Unit 4 employee retention

1. Unit 4 -
Employee
Retention
By Prachi Agarwal

2.  Employee retention refers to the ability of an organization to retain its
employees. Employee retention can be represented by a simple statistic
(for example, a retention rate of 80% usually indicates that an
organization kept 80% of its employees in a given period). However,
many consider employee retention as relating to the efforts by which
employers attempt to retain the employees in their workforce. In this
sense, retention becomes the strategies rather than the outcome.
 A distinction should be drawn between low-performing employees and top
performers, and efforts to retain employees should be targeted at
valuable, contributing employees. Employee turnover is a symptom of
deeper issues that have not been resolved, which may include
low employee morale, absence of a clear career path, lack of recognition,
poor employee-manager relationships or many other issues. A lack of
satisfaction and commitment to the organization can also cause an
employee to withdraw and begin looking for other opportunities. Pay does
not always play as large a role in inducing turnover as is typically
believed.

3. Comprehensive approach to
Retaining employees
 Strong hiring trends are causing businesses to focus
more on employee retention, according to the Society
for Human Resource Management (SHRM). An
employee retention strategy can also be integral to a
company's talent management and human capital
management strategies. When businesses begin to
approach employee retention in a systematic way, it
can be challenging to determine the best way to move
forward. Here's a look at five elements you can
implement to help build a comprehensive staff retention
strategy at your company.

4.  Better Recruiting From the Beginning-A winning retention strategy starts with your
hiring process. While you should focus on hiring the most qualified individual for any
position, companies with great retention records also prioritize a long-term fit during
the interview process. What are the candidate's long-range career plans and is your
company able to offer those opportunities? Is a candidate a good cultural fit with your
business' objectives, priorities, and work style? Does the candidate have a stable
track record, or does he or she tend to change jobs frequently? By looking for a
strong fit from the beginning, companies may have more control over employee
retention.
 Training Your Managers to Foster Retention-Your managers may be one of the
most important elements of your company's employee retention strategy. As the
saying goes, workers don't leave companies; they leave managers. Helping your
managers understand their role in employee retention can be an important step
toward strengthening employee relationships. Ensure your managers understand
why retention is a strategic priority. Focus on training managers in basic skills that
foster productive relationships and a positive work environment. When leaders set a
great tone, talent is more likely to stay

5.  Measure and Support Engagement-Employee engagement is another
critical component of a long-term retention strategy. Employers can foster
engagement in many ways, such as demonstrating that you value
employees' work and ensuring that they understand and work toward the
company's mission. Investing in team-building and strong relationships
throughout the company may also be important for keeping your
workforce connected and engaged.
 Show Recognition in Multiple Ways-Recognizing the contributions of
employees and showing that they're valued is possible in many ways:
compensation, benefits, and bonuses may be the most traditional. Yet
employee recognition programs that offer awards, VIP parking spaces,
small gifts, and other public acknowledgements of a job well-done may
also have a positive effect on employee retention.

6.  Frame the Long-Term Career Trajectory-Employees are more
likely to stay with companies where they know the possibility
exists to grow their careers. Help candidates understand where
each position can lead. Take the time to find out what employees'
goals are and discuss different strategies for achieving them,
from allowing them to take on more responsibility to helping
defray the cost of their education.
 Employee retention is an important part of a successful human
capital management strategy. By focusing on elements such as
growth opportunities, hiring the right staff, training your
managers, and investing in employee engagement, companies
can see employee retention rates rise even in today's tight labor
market.

7. Managing Voluntary Turnover
 Voluntary turnover is a type of turnover that occurs when
employees willingly choose to leave their positions.
Employees might choose to vacate their jobs for a variety
of reasons. They may feel dissatisfied with their position
or their compensation, they may be seeking a career
change, or they may have accepted another offer.
While involuntary turnover usually involves employees
being let go for unsatisfactory performance, voluntary
turnover often involves competent employees leaving their
positions. As a result, voluntary turnover can be very
expensive for an organization because of the costs
associated with recruiting and hiring a new employee.

8. Managing Voluntary Turnover
Hardworking human resources departments expend
a lot of effort trying to fill an open position with the
right job candidate. Once this position is filled, the
hope is that the new employee will prove to be a
hard worker who stays with the company. All too
often, job positions open again when an unsatisfied
employee takes another job. This can be a frustrating
chain of events, but there are steps you can take to
reduce this type of voluntary turnover.

9. 1.Create an environment that encourages trust and communication.
Give your employees new tasks or greater responsibility with their
current tasks. This demonstrates that you trust your employees and
feel that they are competent to complete the assignment.
Communicate to them what your expectations are and what the time
line for the assignment looks like. When the task is completed, give
them feedback.
2.Give employees a goal, and recognize a job well done. You can do
this by helping your employees develop a career plan. Ask them
where they would like to be professionally in one year, two years and
five years. Then help your employees set goals to reach these
professional levels. When goals are accomplished, let your
employees know that you have noticed. Set up a small rewards
system to add incentive. This helps your employees to feel more
invested in and happy with their jobs, causing them to be less likely
to leave.

10. 3.Invest in training your employees. Provide the professional training
and tools they need to succeed. If an outside training course is
needed or new office equipment would increase efficiency, make the
investment. This action on the part of the company makes the
statement that your employees are valued. When people feel
appreciated, they are more apt to stay.
4.Remain competitive with other companies. Voluntary turnover can
arise from an opportunity for a better job. Examine your benefits
package -- your company's 401k plan, health insurance coverage
and vacation. Make it equivalent to or better than similar companies
to reduce turnover. Also, look at what you are paying your
employees. Determine whether your starting salaries are competitive
and whether promotions and raises are in line with or better than
your competitors.

11. 5.See to it that you do not overburden or stress out
your employees. Sometimes companies add too
much responsibility or pressure to existing
employees instead of hiring new people to share the
load. This attempt to save money can unintentionally
backfire, causing dissatisfaction in your current
employees. Dissatisfaction in a current job leads to
looking elsewhere. Instead, keep your employees'
workload and deadlines at a challenging but
attainable level.

12. Strategic Compensation plan for
Talent Engagement
 Compensation: A key tool for talent
management
 Remember that compensation can be a key
recruitment and retention tool, and should
always be leveraged to motivate employees
toward business objectives. Use
compensation plans to reward all employees
for business success, or to recognize
individual contributions toward that success.

13. Five strategies for Engaging
Employees through
Compensation
 Paying for Competencies-Analyse key organizational
positions to determine what competencies in employees
differentiate the average from outstanding in terms of
performance. Particularly those competencies most
critical to achieving the organization's future focused
objectives. Once determined, these competencies offer a
benchmark against which to compensate employees.
 In addition to expanding position, salary bands,
competency-based compensation might involve merit-
based pay, spot bonuses, year-end bonuses, stock
options, or other rewards predicated on outstanding
performance- instead of hierarchical advanceme

14.  Offering "Proxies" for Promotion-In today's delayered organizations,
traditional symbols of advancement - bigger budgets, more subordinates,
etc.- are now redundant as indicators of success. Instead, streamlined
organizations can identify typical compensation packages associated with
senior positions, and then incorporate these benefits into lower-level
positions. In other words, talented employees can be given a "proxy" for
promotion. This proxy might be an opportunity for professional
development or a chance to increase one's visibility, responsibility, or
authority.
 For instance, instead of being given traditional promotions, star
performers might be asked to meet with important customers, participate
in strategic planning sessions, make presentations to senior
management, represent the company at professional gatherings, or work
on high impact projects.

15.  Rewarding Employees to take Charge-Employees,
must seize the initiative to get ahead and rewarding them
to do so can result in engagement as well as skill
development of the workforce. When an incentive is
coupled with tools and resources to facilitate career and
professional development, there is an opportunity and
reward on offer which most employees in the modern
workplace realise is a win-win situation and generally
leads to higher engagement in the workplace. As there is
a clear desired result which the company demands along
with a reward attached to it, employees are more
engaged in trying to achieve it because of the reward and
added benefit of personal growth

16.  Aligning Organizational values with Rewards-
In an effort to direct the organization towards its
strategic goals, companies can also define values
and behaviour that contributes to this goal and
reward employees who consistently exhibit these
values and behaviour. This strategy is effective
when there is a need to reinforce an
organization’s company culture into it its
employees and also becomes a useful tool
to build morale.

17.  Clear and Transparent Compensation system-A fair
compensation system at work which shows
transparency in current bonuses, wages and any
benefits linked to the positions of different employees
and their contribution to the workforce helps
promote engagement. Employers should provide role
models or ideal characters they prefer and also
demonstrate the compensation they offer to such role
models, which helps employee understand the ideal
type of behaviour to duplicate which ensures
engagement and productivity.