of Employee Retention
Employee Retention Program is a systematic effort to
create and foster an environment that encourages employees
to remain employed by having policies and practices in
place that address their diverse needs.
A company's employees
have always been a key asset but today, more and more companies
are realizing that their people are by far their most important
asset because in a world where technologies, processes, and products
are quickly duplicated by competitors, and the pace of change and
level of competition are constantly increasing, people are the key
to the most reliable sources of advantage—better service, increased
responsiveness, stronger customer relationships, and the creativity
and innovation that keep a company one step ahead.
EMPLOYEE RETENTION IS IMPORTANT
The process of
retention will benefit an organization in the following ways: Benefits
of employee retention for companies
1. The Cost of Turnover: The
cost of employee turnover adds hundreds of thousands of money to
a company's expenses. While it is difficult to fully calculate the
cost of turnover (including hiring costs, training costs and productivity
loss), industry experts often quote 25% of the average employee
salary as a conservative estimate.
2. Loss of Company Knowledge:
When an employee leaves, he takes with him valuable knowledge about
the company, customers, current projects and past history (sometimes
to competitors). Often much time and money has been spent on the
employee in expectation of a future return. When the employee leaves,
the investment is not realized.
3. Interruption of Customer Service:
Customers and clients do business with a company in part because
of the people. Relationships are developed that encourage continued
sponsorship of the business. When an employee leaves, the relationships
that employee built for the company are severed, which could lead
to potential customer loss.
4. Turnover leads to more
turnovers: When an employee terminates, the effect is
felt throughout the organization. Co-workers are often required
to pick up the slack. The unspoken negativity often intensifies
for the remaining staff.
5. Goodwill of the company:
The goodwill of a company is maintained when the attrition
rates are low. Higher retention rates motivate potential employees
to join the organization.
6. Regaining efficiency:
If 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
Writer: MONIKA SAH, MBA Student [email protected]
to Increase Employee Retention - Strategies