible work schedules are initiated by
employees and approved by management to meet business commitments while
supporting employee personal life needs .The factors on which Flexi time is
allowed to an employee include: Child or Parent care, Health situation,
Maternity, Formal education program

13. Flexible Salary Benefits: Its main objective is to provide flexibility to the
employees to plan a tax-effective compensation structure by balancing the
Employee Retention Strategies - A Managing Dilemma

monthly net income, yearly benefits and income tax payable. It is applicable of
all the employees of the organization. The Salary consists of Basic, DA and
Conveyance Allowance. The Flexible Benefit Plan consists of: House Rent
Allowance, Leave Travel Assistance, Medical Reimbursement, Special
Allowance .

14. Regular Get together and other cultural programs: The companies
organizes cultural program as and when possible but most of the times, once in
a quarter, in which all the employees are given an opportunity to display their
talents in dramatics, singing, acting, dancing etc. Apart from that the
organizations also conduct various sports programs such as Cricket, football,
etc and regularly play matches with the teams of other organizations and

15. Wedding Day Gift: Employee is given a gift voucher of Rs. 2000/- to Rs.
7000/- based on their level in the organization.

16. Employee Referral Scheme: In several companies employee referral scheme

is implemented to encourage employees to refer friends and relatives for
employment in the organization.

Employee Retention Strategies - A Managing Dilemma

Industry Interaction

Q1) Is Industry today feeling the pain of retention along with the need for
retention due to the global economic meltdown?
Ans) As though economic times lead to increased layoffs, separating employees are
not the only ones feeling the pain. Studies show employees who survive layoffs show
high levels of stress and disengagement, leading to increased absenteeism and
As free markets, new technologies, and global competition create rapid change in how
we conduct business, the only asset that cannot be imitated is the human capital
advantage of the organization. As non-HR executives become aware that financial
measures no longer provide enough data about the health of an organization,
measuring human capital is a key element to assessing organizational performance
and leveraging talent in the workforce.
A company's sales force is the most difficult to replace. Most devastating is
when your salesperson leaves you for the competition. Replacing an employee
involves all of the direct costs of hiring as well as hours of management time spent
reviewing resumes, interviewing and checking references. There are also less obvious
costs of turnover
If the only thing motivating employees is money, any employee can be easily bought
by the highest bidding company. But money is definitely not the only motivator. This
is why employees cannot always be bought with money.
Exit interviews provide one of the highest Returns on Investment (ROI's) we
can get from an employee program. Done right, we can gather new solutions
Hiring right the first time is one of the most important tasks, and the last thing we
want to do is hire the wrong person - or hire the right one who winds up leaving for a
better job. A Company needs to prevent the loss of talented employees to its
competitors .It needs to sustain and gain a competitive advantage in the marketplace.
Shaping Employees Attitude towards the Company is a vital step in this regard. A
valuable relationship inspires and influences competent employees to knit them with
the organization.

Employee Retention Strategies - A Managing Dilemma

Motivating middle management to maintain high levels of effort and

performance is part of a larger retention policy of successful organizations.

Q2) How would you explain a Rainmaker Company and the importance
of the Rainmaker Company in today’s context?
Ans) A "Rainmaker Company" is one that requires high performance accountability
on a consistent basis. Employee team members know what is expected of them and
their performance reflects this. These companies often provide strong returns to
shareholders and typically are at the top of their game. I call these organizations
"Rainmaker Companies" for a reason. "Rainmaker Companies" make the impossible
happen and get results consistently. Compared to the "till death or retirement do us
part" companies, "Rainmaker Companies" are few and far between.
"Rainmaker Companies" utilize a measured-value-add employee retention
program. In these companies, if one is not adding measured value, one is a direct cost
and it is only a matter of time until they are removed from the organization.
Harsh reality. In today's (and tomorrow's) economy, companies will be forced toward
the "value-add talent management strategy" due to economic conditions and
uncertainty. Not all companies will make the complete transition to the "Rainmaker
Company" status, but competitive economic forces will push the low-performing
companies to reassess their overall talent strategy.
If you want mediocrity - then protect the status quo by retaining low
performers for life. A company or organization cannot have it both ways. Customer
Experiences will diminish. High performers will leave for "greener pastures".
Rainmaker Companies understand the importance of...
Job Match and Fit - How each employee team member fits the job (Job Benchmark).
Results - How each employee team member is expected to add measurable value.
Accountability - Each employee team member knows what is expected of them and is
held accountable for job performance.
Performance Improvement Plan - Each employee team member has a coaching and
Performance Improvement Plan.

Employee Retention Strategies - A Managing Dilemma

Q3) Now that the economic tide has turned and jobs are scarce, a new
employee retention crisis has popped up: then how companies are
retaining too many low performers?
Ans) Few organizations have taken notice that the real employee retention / talent
management problem is one of the wrong employees being retained over the long-
run. The reality is not all employees should be retained.

Q 4) Can you suggest some strategies for retention and also throw light
on those Companies who retain low performers?
Ans) While economic conditions may be uncertain, demand for skilled IT
professionals remains strong. This competition for top talent means that if your
employees aren’t satisfied in their positions, it’s likely they may seek job
opportunities at other firms, making retention a critical issue.
Although budgets are tight, there are still effective ways to keep your staff happy.
While it’s crucial to evaluate compensation levels regularly and pay competitively,
you can keep your employees engaged using other strategies. Here are some ideas to
Keep in touch –
It’s easy to get caught up in the day-to-day business of running an IT department and
not give adequate attention to ongoing communication with employees. Meet with
those on your team regularly to discuss what they like most about their work as well
as their greatest challenges, and what they’d like to be doing at your firm a year from
now. You may not be able to promise someone a move into the executive wing, for
instance, but you can give him or her an idea of what it takes to advance and how you
will support his or her career goals.
Then provide the guidance and education your employees need to achieve their
objectives. Offering professional development or training was rated as the second
most effective tool in improving IT staff retention among chief information officers
(CIOs) in a recent survey by Robert Half Technology, with increased compensation
finishing slightly ahead.

Employee Retention Strategies - A Managing Dilemma

Encourage work/life balance

When our company and polled workers and asked which benefits
might encourage them to choose one job over another, the top response was flexible
work arrangements. It’s important to customize your work/life balance programs to
suit both your company and employees. In IT, it may not be realistic to give everyone
alternative work hours, since you need some employees on-site during certain times
of the day to help particular groups, such as end-users or remote personnel. Set some
ground rules for the arrangements so people feel the program is applied fairly
throughout the department.
Postpone the retirement parties
In addition, take a look at what your firm is doing to retain its most experienced
employees. Retirement doesn’t have to mean you lose your tenured staff – and their
valued expertise and knowledge – abruptly. You may find that you can retain
retirement-age employees by offering them different employment options other than
full-time jobs.
Build a buddy system
Mentoring is another great retention tool. Employees want to know their employers
care about their professional development, and by giving them a support system, you
help them succeed in their jobs. Mentors can be assigned to assist new hires and
junior staff, but keep in mind that they’re also valuable for more experienced IT
professionals, who may benefit from guidance in such areas as management
techniques, budgeting and advanced technologies.
The biggest danger with this talent management strategy is that market
forces inevitably change and the company will be forced to pay the consequences
of years of corporate welfare and ultimately must let people go. When this happens,
the "till death or retirement do us part" organization typically lets the most recent
hires go first. This strategy is often the beginning of the end as higher performers are
inadvertently let go in the process of saving the "most loyal".

Employee Retention Strategies - A Managing Dilemma

News articles

Reliance Cap plans Rs 100-cr ESOP for senior employees

9 Sep 2009, MUMBAI: Reliance Capital, the financial services company of the Anil
Ambani group, has decided to dole out stock options worth Rs 100 crore to senior
employees, said a person privy to the development.
The Reliance Capital board approved the employee stock option plan on Tuesday.
The plan would cover nearly 500 employees. “The employee stock option plan is
viewed as an attractive retention strategy and also to be utilised to attract new talent
to the company. It will also be an integral part of aggregate compensation for top
management team, “the same person said, requesting anonymity.
Reliance Capital will issue 12 lakh shares under the plan to employees working with
parent company and all major businesses. Shares approved for ESOP in the first
tranche will represent nearly 0.5% of the company’s equity. The shareholders of the
company have recently approved a proposal to offer up to 5% of shares through ESOP
over the next few years. The Reliance Capital stock closed flat Rs 911.85 on BSE.

'Investors should not be swayed by euphoria'

9 Sep 2009, BANGALORE: Stock market investors need to understand their risk-

taking ability and see to it that they don’t end up borrowing money for investing
in the market, says market regulator Sebi chairman CB Bhave.
Speaking at an interactive session organised by the Bangalore Chamber of Commerce
& Industry, Mr Bhave advised caution to investors who, he said, should not be
swayed by euphoria of rising stock-market indices.

"One comes across instances when people set aside money for key events in their
lives like children's education. Investing such money in stock markets whose
movements can’t be predicted can leave the investors exposed to significant risks," he
At the interactive session, Mr Bhave also agreed to review existing rules relating to
Employee Retention Strategies - A Managing Dilemma

vesting period on employee stock options (ESOPs) — notably during a merger &
acquisition(M&A). The suggestion came on the back of a poser from Mr Suresh
Senapaty, group CFO of Wipro, who was also present at the meeting.
"Current regulations insist on a minimum vesting period of one year for ESOPs.
Indian companies have to face a legal issue when during a M&A transaction an
employee’s ESOP is replaced with the ESOPs from the Indian acquirer and the
residual period of the employee’s earlier ESOP is less than one year," he said.
KR Girish, partner at audit firm, BSR & Co, says that a relaxation in ESOP vesting
norms in M&A could help new economy companies as they use ESOPs as an
employee retention tool.
Later, speaking to the media, Mr Bhave said investor response to the ASBA
(application supported by blocked amount) scheme was slowly gaining prominence.
"Only 10% of the investors had chosen this route to invest in the NHPC issue, but I
am given to believe that in the subsequent issue, it stands at 20%. One has to wait for
some time before it could be called as a success," he added.

Employee Retention Strategies - A Managing Dilemma

Executive summery and conclusion

Today, it’s a major challenge in front of every organization to have a satisfied

workforce. In the foreword to the VII 5-year plan the Prime Minister has emphasized
the importance of the Human Factor in Development:
“In the final analysis, development is not just about Factories, dams and roads.
Development is basically about people. The goal is the people’s material, cultural and
spiritual fulfillment. The human factor, the human context, is of supreme value. We
must pay much greater attention to these questions in future. The seventh plan
proposes bold initiatives in these areas. Outlays for Human Resource Development
have been substantially increased. Policies and programme in education, health and
welfare must also be reconstructed to provide a fuller life for our people.
The Human Resource Management is responsible for the entire gamut of operations
ranging from employee selection, training, upgrading, remuneration, motivation and
so much more that the list is quite endless.
Nothing is as constant as change. This being the hallmark of today, where rapid
strides in science and technology are ushering in far-reaching changes in every sub-
stratum of society, of the external environment as a whole, we are today functioning
on a global base.
Management, wide communication networking and increasing movement of human
resource in the global marketplace has not only made the Human Resource
Management’s work more challenging but also spells the need for continuous learning
in order to facilitate constant up gradation and adaptation.
The importance of Human Resource Management permeates every other aspect of
organizational working as well as the external environment.
This importance has been recognized by mankind since a long time. The challenge
before Human Resource Management to unleash that singular most important factor,
the human factor, the complex and vast human potential, in order to weave a success
story is of paramount importance and is singularly linked to a nation’s development,
to the world’s forward movement.

Employee Retention Strategies - A Managing Dilemma

Today, the HRM is a constantly learning team in a constantly changing and wide
external environment. This poses the challenge to gear and adapt an organization to
the change in terms of the need for changed organizational culture, constant learning
in functional specialization, constant redefining of roles, responsibilities,
relationships; constant gleaning of essential insights to select, retain and train the right
man with the right skill-sets at the various routine, tactical and strategic decision-
making areas; at the various levels of organizational hierarchy; so that performance
and productivity is optimized.
An increasing number of Hard-headed business leaders have been saying that ‘The
ability to learn faster than competitors may be the only sustainable Competitive
A learning Company is described as, ‘One which facilitates the learning of all its
members and continually transforms itself as a whole’
NARAYANAMURTHY of Infosys says, “My assets come in at 9 AM and leave at
5 PM”.
Successful HRM is therefore all about effective selection, training and most
important of all, RETAINING.
Retention strategies need to be inbuilt into the HR functions in order to enable
an organization to utilize its resources optimally through successful retention of
valuable Human Resource, ‘MEN’ which alone can optimally plan and utilize
the other three scarce resources of ‘MATERIALS, MACHINES and MONEY’

One of the primary conclusions from this study is that the factors that most
significantly contributed to an employee’s satisfaction with a position were similar to
the factors that contributed to the likelihood of an employee seeking employment
with another organization.

A second conclusion based on the findings of the study is that supervisors

depended heavily on the human resources function as an adviser and a source of
general assistance in the effort to retain their critical employees.

A third conclusion from this study is that employees seem to increasingly

Employee Retention Strategies - A Managing Dilemma

want a flexible work schedule. Flexible work schedule was cited as one of the main

reasons for deciding to remain with the Company if offered employment with
another organization. The benefits of retaining the critical employees include the
ability of the
Company to achieve its strategic business objectives and to gain a competitive
advantage over its current and potential competitors. Supervisors were willing to
invest to retain their critical employees rather than to risk reducing productivity and
profitability given the turnover of a critical employee.

These conclusions indicate that organizations should identify their critical

employees; understand their needs with regards to career, family, education, and
community; and be able to continuously meet the expectations and needs of these
employees. It is through proactive efforts that the organization can reduce the
likelihood of losing the critical employees.

Employee Retention Strategies - A Managing Dilemma


Websites referred:




Books referred:
• Strategic HRM by Minakshi Kishore. (Pg. 170,172,176)
• Productivity Management by Joseph Prokopenko (Ch.7)
• Personnel management and HR by C.S.Venkata Ratnam
• Cultural strategy by B.K.Shrivastava
• Strategic management and business policy by Azar Kazmi
• Case studies in HRM volume by ICFAI
• Human Resource Management by Dr. Anjali Ghanekar

Employee Retention Strategies - A Managing Dilemma

Newspaper referred:
The Times Of India (Times Business), August 25, 2009.