Employee Retention

Employee Retention 


In today’s highly competitive labor market, there is extensive evidence that organizations regardless of
size, technological advances, market focus and other factors are facing retention challenges.There are indeed many employee retention practices within organizations, but they are rarely developed from sound theories. Swanson (2001) emphasized that theory is required to be both scholarly in itself and validated in practice, and can be the basis of significant advances.

Given the large investments in employee retention efforts within organizations, it is impotent to identify,
analyze and the motivation theories underlying employee retention in organizations.

One of the major reasons of the importance of retaining employees is it affects the employee cost of an organization to a great extent.Also there are so many other reasons as to why employee retention is important for an organization.

Thus, there is significant economic impact when an organization loses any of its critical employees, especially given the knowledge that is lost with the employee’s departure.

It will become significantly more important in the years ahead to recognize the commitment of individuals to an organization, as well as the organization’s need to create an environment in which one would be willing to stay (Harris, 2000).

Retention planning

The turnover of key employees can have a major impact on the business. The people organizations wish to retain are often the ones most likely to leave. It was claimed by Reed (2001) that: ‘Every worker is five minutes away from handing in his or her notice, and 150 working hours away from walking out of the door to a better offer. There is no such thing as a job for life and today’s workers have few qualms about leaving employers for greener pastures.’
Concerted action is required to retain talented people but there are limits to what any organization can do. It is also necessary to encourage the greatest contribution from existing talent and to value them accordingly.

Factors affecting retention

Retention strategies should be based on an understanding of the factors that affect whether or
not employees leave or stay. For early-career employees (30 years and under) career advancement
is signifi cant. For mid-career employees (age 31–50) the ability to manage their careers
and satisfaction from their work are important. Late-career employees (over 50) will be interested
in security. It is also the case that a younger workforce will change jobs and employers
more often than an older workforce, and workforces with a lot of part-timers are less stable
than those with predominately full-time staff. The other factors that affect retention are:

• company image;
• recruitment, selection and deployment;
• leadership – ‘employees join companies and leave managers’;
• learning opportunities;
• performance recognition and rewards.

A study by Holbeche (1998) of high flyers found that the factors that aided the retention and motivation of high performers included providing challenge and achievement opportunities (eg assignments), mentors, realistic self-assessment and feedback processes.

Analysis of reasons for leaving

Risk analysis provides specific information on areas for concern. Reasons for leaving can be
among st the following.

Possible reasons for leaving

• More pay.
• Better prospects (career move).
• More security.
• More opportunity to develop skills.
• Unable to cope with job.
• Better working conditions.
• Poor relationships with manager/team leader.
• Poor relationships with colleagues.
• Bullying or harassment.
• Personal – pregnancy, illness, moving away from area, etc.
People Resourcing Practice 505


References

Armstrong M,A handbook of Human Resource Management Practice,13th Edition,London.
Harris, J. (2000). Finding and keeping great employees. Training, 36(4), 118-123,
CIPD (2008a) Survey of Recruitment, Retention and Turnover, CIPD, London.
Swanson R.AC, (2001),Foundations of Human Resource Development,Berrett-Koehler Publishers.