01.Employee Retention

 Introduction

Employee Retention is defined as an organization’s ability to retain its employees. It may also be referred to as a way of motivating and encouraging resources to remain with an organization for longer periods so that it is able to maintain its sustainability.

The ultimate objective of employee retention is to make stakeholders, employees, and employers, happier. It allows loyal employees to remain with the company for a longer period of time, which in turn benefits both stakeholders.

Employee retention is not just a matter that can be dealt with records and reports. The issue is only determined by the employers' understanding of employees' different concerns and their assistance in resolving them, if they need it. Every organization is spending time and money to train new employees and make them ready to work for the company. If such employees leave after completing their training, the organisation will suffer a complete loss.

The majority of workers quit organizations because they're frustrated and difficult to work with their superiors or other team members. At some point, the employees are forced to look for change because of low salaries, lack of growth prospects and motivation. To retain the staff that really matter for this system and are known to be an effective contributor, management needs to try its best.

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Why Employee Retention Is Important?

An organization can save time and money by retaining employees. In addition to reducing the turnover rate, it helps businesses retain qualified and experienced staff.

A company has both direct and indirect costs associated with the employee's departure and the subsequent hiring process when an employee leaves and needs to be replaced.

Direct costs of employee turnover include:

o Expenses for advertising for the open position.

o PTO that has to be paid when an employee leaves.

o Cost of temporary substitutes, or cost of paying overtime to the existing employees

Indirect turnover costs include:

o Loss of employee expertise and experience

o Time spent on hiring, onboarding, and training new recruits

o Lag in production due to o disruption in work

Benefits of Employee Retention 

Employer retention offers businesses a number of advantages, including,

Cost reduction: Employee turnover costs a corporation hundreds of thousands of rupees in additional expenses. Despite the fact that it might be challenging to accurately estimate the cost of turnover (which includes hiring expenses, training costs, and productivity loss)

Increased productivity: Employee turnover reduces productivity because it takes time for a new employee to catch up and perform at a level that is equivalent to that of their predecessor. It has an impact on the remaining employees as well because they are forced to take on more work and may end up producing work of lesser quality as a result. On the other hand, organizations with high retention rates frequently have more engaged employees who are, in turn, more productive.

Improved employee morale: Greater connection and engagement are fostered by businesses with effective employee retention initiatives, which raise morale and increase retention. On the other hand, a regular stream of departures depresses workplace morale, with side effects that include a drop in job quality and an increase in employees leaving.

Improved employee satisfaction and experience: Employee satisfaction, which measures how content and happy employees are in their jobs, and employee engagement, which measures how devoted employees are to their work, all have a positive link with retention. Employee retention rates are sometimes higher in firms with high retention rates because happy and engaged workers are frequently more likely to stay with the company.

Better customer experience: Inexperienced and less skilled new workers may be more likely to make mistakes that have a negative effect on a customer's interaction with the business. Long-term employees that are happy with their jobs are frequently better at handling customers and may develop close bonds with them. This holds true not only during the entire contract-writing process but also after a transaction, when a client might contact customer support. Additionally, a crucial brand difference can be a superior customer experience.

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Three R’s of Retention

Respect: is the treatment of individuals with honor, extra care, or attention. The pyramid clearly demonstrates that respect is the cornerstone of employee retention. If you don't appreciate employees, recognition and awards won't have much of an impact.

Recognition: is characterized as "special notice or attention" and "the act of perceiving clearly." Because management ignores employees' demands and reactions, retention and morale issues frequently arise.

Reward: are the additional benefits you provide in addition to the fundamentals of respect and recognition that motivate people to work hard, to care, and to go above and beyond the call of duty. Even while rewards only make up a minor part of the retention equation, they are nevertheless crucial.

Agarwal  (1998) explained the meaning of the term reward by stating that it is something the company offers to its employees in response to their work and performance, and that it is also something that the employees want.

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Conclusion 

employee retention stands as a critical pillar for organizational success and sustainability. It encompasses more than just numerical data; it's about understanding and addressing the concerns of employees, fostering a work environment that encourages commitment, and valuing their contributions. The importance of employee retention is multifaceted, encompassing financial savings, increased productivity, improved morale, enhanced customer experience, and the overall well-being of stakeholders. By respecting, recognizing, and rewarding employees, organizations can create a cycle of mutual benefit that not only retains valuable team members but also nurtures their growth and loyalty. The commitment to employee retention serves as a strategic investment in the foundation of a thriving and prosperous organization.

References

(No date a) Study of employee retention - researchgate. Available at: https://www.researchgate.net/profile/Sangita-Gorde/publication/339253142_A_Study_of_Employee_Retention/links/5e464199299bf1cdb9285dbb/A-Study-of-Employee-Retention.pdf?origin=publication_detail (Accessed: 12 August 2023).

Loop, T. (2022) Top 10 benefits of employee retention - handy guide [2023], RSS. Available at: https://www.loophealth.com/post/benefits-of-employee-retention (Accessed: 22August 2023).

NetSuite.com (no date) How to keep top talent, Oracle NetSuite. Available at: https://www.netsuite.com/portal/resource/articles/human-resources/employee-retention.shtml (Accessed: 20 August 2023).

Larralde, A. (2023) 7 benefits of employee Retention + 4 Retention Strategies, Betterworks. Available at: https://www.betterworks.com/magazine/benefits-of-employee-retention/ (Accessed: 20 August 2023).

Researchgate.net. Available at: https://www.researchgate.net/publication/339253142_A_Study_of_Employee_Retention#:~:text=Employee%20Retention%20is%20a%20challenging,take%20care%20of%20employee%20satisfaction. (Accessed: August 20, 2023).