In the present
scenario, world is turning into a global village and the whole
globe is reachable from any destination. In this small world even
companies are reachable to the people and vice versa. And so their
jobs are also easily accessible for everyone. In this situation,
the biggest challenge for a company is to retain its workforce intact
especially the Knowledge Banks.
All the companies are planning to
increase their turnover every moment of time. While in all this
workout of increasing the turnover they forget about their loss
incurred by the resignation of employees and the expenses of hiring
new employees (Hiring Cost, Training Cost, Productivity Loss etc.).
This hiring of a new employee normally costs around 35% or more
of the average employee salary. For example- let us consider average
salary of an employee per year as Rs.20, 000, and then the cost
of hiring a new employee and other expenses come around Rs.7, 000.
If you have 2 employees resigning per month the cost comes to Rs.14,
000 and taking the same for 12 months comes to around Rs.168, 000,
which is a direct loss from the turnover of the company. And after
all this there is always a risk of getting a right employee for
the right position with a right attitude.
an employee resigns, then good amount of time is lost
in hiring a new employee and then training him/her and
this goes to the loss of the company directly which many a
times goes unnoticed. And even after this you cannot assure
us of the same efficiency from the new employee (He might
be better and might not be). You require time to judge his
capabilities and work nature. The loss is even graver if he/she
is Your Knowledge Bank, this can bring your process to a stand
still even. And above all these things, one resignation many
a times triggers a chain reaction among other employees, leading
to a negative effect.
For all these
and many other reasons you need to retain your employees. For
retaining your employees, you need to understand the requirements
of the employees and at the same time should make them clear about
the expectations of the company from them. Itís a general human
tendency that each human being thinks himself as important and expects
the same from the other side, so the company management should make
their employees accountable for their respective jobs and make them
feel that they are very important for the smooth processing of that
process(At the same time create a backup for him). Care and importance
are two things of which every human being is mad of.
Below are few
of the tools for Employee Retention:-
You can make a provision
of Monthly or Quarterly Award (depending upon the budget)
for the best employee, Awarding 2 or 3 best workers each month.
The award can be in terms of gifts or money.
If it is money
then it should be divided into two parts, first part to be
given with the next month salary and the remaining after 6
months. In this way he/she can be retained for 6 more months.
These rewards shall be considered at the time of appraisal.
Career Development Program-
Every individual is worried about his/her career. You can provide
them conditional assistance for certain courses which are beneficial
from your business point of view. Conditional assistance means the
company will bear the expenses only if he/she gets an aggregate
of certain percentage of marks. And entrance to that course should
be on the basis of a Test and the number of seats to be limited.
For getting admitted to such program, You can propose them to sign
a bond with the company, like they cannot leave the company for
2 years or something after the successful completion of the course.
Performance based Bonus-
The employee always comes
to know about the profit of the company which is of course based
on the strategic planning of the top management and the productivity
of the employee. To get more work out of the employee, You can make
a provision of Bonus. By this employee will be able to relate himself
with the companyís profit and hence will work hard. This bonus should
be productivity based. You can make sure that this bonus is not
adding extra-pressure on the budget of Your Company and you can
arrange this by cutting a part of the salary hikes and presenting
it to the employees in the form of bonus.
Referral Plan- You
can introduce Employee Referral Plan. This will reduce your cost
(charges of external consultants and searching agencies) of hiring
a new employee and up to an extent you can rely on this new resource.
On every successful referral, employee can be given a referral bonus
after 6 or 9 months of continuous working of the new employee as
well as the existing employee. By this you can get a new employee
at a reduced cost as well as are retaining the existing one for
a longer period of time.
You can introduce a Loyalty Bonus Program in which you can reward
your employee after a successful completion of a specified period
of time. This can be in the form of Money or Position. This will
encourage the fellow employees as well whether they are interested
in money or position, they will feel fascinated.
a voice to the Knowledge Banks-
First of all you should try to retain your workforce intact, as
they are the intellectual asset of the company. And above that you
canít afford losing your knowledge banks. These are the people who
stabilize the process. You can involve them in some of the decisions.
You should also let your employees enjoy in a light mood. You
can take your employees to a trip or for an outing every year or
bi-yearly. You can make use of this trip as well. You can start
this trip with an opening note about the management views and plans,
strategies etc. At the same time you can involve your top management
into some of the fun activities as this will make feel the employees
that they are very close to the management and everybody is same.
Gifts at some Occasions-
You can give some gifts at the time of one or two festivals to the
employees making them feel good and understand that the management
is concerned about them.
You should make each employee accountable so that he can also feel
that he is as important as his manager. If he/she will be filled
with this sense, he/she will seldom think of leaving the company.
the managers effective and easily accessible-
You should make the management easily accessible so that the employee
expectations can be clearly communicated to the top management,
as it is impossible for the top management to reach each employee
You should conduct regular surveys for feedbacks from employee about
their superiors as well as other issues like food, development plans
and other suggestions. This will make them feel of their importance
and the caring nature of the company. Some of the suggestions might
be of real good use for the company.
For a company, the workforce is like an intellectual property,
both in terms of skills and money. A trained and content workforce
can lead a company to new heights while a opposite one can hamper
it badly. So, every resignation saved is every dollar earned.
Contributing Writer: Rohit
Minton is working as Assistant HR in the Group HR department
of the Amicorp group. He has done his bachelors in Spanish Language
and is now pursuing his MBA in HRD.
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