Employee Retention: Meaning, Objectives and Strategies

What is Employee Retention?

Employee Retention is defined as the ability of an organisation to keep its employees with itself and reduce turnover. This involves creating an environment and implementing strategies that encourage employees to stay with the company for a longer duration. This is achieved by creating a positive work culture, providing development opportunities, and competitive advantages, and recognising and rewarding employees for their contributions. High employee retention is a sign of a healthy workplace where employees are engaged, satisfied, and committed to the organisation’s goals.

What is Employee Turnover?

Employee turnover is the tendency of an employee to leave an organisation, employee turnover is the opposite of employee retention. Some of the reasons for employee turnover are,

1. Poor Work-Life Balance: Poor work-life balance means that working hours are too long, causing the employee to devote too much time to work and have too few holidays. Due to this, personal life gets disturbed, and the employee leaves the organisation and goes to an organisation where work-life balance is ensured.

2. Personal Reasons: Sometimes, an employee’s decision to leave a job is due to personal reasons, such as their family relocating to a new city. Since the entire family is shifting, this forces the employee to leave the job.

3. Incompatibility with the Job: Dissatisfaction arises from the inconsistency between an employee’s skills, knowledge, and experience with the demands of the job, that the employee is not given relevant work, this inconsistency causes people to leave the job and join a company that promotes employee development.

4. Lack of Growth: Lack of growth means that the structure of the company is such that the employees they hire remain in the same position for a long time, do not get promotions, and have no growth within the organisation.

5. Poor Employee-Employer Relationship: A major cause of employee turnover, poor relationships, whether within management or between management and employees, contribute significantly to turnover. When employees feel undervalued and their feedback is not acknowledged, they seek a more supportive work environment.

Objectives of Employee Retention

Employee Retention is very important for the organisation, as the organisation hires skilled and talented people. It is a difficult task to pull off as the recruitment process takes a lot of time and also involves costs. But it is not favourable for the organisation if those employees leave the organisation, so here are the benefits of employee retention:

1. Reducing Recruitment and Training Costs: Retaining employees reduces expenses paid in the exhaustive recruitment process.

2. Minimising Production Cost and Wastage: A stable workforce ensures smoother operations, reducing production costs, and minimising wastage due to workforce disturbances.

3. Maximising Productivity and Work Quality: Engaged and satisfied employees tend to be more productive and maintain higher work standards, positively impacting the organisation’s output.

4. Increasing Revenue and ROI: Retained employees contribute to the company’s growth and success, ultimately reflecting increased revenue and Return on Investment (ROI).

Employee Retention Strategies

Here are 10 employee retention strategies that organisations can implement to reduce turnover and keep their employees engaged and motivated:

1. Hiring the Right People: With 80 percent of employee turnover occurring due to poor hiring decisions, hiring the right people can substantially reduce employee turnover and help with employee retention. It is like laying a strong foundation, bringing the right individuals on board sets the stage for a flexible and connected team.

2. Attractive Incentives and Rewards: Providing performance-based bonuses and rewards beyond financial incentives can be impactful. This can be a great way to recognise employees who are consistently exceeding expectations. Offer non-monetary rewards like gift cards, company swag, or vacations. These types of rewards can be just as motivating as financial incentives.

3. Redressal of Employee Grievances: To ensure that employee concerns are addressed appropriately and promptly, the organisation should have a grievance redressal process. It established a transparent and effective mechanism to boost employee confidence and prevent turnover.

4. Participation in Decision-Making: Participation in decision-making creates a sense of belonging among the workers. When they are part of the decision-making process, employees feel heard, recognised and integral to the organisation’s growth. It makes them feel valued and recognised.

5. Good Employee-Employer Relationship: Encourage open communication and feedback loops by creating a safe and supportive environment where employees feel comfortable sharing their ideas and concerns openly and are receptive to their feedback.

6. Better Service Structure: Employees want the opportunity to advance their careers at their current company. Companies can Provide clear career paths and advancement opportunities, ensuring employees see a future within the organisation. Empower employees to excel in new roles by offering training and development programs within a better service structure.

7. Better Working Conditions: Promote work-life balance by offering flexible scheduling options, remote work options, regular breaks, holidays, personal time, and paid time off. Offer competitive benefits like health insurance, stock options, vision insurance, and retirement savings plans. Seek employee feedback, provide recognition and rewards for good work, and create a positive and supportive work environment.

8. Conducting Exit Interviews: It is very important to conduct an exit interview just before an employee leaves, an exit interview asks the employee about their experience with the company. This process can help shed light on things like toxic management and departmental conflict.

9. Conduct Health and Wellness Programs: It is important to have a comprehensive health plan, and health insurance initiative is essential for the overall well-being of the employees. It is not just about providing benefits, it is about showing care and contributing to a healthier and more engaged workforce.

10. Providing Leadership Opportunities: Many people feel they can contribute more, and giving them the right work opportunities and responsibilities can increase employee satisfaction and help retain employees. It is about enabling them to make meaningful contributions and promoting job satisfaction and loyalty.

By implementing these employee retention strategies, companies can reduce turnover, increase employee engagement, and increase their overall success. These practices are not just about retaining talent, they are about creating a workplace where people thrive, encouraging positivity, productivity, and a sense of belonging.