Employee retention

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. 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 job 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. In a business setting, the goal of employers is usually to decrease employee turnover, thereby decreasing training costs, recruitment costs and loss of talent and organisational knowledge. By implementing lessons learned from key organizational behavior concepts, employers can improve retention rates and decrease the associated costs of high turnover. However, this isn't always the case. Employers can seek 'positive turnover' whereby they aim to maintain only those employees whom they consider to be high performers. In today's environmental conscious behavior society, companies that are more responsible towards environment and sustainability practices can attract and retain employees. Employees like to be associated with companies that are environmentally friendly. Studies have shown that cost related to directly replacing an employee can be as high as 50–60% of the employee's annual salary, but the total cost of turnover can reach as high as 90–200% of the employee's annual salary. These costs include candidate views, new hire training, the recruiter's salary, separation processing, job errors, lost sales, reduced morale and a number of other costs to the organization. Turnover also affects organizational performance. High-turnover industries such as retailing, food services, call centres, elder-care nurses, and salespeople make up almost a quarter of the United States population. Replacing workers in these industries is less expensive than in other, more stable, employment fields but costs can still reach over $500 per employee. An alternative motivation theory to Maslow's hierarchy of needs is the motivator-hygiene (Herzberg's) theory. The theories have overlap, but the fundamental nature of each model differs. While Maslow's hierarchy implies the addition or removal of the same need stimuli will enhance or detract from the employee's satisfaction, Herzberg's findings indicate that factors garnering job satisfaction are separate from factors leading to poor job satisfaction and employee turnover.Herzberg's system of needs is segmented into motivators and hygiene factors. Like Maslow's hierarchy, motivators are often unexpected bonuses that foster the desire to excel. Hygiene factors include expected conditions that if missing will create dissatisfaction. Examples of hygiene factors include bathrooms, lighting, and the appropriate tools for a given job.Employers must utilize positive reinforcement methods while maintaining expected hygiene factors to maximize employee satisfaction and retention. It is important to first pinpoint the root cause of the retention issue before implementing a program to address it. Once identified, a program can be tailored to meet the unique needs of the organization. A variety of programs exist to help increase employee retention. Career Development – It is important for employees to understand their career path within an organization to motivate them to remain in the organization to achieve their personal career goals. Through surveys, discussion and classroom instruction, employees can better understand their goals for personal development. With these developmental goals in mind, organizations can – and should – offer tailored career development opportunities to their employees. Executive Coaching – Executive coaching can be used to build competencies in leaders within an organization. Coaching can be useful in times of organizational change, to increase a leader's effectiveness or to encourage managers to implement coaching techniques with peers and direct reports. The coaching process begins with an assessment of the individual's strengths and opportunities for improvement. The issues are then prioritized and interventions are delivered to target key weaknesses.