Employee retention is very important to organizations. If employees can not be retained, the company will have to invest money for training new employees time and time again. The cost of replacing an employee is high not only financially, but in terms of lost productivity, the time taken by the employer to go through the resumes and the cost incurred to conduct interviews. The best away to avoid this costly affair is to focus on the retention of employees as otherwise it will have a castigating effect on the organization as a whole.
By taking a look at the past it is possible to avoid the mistake of losing your central operating powers in the future.
When an employee leaves the organization, the employer must make it a point to conduct exit interviews to know the reason for him to quit the organization.(pg 161 Dessler) The employer’s real skill lies in identifying the real motive of the employee to quit the organization, because most of the employees reveal the false reasons.
At the same time he/she must also equally concentrate on the rest of the employees who have not yet left and indulge in casual conversation to keep their morale high.
Turnover can be a positive process when an employer manages to bring new recruits, along with their new ideas and vigor into the organization. Yet, unmanaged employee turnover can easily steal your company’s knowledge base, profits and competitive edge in the market. With today’s high employment levels, organizations that don’t actively manage turnover’s impact, find that the balance of power has shifted from the employer to the employee. Excessive turnover is often a symptom of fundamental problems within the business.
It’s critically important to retain them; to do this one must know what motivates an employee to stay at a particular company. “The top two reasons employees stay with a company are (1) they feel the company cares about them and (2) they feel their work efforts are important to the growth of the company.” (Saxby) Many companys make the mistake of thinking base salary is the only aspect of a retention plan for important employees. Employee morale is more important than money.
Family-friendly policies are the blending of family and work, which has increased significantly in the last 20 years. This phenomenon has created a need for growing interest in workplace policies and programs to enable workers to balance their work and family responsibilities. Corporations seeking to attract new employees and hold onto their existing work force are attempting to be creative with the promise of flexible schedules, flexible benefits, job sharing, onsite day-care facilities, telecommuting, special deals on parental leave, generous family health care packages and numerous additional individualized incentives that respond to the work- and home-life balance. The appearance of family-friendly policies help employees balance their lives between work and their families.
That can mean higher productivity, better morale, and fewer turnovers among staff. To humanize the work setting it would be appropriate to set up day-care facilities at working companies. This gives the working parents the security that their child is being taken care of within the same premises. Not only will it benefit the parent, but also the company, for it would make the company more prosperous. Such cases in which parents would stay late the parent could finish their work without any worries. Establishing a day-care center will cause no worries for the parent in finding a babysitter, reduce absentees or tardiness of the employees, and parents would be able to spend time with their children.
Another retention method used is flexible work schedules. The impact flexible work schedule’s have had on organizations have been quite positive, benefiting both the employer and the employee. Such benefits include increase in productivity, employee retention, motivation, and a decrease in absenteeism, tardiness, stress, and turnovers. Companies that have successfully adopted this method include Hewlett-Packard, Baxter International, Nabisco, and Dupont, among others. Do flexible work arrangements really improve employee retention? A recent survey, sponsored by the American Institute of Certified Public Accountants (AICPA), found that CPAs on flex become more efficient with their time and, because they are grateful for the arrangement, work harder. More than 80 percent of the CPAs surveyed, reported that if their flexible work arrangement had not been approved, they would have left the firm. (PCPS)
Flexible benefit plans can be a positive resource for retaining employees. Employers’ that provide flexible benefit plans show the desire to increase employees’ loyalty to the company. In an increasingly tight labor market and faced with the necessity of operating as efficiently as possible, in order to remain competitive, employers view the flexible benefit plan as a tool to enhance employee morale. Flexible benefit plans are also used to improve employer-employee relationships, reduce overall costs of providing benefits, and reduce the incidence of employee turnover.
Compensation issues focus on the diversity of worker needs, pay-for-performance plans, and the regulation of employee benefit plans. Flexibility and adaptability in HRM practices are primary keys in addressing worker needs. Job sharing, staggered scheduling and flextime are some of the outcomes generated by creative approaches to HRM practices. Pay-for-performance plans hold the allure of rewarding productivity while providing monetary motivation. Successful implementation of such practices, however, requires effective performance evaluations. Incentive pay plans can be advantageous to both the employer as well as the employee.
The success of an incentive pay plan depends on the organizational climate in which it must operate, employee confidence in it, and its suitability to employee and organizational needs. Importantly, employees must view the incentive plan to be equitable and related to their performance. Performance measures should be quantifiable, easily understood, and bear a demonstrated relationship to organizational performance. The role of Human Resource Management must constantly be refined to add greater value to an organization. HRM has a responsibility to employees to provide for their long-term development and a commitment to continuously afford employees with opportunities for personal and professional advancement.
Today, many companies are providing incentives for employees to stay with the firm and allowing them to share in the growth of the company. One major concern employers often have is whether or not the resources committed to employee development will benefit business performance. That concern however, should not discourage corporations from offering assistance to employees. If a business has the time, wherewithal and the know-how to aid and assist its employees, it should, by all means, do so. As the turnover rate continues to rise to its highest levels in nearly a decade, it’s good to know that finding, hiring and keeping the right people can be accomplished today with more than just subjective observation, opinion and emotion.
Dessler, Gary. Human Resource Management. Prentice Hall, 2003.
PCPS NEWS RELEASES,http://www.pcps.org/member/releases_may22_02.html,2002
Saxby ,David. What Can Retailers Do About Employee Turnover? http://www.measure-x.com/tips/empturnover.html
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Employee retention. (2016, Jun 19). Retrieved from https://studymoose.com/employee-retention-2-essay