Employee retention can be defined as the overarching goal of retaining productive and talented employees while reducing turnover by fostering a positive work environment with a focus on retention strategies such as employee recognition and appreciation, flexible work arrangements, and competitive compensation and benefits through the implementation of policies and practices within the organization that resolve diverse employee needs (Mckeown, 2010). Moreover, the term "employee retention" is used to describe an organization's efforts to keep its best workers and reduce the likelihood of turnover risk (Das, 2013). According to David G. Allen (2021), numerous organizations and HR departments struggle with the labor force management challenge of employee turnover and retention, which has a detrimental influence on both the bottom line and the ability to expand and grow in a certain industry, as well as incurring excessive costs for business operations. Consequently, employers are well concerned with employee retention in the current fiercely competitive labor market and also in situations of low unemployment, so that businesses can increasingly rely on human resources technology for employee retention purposes, including recruitment, onboarding, engagement, and recognition, as well as the provision of more flexible working conditions and cutting-edge benefits such as monetary and physical wellness programs (Greer, R Charles, 2008). Multiple studies have discovered that corporate culture, communication, remuneration and benefits, strategy, flexible working agendas, and career progression systems all directly contribute to employee retention and should be managed in combination (Logan, 2000). In addition, Ramona Agrela et al. (2008) described that organizations can only expand and prosper if they pay attention to the elements that influence employee retention. Job flexibility, cost-effective job flexibility alternatives to reward and satisfy the requirements of all employees, quality employee training, career development, and skill recognition for personal accomplishments on the job, learning and development opportunities accompanied by supportive learning and working climate, employee motivation, financial and non-financial benefits, maintaining of favorable relationships and support with senior management and subordinates, compensations, and organizational commitment of the employees can be illustrated as retention factors that contribute to employee retention and turnover (Sinha and Sinha, 2012).
Also, recent studies illustrate that retention approaches that properly meet the requirements of all employees improve a company's capacity to efficiently adjust to continuing organizational dynamics (Lydia Oonge Mokaya, 2014).
Similarly, building a loyal and dedicated workforce requires effective retention practices, which can reduce the time and money spent on advertising job openings, conducting interviews, onboarding new employees, and providing necessary training, as well as the costs associated with diminished business productivity or unsatisfactory customer service (Vasantham, 2016).
According to the research study conducted by Cloutier et al. (2015), the process of employee retention will benefit an organization in the following ways:
1. A higher commitment toward the organization's vision, mission, objectives, and core values
2. Increased process efficiency and goal achievement through the retention of long-term employees.
3. Higher productivity
4. High employee morale as a result of a sense of belonging within the organization.
5. Reduction in staff turnover, resulting in decreased recruitment expenses.
6. Enhancing the positive customer experience
7. Increased revenue in the organization
Employee retention can be measured using both quantitative and qualitative HR data, with the retention percentage calculated by dividing the number of employees who stayed for the entire time period by the number of employees at the start of that time period and multiplying the result by 100 (David G. Allen, 2021). The author also explained that it is useful to measure retention rate on a manager-by-manager basis to better understand and guide your efforts to reduce staff turnover across the company.
On the other hand, low retention rates could be an indicator that organizational leaders are having difficulty developing strong relationships with their employees, which in turn will lead to higher turnover rates (Al-Suraihi et al., 2021). According to the latest research, the top reasons employees quit their jobs due to frustration with their colleagues and superiors are dissatisfaction with their current positions, a lack of appreciation, a lack of trust and support from superiors and coworkers, stress from excessive workload, a mismatch between their skills and the requirements of the job, the unavailability of growth opportunities, as well as the availability of new job opportunities (Gorde, 2019). The voluntary and involuntary employee turnover rates can be calculated by dividing the number of people who leave during a given period by the average number of total employees and multiplying by 100 (Human Resources Industry Whitepaper, 2012). Moreover, Six Sigma can be used to enhance administrative processes like human resources processes in order to lower the turnover rate and thereby mitigate the negative effects of employee turnover (Laureani and Antony, 2010).
However, according to Mandhanya (2015), businesses can take measures to keep their best employees and cut down on turnover by making retention a central part of their corporate culture. Furthermore, when retention strategies take employees' goals and needs into account, employees of all ages are more likely to be satisfied in their jobs, loyal to their employers, and committed to their work (Boomer Authority, 2009).
This blog article will demonstrate how effective employee retention can be accomplished through five key strategies: employee motivation as a strategic approach to retention, employee engagement as a strategic approach to retention, learning, and development as a strategic approach to retention, recognition, and reward as a strategic approach to retention, job satisfaction and work-life balance as a strategic approach to retention, and job satisfaction and work-life balance as a strategic approach to retention.
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analyzing and managing employee turnover, SHRM Foundation. SHRM Foundation.
Available at: https://www.shrm.org/hr-today/trends-and-forecasting/special-reports-and-expert-views/documents/retaining-talent.pdf
Gorde, S.U. (2019) ‘A study of employee retention’,
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Available at: https://www.researchgate.net/publication/339253142_A_Study_of_Employee_Retention
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Management, A general Managerial Approach, Pearson, 34-37.
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Hi Nirosha, agree on your content and further, Wayne (2014) explains that there is a significant influence between employer branding, management performance, and employee retention. This finding is supported by research conducted by Sutherland (2002) that employer branding has a direct influence on employee retention. Even in research conducted by Chhabra and Sharma (2014), employer branding is one of the corporate strategies in modern times that is used to reduce costs from company employee search. Oladapo (2014) explains that talent management has a positive and significant influence on employee retention. This is supported by research conducted by Deery (2008), which states that talent management and work-life balance have a strong enough influence on employee retention.
ReplyDeleteThanks Derrick for your valuable input. According to research, the majority of employees quit their jobs due to irritation and ongoing conflict with their managers or coworkers. Sometimes a low wage, a lack of career advancement opportunities, and a lack of desire force a worker to look for a change. The management must make every effort to keep those workers who are well-known for being good contributors and who are actually crucial to the business (Gorde,2019)
DeleteHi Nirosha, Although crucial for long-term competitive advantage, organizational performance, and longevity, employee retention is challenging in a market that is highly competitive. Low employee retention leads to a number of problems, including higher training and recruitment costs, underqualified workers, and disruptions to organizational operations. These factors have led small and medium-sized businesses (SMEs) to perceive staff retention as being extremely complex and uncertain. (Xuecheng, et al., 2022)
ReplyDeleteI agree with you Hassan. And also according to Gorde (2019) once individuals are fully trained, they leave their jobs, leaving the firm at a loss.
DeleteThe numerous efforts required to ensure that a person stays with a company for the longest possible time are considered in the employee retention process.
Agreed on the content Nirosha. Further, Companies with lax human resource practices have a very high chance of keeping employees over the long term by giving them an acceptable degree of privacy and effective workplace management (Wells & Thelen, 2002). Investments made in employees' professional and training development are one of the most crucial variables in employee retention (Messmer, 2000). Immediate manager supervision increases employees' levels of job satisfaction in the organization and decrease employee turnover (Brunetto & Farr-Wharton, 2002).
ReplyDeleteThanks Romeda for your valuable input. I agreed to your points.
DeleteIn this competitive world, HR department struggles a lot for the manpower management. Retention of employees is one among that. As mentioned in the blog, it is nothing but the efforts made by the company not to loose their well experienced employees through various strategies like training, recognition, rewards, good working atmosphere. A company should always give more importance to the present asset (employees) than the upcoming short run profits.
ReplyDeleteThanks Uday for your valuable input .Further Becker (1962) suggests that investing in human capital is the key to boosting employee profitability and productivity as well as employee well-being since these factors will promote good performance inside the firm. As a result, it may be beneficial for both businesses and employees. In in addition to the significant cost of staff turnover, organizations are convinced that efforts should be made to retain, advance, and develop the workforce.
DeleteVery good article Nirosha. I would like to bring in some other definition made on Employee Retention. According to Singh and Dixit (2011), employee retention refers to the different strategies and practices, which let the workers adhere to an institution for a longer period. The scholarly debate on the employee retention stemmed from 1900s when scholars and psychologists began to identify various reasons that affected employee’s level of interest in their job and possible opportunities (Rowland & Ferris, 1982).
ReplyDeleteThanks for the feedback Vidura. And also Employee Retention is defined as an organization’s ability to retain its employees. It can also be called as a process, in which the resources are motivated and encouraged to stay in an organization for a longer period of time for the sustainability of the organization (Gorde, 2019)
DeleteAgreed on the content Nirosha, according to Osteraker (1999) [20], the employee satisfaction and retention are the key factors for the success of an organization. The Retention factor can be divided into three broad dimensions, i.e., social, mental and physical. The mental dimension of retention consist of work characteristics, employees always prefer flexible work tasks where they can use their knowledge and see the results of their efforts which, in turn, helps in retaining the valuable resources. The social dimension consists of the contacts that the employees have with other people, both internal and external. The physical dimension consists of working conditions and pay.
ReplyDeleteThanks for your input Mushadiq, I agree with your comment. Additionally, it is crucial to keep employees on board in order to lower turnover costs and the expense of hiring and training new employees. However, keeping staff is more crucial in order to prevent talented workers from being poached. Numerous variables highlight the significance of staff retention. Mayo, Elton (2003).
DeleteStairs and Galpin (2010) claimed that employee retention can be done by engaging employees in conversations about their careers before they look elsewhere, also offer them career coaching regardless of the grade.
ReplyDeleteYes Zameera,
DeleteOne of the best indicators for forecasting employee turnover is employee engagement. Employee engagement is best understood as a reflection of the quality of each person's work life, and employee retention initiatives involve improving the overall workplace experience to retain talent for longer, so a company's retention strategy has a direct and measurable impact on overall engagement. (Radley, 2022)
Agreed on the content Nirosha, Employee retention is regarded as the foundation of company success. It is defined as "a procedure in which personnel is encouraged to stay with the business for the longest possible period of time or until the objectives are met" (Singh & Dixit, 2011, p. 442). Within enterprises, the primary goal of staff retention methods and procedures is twofold. The first is to reduce employee turnover, and the second is to significantly reduce the associated costs of hiring, training, and orientation of new employees (Iqbal & Hashmi, 2015).
ReplyDeleteThanks for your input Christeen. According to Dawley, Houghton, and Bucklew (2010), an employee's desire to leave a firm is determined by how they feel about their fit therein. Person-organization fit influences an employee's decision to remain at a job as much as it influences retention.
DeleteAgreed with your content Nirosha, Furthermore High employee turnover increases cost in resources, recruiting, and time when replacing open positions. Expense to the organization for recruiting a new employee costs half to 200% of the former employee’s salary (Hebenstreit, 2008). The increased cost related to recruitment includes advertising and overlapping of salary; making it difficult to maintain positive employee culture and morale. High employee turnover also leads to missed opportunities for meeting production matrices and budgets set within the departments, adding additional cost to the organization.
ReplyDeleteThank you for your comments Shermila, Additionally, it's not sufficient for employee retention to only lower turnover costs or a company's recruitment and training expenses. However, keeping staff is more crucial in order to prevent talented workers from being poached. Numerous variables highlight the significance of staff retention. Mayo, Elton (2003).
DeleteGood article Nirosha, Further Denton (2000) [3] has clearly stated that employees who are happy and satisfied with their jobs are more dedicated towards their work and always put their effort to improve their organizational customer’s satisfaction. Stauss et al., (2001)[4] has defined retention as “customer liking, identification, commitment, trust, readiness to recommend, and repurchase intentions, with the first four being emotional-cognitive retention constructs, and the last two being behavioral intentions”
ReplyDeleteHi Rayan, Thank you for the comment on my Log. Moreover, job satisfaction is a goal of employment and a crucial component of employee retention, and it is only achieved by providing the employee with a physically and psychologically appropriate work environment. The market economy's inflationary trends are making the job market more competitive. As the talent pool becomes increasingly tapped up, it is becoming more difficult to keep staff on board. A competent employer should be able to draw in and keep employees (Qadria Alkandari, 2009).
DeleteAgree on the facts that you have brought through the Article Nirosha. Also as described by Ma, Q. K., Mayfield, M., & Mayfield, J. (2018) increase number of connections/links the new recruiter have with internally and externally will help the staff retention by having an opportunity to build strong connections immediately.
ReplyDeleteFully Agree with you Dileka, further the inadequate supervision causes staff dissatisfaction, which opens the door for turnover. According to their contribution, supervision controls work procedures, serves as a functional champion for key connections among the workforce, maximizes job satisfaction, and lowers turnover rates. (Scandura &Williams, 2004)
DeleteA great article Nirosha, I agreed the content and to add furthermore, according to Abbdullah (2021). Employee turnover is a serious problem for many organizations around the world. Indeed, the study of employee turnover intentions has long been a major concern in an organization's management. Turnover is a huge problem for organizations in today's intense global competition. Recently, found that the phenomenon of turnover is a permanent problem for organizations. That would negatively affect the performance and profitability of the organization. On the other hand, employee turnover increases the chances of losing good employees. Therefore, retaining valuable skilled employees is very important to employers, as they are considered essential to the performance and success of an organization. Besides, employee turnover has always been an important issue for managing an organization
ReplyDeleteThanks for the valuable feedback Sanath. Further more, according to Denton (2000) employees who are content with their occupations, are more committed to their work and always make efforts to increase organizational customers' happiness.
DeleteAgreed on the content above. Moreover, on the word of Bidisha Lahkar Das (2013), any organization's capacity to retain its key staff is essential to its long-term profitability and viability. The capacity to retain the best people in any firm has a significant impact on achieving organizational goals. Employee retention refers to the process of encouraging them to stick around the organization for as long as possible or until the project is finished (Bidisha Lahkar Das, 2013).
ReplyDeleteYes Nishadi. I agreed with your points further While lower paying job roles experience an overall higher average of employee turnover, they tend to cost companies less per replacement employee than do higher paying job roles. However, they incur the cost more often. For these reasons, most companies focus on employee retention strategies regardless of pay levels (Beam, 2009).
DeleteTotally agree with your article Nirosha, Maertz & Campion (1998) stated that relatively less turnover research has focused specifically on how an employee decides to remain with an organization and what determines this attachment retention processes should be studied along with quitting processes. Zineldin, (2000) has viewed retention as an obligation to continue to do business or exchange with a particular company on an ongoing basis.
ReplyDeleteThanks for your input Chathuri , According to Hytter (2007), some work - related factors, such as rewards, leadership style, career opportunities, the training and development of skills, physical working conditions, and the harmony between professional and personal life, have an indirect impact on employee retention. Personal premises of loyalty, trust, commitment, and identification and attachment with the organization, on the other hand, have a direct impact.
DeleteAgreed with the content. In this era of a hyperactive environment, the formulation and implementation of traditional human resource management (HRM) strategies and practices are not enough to retain a talented workforce. With the inclusion of more and more Generation X and Y employees in the workforce, utilization of these traditional retention strategies is becoming less effective to meet the requirements of these generations (Kashyap & Rangnekar, 2014).
ReplyDeleteYes Sachini. I totally agreed with your point. Moreover According to Luscombe, Lewis, and Biggs (2012), there was a difference in the expectations of each individual in the workplace. However, the essential elements of retaining the millennial generations are fair treatment from employers, and flexible working conditions. This generation also depends on social media for communication. Naim (2014) suggests that the capacity of social media to share user-generated content and openness can be leveraged to engage and retain millennials. Social media tools such as blogs, discussion forums, blogs, LinkedIn, Twitter etc. play a significant role in retention.
DeleteGood Topic Nirosha. Tenney (2021) states that employee retention affects an organization’s performance, productivity, culture, profitability, and customer satisfaction in positive and negative ways. While the high costs of turnover make retention essential for an organization’s future success, retaining the wrong employees can hinder success.
ReplyDeleteThis comment has been removed by the author.
DeleteHi Manula,Thank you and great to see your feedback.
DeleteThe ultimate aim of Employee Retention is to make both the stakeholders, i.e., employees and employer happier. It facilitates loyal employees sticking to the company for a longer duration, which in turn will benefit both the stakeholders and employees.
Good introduction to a critical subject Nirosha. Sandhya & Kumar (2011) states that providing support to the employees is a mantra for retraining a talented workforce and that companies can support their employees by creating an environment of trust and inculcating the organizational values into them. They further state that the company can also support employees directly by providing support during personal crises, helping manage stress and personal development and indirectly by managing employee turnover, engaging new recruits, optimizing employee engagement, and coaching & mentoring.
ReplyDeleteThanks Nelushan for your valuable input. I agreed to your points.
DeleteI agree with you. Fitz-enz (1990) identified that employee retention is not influenced by one factor, but by a host of factors that are responsible for retaining employees in a company. Organizations need to pay attention to the areas such as job security, compensation, supervisor support culture & rewards, training & developments, work environment, and organization justice, etc. as for Osteraker (1999) [20], employee satisfaction and retention are the umbrella terms for the success of an organization. Further, organizations with a lack of human resource practices have a very high chance of keeping employees over the long term by providing them an acceptable degree of privacy and friendly workplace management (Wells & Thelen, 2002). Investments made in employees' professional and training development are one of the key determiners of employee retention (Messmer, 2000). Standardized manager supervision increases employees' levels of job satisfaction in the organization and decreases employee turnover (Brunetto & Farr-Wharton, 2002).
ReplyDeleteFully agree with you Thilini. Adding to that according to
DeleteHytter (2007), some work - related factors, such as rewards, leadership style, career opportunities, the training and development of skills, physical working conditions, and the balance between professional and personal life, have an indirect impact on employee retention. Personal premises of loyalty, trust, commitment, and identification and attachment with the organization, on the other hand, have a direct impact on employee retention.
Dear Nirosha , I fully agree with your content and further, an organization can achieve business excellence by holding the employees during the strategic objective implementation process.
ReplyDeleteSimply Business excellence is a team effort. The top management can set the strategies but obviously, without the middle management and the operational level managers and executives along with the ground level key players, this won’t be a possible task.
Understanding sources of sustained competitive advantage has become a major area of study in strategic management (Porter, 1985, 1991; Barney, 1991; Peteraf, 1993; Ma, 1999a, 1999b, 2004; Flint & Van Fleet, 2005; King, 2007).
In an organization, all employees collectively march towards the vision or the strategic goal of an organization, lesser employee turnover or high retention definitely will lead to a competitive advantage over the competitors in the industry
According to the study by Ghani et al.(2002), the same factors affecting employee satisfaction will affect employee retention as well.
Thanks Dulakshi for your valuable input. I agreed to your points.
Delete
ReplyDeleteGrate article Nirosha, Zdrilić & Dulčić (2016) states that for business excellence it is also important that a company applies Total Quality Management for which effective and efficient employee performance will positively influence organizational performance(Chan & Lynn ,1991)
Thank you Liyanjalie and also Business excellence is much more than having a quality system in place. It is about achieving excellence in everything including leadership, strategy, customer focus, information management, people and processes and most importantly achieving superior business results.
ReplyDelete(Ionica, 2010)
Great article Nirosha , business excellence also could me a measuring tool for employers to judge if an individual is weak or strong in their job performance. According to Kerr & Slocum (1987) Weaker performers leave an organisation when they feel insecure however stronger performers stay more longer to exploit the organization until they get a better offer from a similar job.
ReplyDeleteGood Content Nirosha.Furthermore,Employee engagement, employee commitments and employee retention are critical organizational requirements in this global era. These terminologies play a very crucial role in the effective functioning and sustainability of the organization. There are various studies showing the relationship between organizational performance and employees' engagement, for example, Simpson (2009) and Andrew and Sofian (2012). Studies in western developed countries show that there is a direct relationship between employee engagement, employee commitment and employee retention. (Richardsen et al., 2006; Llorens et al., 2006; Hakanen et al., 2006; Saks, 2006; Demerouti et al., 2001; Maslach et al., 2001; Brown and Leigh, 1996). This study is an effort to study the impact of employee engagement and organizational commitment on exit decision of the employee. (Shiney .C,2019)
ReplyDelete