Employee Retention Issues - Case Study Example

Every company’s success is reliant on having a steady and talented workforce. However, holding on to workers is not an effortless task. Every year companies spend huge amounts of money on recruiting yet worker scarcity is still on the rise. Employee retention is a critical human resource management practice and is crucial for an organization which aims to maintain its growth and prosperity in the future Employee retention is one of the most persistent and difficult problems managers have to face in all industries and all locations (Carlaw, Deming& Friedmann, 2002). Labor market structures, strength of competitors and employee preferences all play a significant role in employee turnover (Taylor, 2002). High employee turnover is an inevitable reality (Carlaw, Deming& Friedmann, 2002). Companies need to spend a considerable amount of money and time and effort and resources to hold on to employees on the team. In order to gain long term success organizations need to keep good employee retention as one of their highest priorities. It is important to determine the cause of the problem before efforts can be made to correct it, therefore, before an organization can begin to develop retention strategies, It must identify the reasons why the employees leave an organization. A comprehensive understanding of these factors can help management develop better strategies to deal with employee retention problems. Reason for leaving an organization may vary from individual to individual but they can be classified into a few basic categories. Rothwell (2001) identifies the following reasons which result in employees leaving an organization: Dissatisfaction with the future prospects in the organization and the belief that they have better prospects in other organizations. Employees may dislike the supervisor and approaches to management practiced. This means that the employee is leaving the manager, not necessarily the organization. Employees may dislike the work they are doing and may not be satisfied with it Employees feel that their wages are low or not competitive or they do not get enough benefits which they feel they deserve. Workers may also be stressed out and may feel that they are working too much with too little time to relax. Based on these factors, an organization can develop various retention strategies which will benefit both the organization and its employees. The most effective retention strategies for an organization are those which focus management efforts on discouraging employees from leaving the organization by “tying in” the employees. When the workers are presented with “better deals” they are more likely to stay with the organization. Secondly the organization needs to keep an eye on those competitors who pose a threat for stealing away valuable employees. And lastly, companies need to build strategies which improve the organizations image, this includes branding and public relations activities, these would make the organization more appealing to the labor markets (Taylor, 2002). The employee retention process begins at the recruitment stage. The right hiring decisions ensure long term relations with employees which are equally profitable for the organization (Carsen, 2005). Both the employee and the organization should be clear on the purpose of hiring. This is done through careful assessments to determine how the employee will adjust to the job description and the culture. Employers should concentrate on finding employees who are a perfect fit for the job and the organizational environment. Finding the perfect fit in the initial stages helps in preventing costly conflicts at later stages. Attitude surveys are another crucial tool in employee retention, and should be integrated in the overall retention strategy (Rothwell, 2001). These surveys can be used to analyze the attitudes of potential, existing and exiting workers. Information from these surveys reveals problems that employees face in the organization and the reasons as to why those employees who stay choose to stay and why others leave. Based on results, the organization can improve in areas which are important for employee retention. Surveys which analyze the attitude of workers include ‘Exit Interviews’ which are used to gain insight into the reasons which cause employees to opt for leaving the company. ‘Decline Offer Surveys’ disclose information about the potential talent which is lost, and gives the company a chance to look at the areas which it is missing out on. Results from these can be used to assess themselves and develop ways of making themselves more attractive to potential employees. ‘Employee workplace Surveys’ can be used to determine why employees chose to stay as well as to uncover their concerns about the organization (Phillips, 2002). Commitment is one of the core ingredients in employee retention strategies, in order to build strategies in accordance to commitment, organizations need to capture talent, develop talent and use it for the organizational aims (O ‘Malley, 2000). An organization needs to develop employee engagement and commitment. Employee engagement is used as one of the strategies, which stimulate the employee enthusiasm. Work needs to be made more meaningful and rewarding (Jensen, McMullen & Stark, 2007). Management needs to conduct regular salary and wage reviews which determine the current market and industry salary levels, so that they can evaluate their own pay structure, and bring it in line with that of the other players in the industry (Rothwell, 2001). Employees who feel their work is being regarded and compensated appropriately will not feel the need to leave one organization for another one. Rewards are one of the major employee retention tools and require special consideration from management. These increase the employees will to stay and grow with the organization. Employee retention can be improved by developing innovative reward programs which suit employee needs. Rewards do not always have to be in the form of money, instead the company can use other forms of non momentary rewards which make employees feel valued. Employees will be more motivated to stay with the organization when they feel that their performance is being acknowledged and rewarded. Rewards can include monetary benefits and compensation, profit sharing and recognition. Job posting programs and job rotations need to be improved to give employees a chance to gain more visibility in the organization (Rothwell, 2001). Management approaches are needed to manage the employees and grow and develop them so that they may achieve success in their jobs Another strategy which organizations can implement for better employee retention is effective communication within the organization. The flow of communication has to be two way which means the employees should be able to communicate with management and management should communicate the direction as well as the future of the organization, along with what benefits its offers for those working there( Rothwell, 2001). By doing so the organization creates and environments where employees are allowed to communicate freely within the organization. This not only gives them a chance to express themselves but also makes them feel like they are being heard and can communicate their interests to those concerned. In this way employees will feel better towards their work and organization when they know their input and feedback is valued. Development of a better organizational culture is also an effective employee retention strategy. Organizations have to focus on building an atmosphere and culture which allows employees to make the best possible contributions to the work (Carsen, 2005). Management of diversity in an organization motivates employees. Individuals from diverse backgrounds have varying needs and interests, and it is management’s responsibility to ensure that these needs are considered. Developing a healthy culture includes having transparent human resource policies which are understood and accepted by all those working in that organization. The culture should also promote equality in the organization for all individuals so that they have equal opportunities to grow and prosper. Apart from these factors, employees seek a good quality working environment. The culture of the organization should also allow employees to maintain a balance between their professional and personal lives. Management should also consider including some social life in the organization, with more activities other than work for the employees (Rothwell, 2001). By creating such a culture the organization instills loyalty in their employees by showing them that they value their workers and are concerned about their welfare. Lastly, retention strategies cannot be fully implemented without a strong and determined leadership, which guides the organization. Moreover, there is a need for ongoing evaluation of the employee motivations. Managements have to monitor the strategies and their effectiveness to determine which practices work best for their organization. Management should also realize that employees at different levels in the organization will need different retention strategies. The top management will have different requirements than the bottom line, and it is the management’s duty to identify these needs and design strategies for holding these employees. Employee retention strategies should be focused on gaining commitment and loyalty from employees. Commitment and loyalty result from strategies which motivate and engage employees, encouraging them to stay with the organization. In order to build long term relations with employees, management needs to understand its employees. When management makes an effort to acknowledge employee needs employees feel valued as a result of which they are less likely to leave. References Carlaw M, Deming VK, Friedmann K (2002) Managing and motivating contact center employees: tools and techniques for inspiring outstanding performance from your frontline staff. McGraw-Hill Professional Carsen JA (2005) HR How to: Employee Retention. CCH Incorporated Jensen D, McMullen T & Stark M (2007) The managers guide to rewards: what you need to know to get the best for--and from--your employees. AMACOM Div American Mgmt Assn O’ Malley M (2000) Creating commitment: how to attract and retain talented employees by building relationships that last. John Wiley and Sons Phillips PP (2002) Retaining your best employees: nine case studies from the real world of training. American Society for Training and Development Rothwell, WJ (2001) Effective succession planning: ensuring leadership continuity and building talent from within. AMACOM Div American Mgmt Assn Taylor S (2002 ) The employee retention handbook. CIPD Publishing. Read More