Employee Retention Strategies

Introduction

In today’s context the retention of employees in an organization has become a greater challenge and therefore, this has become a most talked and a discussed topic around the globe. As per Reed (2001) ‘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’ Armstrong (2010). For organizations retention is important in order to retain talent within an organization therefore, it is important that organizations keep a track on the employee turnover and the reasons as to why employees are leaving. This has given birth to the retention strategies within the organizations.

Employee Turnover and Retention'

Employee Turnover

You can find many definitions of Employee Turnover and the Types of costs involved in it. As per CIPD Article which is written in 2017 Employee Turnover is the proportion of employees who leave an organization over a set period (often on a year-on-year basis), expressed as a percentage of total workforce numbers. It is also defined as the rate at which the employees leave an organization (Armstrong, 2010). It is also the Employee turnover is the proportion of your workforce who leave during a period of time (usually per year) Bright HR (2018).

As per CIPD (2017) Article Employee Turnover can be measured as follows,

Employee Retention

As per CIPD (2007) Article on Employee Retention, it relates to the extent to which an employer retains its employees and may be measured as the proportion of employees with a specified length of service (typically one year or more) expressed as a percentage of overall workforce numbers. It also defines Retention as the proportion of employees who stay (Bright HR, 2018). It’s also stated as the Percentage of employees that is remaining in the organization Phillips, Connel and Routledge (2004).

As per CIPD Article written in 2017 Employee Retention can be measured as follows,

Reasons Why Employees Leave Organizations

If we consider the reasons as to why people are leaving organizations the answers we get might vary from a person to a person. But if we consider and categorize them we might be able to simplify the reasons further. With many of the researchers carries out by different persons considering these factors they have come up with different theories. One theory is which are popular amongst us is the Maslow’s Hierarchy of needs which have been introduced by Maslow in 1954.

                       Figure 01: Maslow’s Hierarchy of Needs

             Source: Maslow and Stephens (2000), Jerome (2013)

Maslow has identified 5 major needs that people want to fulfill. They are Physiological needs which are basic needs as Food, Water, 2^nd is Safety needs such as safety, security, 3^rd Belongingness, and love needs such as intimate relationships, friends, 4^th Esteem needs which are prestige and accomplishments and the lasts the Self-Actualization needs. The theory states that people’s needs will be fulfilled one after the other starting from Physiological Needs to Self-Actualization needs. 

Dessler (2011) has explained that how each of the needs will affect a person. For example as Esteem Needs a Senior Manager may need a luxury vehicle in order to build his image, House rent allowances. Sponsoring their children’s education. As Belonging and Safety need a Junior Manager may expect Development, Motor Vehicles, a better relationship with their Managers and secure Jobs. As Physiological needs, operational staff may expect a decent salary to live comfortably with the necessary training to improve their skills, a better relationship with the management, self-respect and work-life balance.

In Armstrong’s book written in 2014, has stated that even different age categories have various expectations such as 30 years and under employees who have just started the employment need career advancements. For Age between 31-50 who are in the middle of their career needs managing their careers and work satisfaction. Finally, the employees aged over 50 who are in the post-career stage expects the Job security.

The other theory which is popular among studies is the Frederick Herzberg’s Two Factor Theory. There, he talks about two factors 1^st is the Hygiene factors and the 2^nd is the Motivating Factors. He says that for any person to be fully engaged and satisfied with their job individuals need to fulfill both of the Hygiene and Motivational factors. If only the Hygiene factors are satisfied he or she will be just satisfied with their current job, and if only motivational factors are satisfied they’ll only be motivated but not satisfied. Therefore, he says in order to retain an employee, an organization needs to satisfy both Hygiene and motivational factors.

Further, he states that in order to retain an employee, a manager should always concentrate on the motivational factors so that the employees will be motivated and recognized. (Dessler, 2011)

                            Figure 02: Herzberg Two Factor Theory

                   Source: Herzberg, Mausner, and Snyderman (2010)

Armstrong has also stated some other factors which employees consider as the reasons for them to find another place to work. They are as follows,

• more pay
• better prospects (career move)
•  more security
•  more opportunity to develop skill
• 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 the area (Armstrong, 2014)

Wigert (2018) states that people are more interested in career development and growth together with the appreciation and rewards. It also states that employees need to be fully engaged in their job for them to remain within an organization for a longer period. In the article of Harvard Business review written by Johnson (2018) also states that the main reason why the employees leave an organization is that of the fewer opportunities available to grow within. She further explains that when employees don’t let employees grow within an organization that the employees will feel as if they are unrecognized and that their efforts do not matter to the organization. As a result, people get disappointed and would be less effective in their jobs.

In the Article why people really quit their jobs written in Harvard Business review in 2018 states that the employees are leaving the organizations when their work is not enjoyable, their strengths are not recognized and are not used, and that they don’t have the opportunity to develop their carriers. Hence, we could state that lack of Development, recognition, rewarding systems, poor relationships with management, job insecurity drives employees to leave the organizations.

In my work experience in the two previous workplaces, the main reasons why the people left the organization was due to the change that took place in the structure, the relationship and the attitude of the Manager. In the first company where the change took place put pressure on the people within the company. The Organization was trying many ways of reducing the cost and it resulted in taking many actions which pressurized the employees. The downsizing, outsourcing of departments, changing the management were few steps they were taking during that time. Due to outsourcing and change in management employees were disappointed and it didn’t give the employees to build a favorable relationship with the management. Since there was a culture where the communication was taking place from the superiors to the subordinates the change had made them frustrated and disappointed about work. It also made us feel that this will not give us the opportunity to share our opinions, whether the new change will listen to what we say or will it give us the opportunity to grow. I personally saw people leaving the organization very soon due to this and I believe even I left the organization due to these reasons and that the change in management within our department was not what we expected, and was one way directed without informing employees.

The second instance was due to the relationship and the attitude of the manager we had. He joined the company for a senior post and his attitude affected the work. People felt that it was very difficult to work with him since he was not process-oriented and didn't have a good understanding of the particular operation which we were involved in. Almost all the employees had arguments with him every single day due to these mismatches in the way we used to work and how things were happening now and this led us with frustration and demotivated. Almost 3 employees left in a row due to this situation. Finally, the junior manager who was there left due to the frustration that she was not given the opportunity to work or to perform. This made the balance employees too with uncertainty and frustration. Though we were remaining and surviving none of us were able to give our maximum as we did before he joined our company. And still the environment is the same and we are left alone and unheard.  

Retention Strategies and it’s important to an Organization

Retention strategies are the ways organizations will try to keep their employees with them. Any employee retention strategy would necessarily include a plan for redressing employee grievances and ways and means to address employee issues (Juneja, 2018). It also states that this should give employees the opportunities to talk to the HR managers on all the issues that they are facing and to get satisfactory feedbacks or answers from them. It further says that in hearing the employee’s issues that the HR manager should be able to give a fair feedback or a decision to the employee by discussing the matters with both the employee and the immediate manager of the said employee.

Retention strategies aim to ensure that key people stay within the organization and that wasteful and expensive levels of employee turnover are reduced. They will be based on an analysis of why people stay and why they leave. (Armstrong, 2008)

Important of Retention Strategies to an Organization

As discussed so far employee retention is important to an organization. But in order to manage it, companies need to have some strategies built within the organization so that people will not leave the organization. Juneja (2018) on Management guide has stated several reasons for the importance of having retention strategies in an organization.

•  Due to the complexity of hiring the correct people for the relevant post. In her article, she says that the time we need to spend on recruiting a person is lengthy and sometimes though we make time to do so we might not be able to find the right person after all the effort we have taken.
• The Process involved in grooming a newcomer and an existing employee take two different aspects. When we work with an existing employee we don’t need to incur much of a cost in grooming him and making him understand the culture. But the new employees take a higher cost and time in teaching, Coaching and grooming him compared to the existing employee. If people start to leave the company more often than the company will have to incur a lot of costs and the time spent on the training and development will be wasted.
• In order to stop your employees joining your competitors. This is a huge risk which is faced by the organizations nowadays. If the organizations don’t have proper policies on this it will lead to a leakage of trade secrets, formulas, important information, strategies, and policies. Juneja (2018)
• Longer the retention is easier and dedicated the employees will be to the organization. It’s easy for the companies to work with well familiar people rather than people who are new. The people who have extended number of years of service will know the culture very well and it would be easy to train them and they are easier to adjust and it gives them the opportunity to perform best in the position they are in.
• Finding talented and dedicated employees are rare. Organizations can find employees but replacing a top performer up to his or her standard is impossible. Therefore, it’s important to retain those star performers.

No matter how many strategies that organizations are coming up with to retain employees they will leave if they will not get an overall package of satisfaction and motivation. Therefore, it is very important for the management to understand and create a better working environment.

As stated by Cappelli, (2000) he believes that the market is determining whether the employee is leaving the organizations and not the organization. Cappelli has stated – ‘you can’t shield your people from attractive opportunities and aggressive recruiters’, and has suggested that: ‘the old goal of HR management – to minimize overall employee turnover – needs to be replaced by a new goal: to influence who leaves and when.’ It is further stated that this could happen only by analyzing the risk in order to quantify the risk of losing people. (Bevan, 1997). He further has stated that the organizations need to keep in mind the likelihood of this occurring, how serious the effects of a loss would be on the business and the ease with which a replacement could be made and the replacement cost of it in designing the Retention Strategies.

Armsrtong (2004) states that the following strategies could be followed by organizations to retain their employees,

• Understanding the role of the particular vacancy which needs to be full filed and making sure that the selection and the promotion process will be able to satisfy the need of the organization.
• Identifying the low-performers and providing with a successful training and development programme to make sure that they’ll be well trained and would perform as expected by the organization.
• An Effective job designing in order to bring out the best in employees which help them to learn and develop themselves
•  Coming up with an attractive and competitive pay system to satisfy the employees
• Enhance the team building and trust among the employees.
• Introducing policies to maintain the balance in work and life such as flexible hours.
• Introducing an employee-friendly working environment within the organization.
• Providing the managers, team leaders and supervisors in how to manage their teams and to take the best out of their teammates.
•  Introducing policies to enhance the job engagement so that it could attract employees to remain in business.

It further states that the organization should always listen to the employees especially in situations of bullying and harassment so that they will leave the organizations due to the disputes that they have with their managers. It is also stated that the organization always need to introduce flexible strategies which will give the employee the opportunity to be flexible and perform at work. (Atkinson, 1984). Atkinson (1984) further have explained that company should think of outsourcing and encourage multitasking among the employees.

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.

As per Schwantes (2017) has mentioned some of the ways to retain your employees. These are making your employees feels like business partners, be transparent, exposing them to new responsibilities, treating them with respect and dignity, Getting their feedback, letting your stars mentoring employees, creating a learning environment, making sure that their goals and the tasks are monitored while mentioning the value of them, creating a culture of recognition and praise and finally giving them the opportunity to voice out.

John Keels group for its resort sector has introduced a programme in order to cover up their vacancies of the executive Levels by introducing Talent Acceleration Programme ITAP) and for supervisory level Management Acceleration Programme (MAP). It also provides the necessary training for all the staff by offering the classroom facility, on the job training in order to improve skills, productivity, service quality, and value.

In the Article Richard Branson: three ways to keep employees happy which are written by Preston (2013) states the Strategies that Virgin group is using in order to retain their employees. It talks about 3 things. First is the freedom which needs to be given to your employees. Richard Branson believes that giving the freedom has helped them to enter the new markets. Second, he has mentioned it’s the foresight which is important in the business. He further explains that you need to know your employee and what they really expect from the organization and if you don’t then it would be difficult for both of you to work together. Finally, the element he says is not to panic when employees learn and try to be the leaders or owners of their jobs, he says you need to think it as an opportunity and use it in a way which is beneficial for you.

Brandson (2015) states on How to keep your best staff he said that you need to listen to your employees and that it helps the company to come up with great ideas. He says that Virgin Money and Virgin Train is practicing this in the group and it has led to more innovations and staff retention. He also has stated that this will make the employees think that they are being heard, succeeded and valued and it will encourage them to have faith in the organization. He simply has said: “if you take care of your employees, they will take care of your business”

Elizabeth (2015) states about Google’s retention strategies. She has mentioned that freedom, a healthy work-life balance, incredible perks, and even the chance to have fun at work have made the employees at Google to remain in the organization. For this, she has stated the reason behind the Google’s exceptional success is due to the nurturing and celebration of the staff. Further in the article she has stated what Laurence Collins, Director of HR and Workforce Analytics at Deloitte has mentioned to her during the discussion as “What HR should and must focus on is understanding the relationship between the things which motivate and engage people as individuals” “The environment, work, growth, reward and flexibility it offers, [are] part of the employee proposition.” Fun at work, Job perks, the opportunity which is given to the staff to learn and develop themselves, Letting the employees voice to be heard and treating the staff with respect and care, she explains that when most of the companies concentrate on profits and not about enhancing the employees conditions that Google have proved very well that it could do better when you provide the employees an appreciable lifestyle at work.

 Conclusion

It is evident that retaining employees in an organization is very important not because it is a lengthy process to recruit people and that it incurs a lot of costs. It is mainly because the employees' talent, dedication, knowledge will not be able to replace once it goes out of your hand. Therefore, in order to practice retention in an organization, it is very important that it starts by analyzing what is and what is not important to the organizational achievements. It also should start from the very beginning of the HR process which is the selection and recruiting and should move on the whole HR process including Training and development, Employee engagement and create a better working environment. Therefore, in designing the Retention strategies the company should make sure to involve all the members in the organizations and make sure that the strategies will be practiced not only at the high level but also in the lower level since the talent at each stage of the organizational hierarchy is important in achieving the overall goals. 

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