Employee Retention Strategies - Assignment Example

Name of the Author] [Name of the Instructor] [Date] Employee Retention Strategies Bureau of Labor Statistics shows a growth of U.S. workforce at an annual rate of 1.6 % with added 79 million workers from 1950 to 2000. According to BLS, the annual growth rate in the native workforce of the United States is expected to slow to .06% between 2000 and 2050 (Phillips, Connell, 2003). TPS is a leading provider of switching and e-payment processing related solutions and services to financial institutions worldwide. With over a decade of experience in the field of e-Banking, TPS successfully empowers the financial and self service infrastructure of over 100 financial institutions and Telco in over 27. TPS consists of a diverse group of professionals with vast experience and technological backgrounds. TPS has a strong focus on its strategic vision developed for maintaining and creating a healthy workplace in which everyone is presented with opportunities for growth, learning and contributions to important corporate goals in order to fuel the workforce commitment. Using a strong research and theoretical base of what truly motivates employees; TPS has produced a report to find the strongest leverage, in large or incremental steps, for greater employee involvement, trust, leadership quality and genuine support of company objectives. TPS understands that employee turnover is a silent killer of business productivity —yet it's a solvable problem. We understand that time is money to our organization. Every minute of every day that the employee retention problems persist, our organization is losing valuable time, energy, and resources. This report highlights the current retention strategies that TPS already practices, assessment and the importance of those strategies, some loose ends that we can tighten and some new employee strategies that TPS can consider to increase employee retention of key talented personnel. TPS has carefully devised its retention strategy based on its company objectives and the reasons for employee turnover. Through its retention strategies, TPS aims to retain existing employees, provide its existing and potential employees a dream place to work but also make a productive work environment. Our retention strategies are important as they are directly linked to the company objectives. First, retention matters as it’s expensive to constantly replace people. The cost of attracting, recruiting, hiring, training, and getting new people up to speed is tremendously more costly and more wasteful than most realize. Second, productivity is directly tied to retention. Companies with high turnover are at risk for low productivity. Studies from the Gallup organization show employees who have an above-average attitude toward their work will generate 38 percent higher customer satisfaction scores, 22 percent higher productivity, and 27 percent higher profits for their companies (Branham, 2005). Traditionally, researchers have sought to explain voluntary turnover amongst employees in terms of two factors: perceived ease of movement, and perceived desirability of movement. Thus People generally leave if they are dissatisfied with their job and if job alternatives are available (Branham, 2005). However, while job dissatisfaction and available employment alternatives are clearly potential contributors to an employee’s decision to leave a given job, one of the most promising recent approaches to predicting employee turnover is the job embeddedness perspective developed by Mitchell & colleagues from the University of Washington (Branham, 2005). This approach recognizes that people stay with an organization for reasons other than how satisfied they are with the job that they do. TPS, keeping its strategic business objective in mind, the cost of employee retention and reasons for employee turnover, has its strategies in place and embeds it as a part of its corporate culture through better matching of employees to fit the job, better integration between employees and corporate missions through trainings and orientations, better work environment, better managers, better culture and better accountability for turnover. It aligns its HR practices with its business objectives. TPS measures its retention costs as not only the overt costs such as the advertising and recruit fees to replace an employee but also the hidden costs such as the lost productivity cost or lost sales cost when a sales employee leaves. With reference to its strategic goals, TPS currently implements a number of strategies to inspire worker loyalty. 1. Monitoring Employee Life-Cycle Sentiment TPS believes that monitoring its employee’s sentiments is critical to successful workforce management. The continuous flow of employee feedback through employee satisfaction surveys conducted by HR, and timely conversations between team leads and co-workers enables us to quickly identify workforce issues and be proactive in resolution. TPS also conducts exit interviews to discover workplace issues that have caused people to leave the organization. With the exit interviews, TSP can clearly generate a report showing the common reasons for employee turnover and can formally distribute the results of exit interviews to senior management to take measures or revise strategies to act upon them. However there are times when the effectiveness of the exit interviews becomes worthless when very little or no action is then taken in making workplace and personnel changes as a result of information captured. To make this strategy more effective, employee monitoring needs to be a continuous and frequent practice rather than ad-hoc or in response to an identified problem (Ahlrichs, 2000). 2. Hold Supervisors Accountable TPS believes that supervisors are in the best position to directly influence employee morale and other attributes that ultimately affects employee retention. TPS currently invests heavily in training its team leads and supervisors on leadership skills, how to keep a good working relationship with its team members, managing team work and also trainings on understanding various other worker retention issues and ways of managing them. To further improve the effectiveness of this strategy TPS can align corporate retention goals to those of supervisors by a) tying supervisors’ compensation to retention goals and b) promoting turnover as a corporate objective (Taylor, 2002) 3. Deliver a Balanced Workplace TPS continuously rationalizes the work/ life balance to help employees feel personal satisfaction when meeting company objectives. TPS offers an environment where employees don’t have to struggle with the demands of their jobs conflicting with the satisfaction of their personal lives. Currently TPS arranges family picnics, child day care services for its employees, maintenance services of cars so that employees can care for their cars without having to spend personal time with this chore. Social events are also organized like picnics, movies, tennis competitions. These types of social events enable workers to create the social bonds that emotionally tie them to their work and employer. While these events offer employees the chance to meet and bond socially, they also demonstrate to potential employees the value a company places on personal fulfillment, which can dramatically differentiate one company from another during the recruiting process. To improve the effectiveness of this strategy TPS can also offer flexible work schedules through part- time schedules, job sharing and even telecommuting. (Taylor, 2002) 4. Reward organizational performance TPS believes that offering high pay contingent on organizational performance is a constructive way of attracting and retaining good quality staff and for that TPS rewards all its employees with an annual bonus. Rather than individual or team performance-pay schemes, schemes that provide some return to employees based on how well the organization as a whole performs have been consistently found to improve both productivity and retention rates (Jack J. Phillips, Adele O. Connell, 2003). Besides rewarding its employees based on organizational performance, TPS also provides benefits like medical insurance, car insurance, wedding gifts, travel insurance, personalized thank you notes from the company and personal loans. 5. Pro-Actively Manage Succession TPS ensures employees know what to expect and what is expected of them, by providing succession plans that prepare each employee for a two-year business cycle and how they will be compensated as a result of achievements. These succession plans are aligned with corporate goals and strategies to ensure that the business is operating as a single, unified organization. This frees the employees from the distracting thoughts of compensation and advancement (Taylor, 2002). 6. Encourage teamwork and employee engagement and empowerment TPS encourages and creates an environment for working in interdependent teams who are then collectively rewarded and held accountable for the defined output. TPS believes that the stressful impact of high expectations and productivity on employees is lessened by the social support that derives from working as part of a cohesive team, and also by the extent to which employees feel that they can exercise some personal control over the pace and of work. Team-based work systems are historically associated with improved quality of work, and reduced turnover TPS allows its employees the opportunity to exercise reasonable discretion in respect of how the work is performed (e.g. varying timing, methods), learn and regularly apply new skills and knowledge skills, perform a natural sequence of tasks, i.e. with a clear end product, come into direct contact with clients and end-users, judge their own performance levels whilst performing their work and interact regularly with co-workers. Managers are encouraged to unleash the creativity of its top people by soliciting their ideas on how to improve the bottom line. While encouraging team work on one hand, TPS teaches its managers, where necessary, to give their people a sense of empowerment by providing the breathing room to take risks, use their own best judgment, and be accountable for the decisions they make. We try to engender a positive response to all such employee questions: Is my work valued? Does my opinion count? Are new ideas welcomed? Are people treated with respect? Am I evaluated and rewarded on my performance? Does leadership act with integrity? (Ahlrichs, 2000) 7. Transparent organizational communication TPS believes that employees identify more strongly with companies that keep their employees continually and directly informed about their plans, goals and operations. To keep its employees informed, the company holds regular (e.g. quarterly or biannual) whole-of-organization briefings on plans, progress and performance. The wide spread information sharing leads generally to increased trust in management, reduced resistance to change, and an increased likelihood of employees engaging in extra-role citizenship behaviors. Open communication is also encouraged as the unavailability of seniors sends a wrong message and no one wants should feel that they are in the dark or ignored (Ahlrichs, 2000). Recommendations for new retention strategies for 2009 and beyond Regardless of whether increased turnover is due to the improving labor market or the start of a mature workforce heading into retirement, TPS should stay committed in improving strategies to inspire worker loyalty and commitment and also make this place a dream place to work in. Develop and communicate an ‘employee value proposition’ A consistent and positive message should be communicated to all the employees to keep them well informed of all the benefits (with a focus on all on- and off-job opportunities, financial rewards, trainings etc) that are tied to their jobs and as such to being a part of TPS. The employee benefits should be clearly put up on the website and other traditional & job search outlets for all the prospective employees. Establishing an employee value proposition also helps the organization define the sort of person who would be a good fit with their mission, values and future goals (Ahlrichs, 2000) Select more rigorously, based on ‘fit’ While fit to the job can be improved post- employment (e.g. through training and job placement), fit with the organization, its values and culture, generally reflects more stable values and preferences on the part of employees – attitudes and beliefs that are hard to change, and therefore must be possessed on entry to the organization (Jack J. Phillips, Adele O. Connell, 2003). Train intensively and broadly Companies that train their employees extensively (without rationing) generally attract and retain a better caliber of job applicant, since achievement-oriented employees regard the opportunity to develop their own personal human capital as a both a desirable goal, and also a suitable reward for demonstrating commitment to the company and its goals. Training opportunities should be provided for employees at all levels, and its content should be broad (i.e. provide access to different occupational roles), and span both technical (i.e. certificate) and non-technical aspects of work (e.g. teamwork) (Ahlrichs, 2000). A Workplace with brand experience Developing a recruitment brand strategy has become a successful recruitment tool used by competitive companies. TPS extends this strategy by creating a workplace brand value proposition that defines the “employee experience” and is designed to build worker loyalty. Thus, the recruitment brand has become shorthand for communicating the workplace Image of a company and is used to attract the right talent. While sponsoring events in universalities, TPS has its punch line like “Energize your dream career”, “passion for Growth” etc, that conveys to the young generation the excitement of working at this company. The use of employment brands has gained popularity as a tool to attract the right talent. Managing the employment brand experience as a strategy is gaining popularity as firms refocus on worker retention and reducing the cost of turnover (Taylor, 2002). TPS believes that the key to retention is found in a strategy that considers both its employees’ personal aspirations (career development, recognition, reward) and the aspirations they possess for its organization. Key workers will continue to be a part of TPS as long as they see career opportunities that allow for flexibility, growth and development. Leaders should continue to enable meaningful and fulfilling work experiences for their teams to win loyalty and retention- especially when times are tight and monetary rewards are slim. If talented people really believe that the company wants to treasure them, count on them and reward them, then they are most likely to hang in there. It is also very important to provide a role that best suits the individual’s particular interests. Works Cited Nancy S. Ahlrichs, “Competing for Talent: Key Recruitment and Retention Strategies for Becoming an Employer of Choice”, Davies-Black Publishing (November 25, 2000) Jack J. Phillips, Adele O. Connell, “Managing Employee Retention: A Strategic Accountability Approach (Improving Human Performance)”, Butterworth-Heinemann (21 Oct 2003) Stephen Taylor, “Employee Retention Handbook (Developing Practice)”, Chartered Institute of Personnel & Development (1 Mar 2002) Leigh Branham, “The 7 Hidden Reasons Employees Leave - How to Recognize the Subtle Signs and Act Before Its Too Late”, Amacom (2005) Read More