Employee Retention – a key to business growth

The importance of Employee Retention

In recent days, Employee Retention has become an important factor for the prosperous and smooth run of business. But the more it is important, the more it has become difficult because of current market competitions and huge diversity in employee benefits in different companies.

When employee retention is focused, it leads to greater organizational stability and productivity. Management must take the initiative to provide strategies for improving Employee Retention

The loss of top performers is an unsettling prospect for any organization, but it can be minimized by taking proactive steps to eliminate the root causes of turnover. One positive sign for the economic recovery is that employers plan to invest in their existing employees again.

Benefits & impacts of Employee Retention on business growth

• Retaining the existing talent eliminates the cost of hiring and training a new entrant.
  Employee retention makes the company attractive place for the prospective talent outside.
• It usually speeds up the operations because exit of an employee and joining of new entrants are common speed breakers.
• Retaining existing staff maintains strong bond between employees. If talent is not retained properly, it will result in staff turnover which is usually infectious.
• Retaining employees keep the company strong and well-managed internally. If the company would be well-managed from inside, it would be relatively easier to cope with external challenges.
• In banks or other financial sectors, while an employee leaves the company and joins the competitor, there is often a big risk of spreading the confidential procedures.

Risk of huge turnover

The cost of replacing lost talent is almost two times of that employee’s annual salary. There are expenses for advertising and recruiting, orientation and training of the new employee.
There is also decreased productivity until the new employee is up to speed, and loss of customers who were loyal to the departing employee.

There are various signs that predict the employee’s intent to leave the company, such as: absenteeism, personal problems, decline in work habits, change in attitude, etc. If such sign are noticed earlier, pre-emptive measures can be taken to retain the existing talent.

How to maximise Retention?

Most common reasons employees leave are lack of advancement opportunities, difficulties with management and insufficient recognition. So here are the steps to maintain retention:

• Provide training and formal mentoring programs to show employees that we support their professional growth and development.
• Promote an open-door culture where employees are encouraged to communicate about problems and concerns without fear of reprisal.
• Encourage the staff by giving rewards for their better service or by public
  ly praising the staff when they do a good job.
• Favouritism should be strictly avoided as it creates distrust among loyal staff.
• Get employees’ feedback about how to make improvements in processes or policies.
• Giving the staff the chance for internal promotions.
• Annually review the current market pay scale in order to revise salary structure.
• Provide employee incentives such as: paid days off, movie tickets, dinner for two at a favourite restaurant, gift vouchers, etc.
• Promote sport activities, outdoor dinner, trips or tours, community works, etc
• Supervise the relationships between people. Don’t accept poor management behaviour and poor work ethics.
• Communication should be open between employees. If there is friction between two employees, they should have an informal meeting with a Manager.
• Meet one-on-one with the employee and ask frankly if he or she is looking for a new job. If the employee acknowledges conducting a job search, find out the reasons why and propose corrective steps.

Illustration: If the employee is looking for work at a more senior level, offer an expansion of responsibilities, if appropriate. For employees looking for new challenges, discuss ways their current position could be fortified or propose lateral moves within your firm eg. Moving from customer service to admin dept. If the individual is having problems with a specific co-worker or manager, explore the possibility of reassignment to another division or supervisor.