Effects of Poor Employee Retention Strategies in Organizations - Case Study Example

Effects of poor employee retention strategies in organizations Name: Course Instructor’s name Institution Date Problem statement / research issues Effects of poor retention strategies on organizations have been a major phenomenon over the years, and most organizations have been caught up trying to implement strategies that will enable them curb retention problems. Employee retention has been a major issue in most companies, and this has been attributed to lack of enough skilled labor and poor employee turnover. Top leadership in major cooperation lacks the necessary skills to effectively determine and employee good retention strategies. Poor geographical and social, economic problems have played a major role in poor retention of employees, and this has made retention a global concern (Allen and David G, 2008). Having that major international organizations lack a balance between a company’s wants and an employee’s needs for example CROWN UAE, lacks an understanding of the environment it operates in and the heterogeneity of its employees. Most organization experience poor employee turnover. Poor strategies on retention have played a major role in the general wellbeing of employees and the total cost incurred by organizations while trying to retain their top talent. Poor strategies on retention increase the total overhead cost of an organization; cost of hiring new employees after losing an employee. Cost of onboarding a new employees i.e. training and wastage of management time. There is lost productivity when an organization can't retain its top performers and new ones will take longer periods to adjust (Shaw, Dineen & Vellella, 2009). There are customer service errors associated with new employees, the cost of training and most importantly the cultural impact that that consumes a lot of time as an employee tries to adjust in. Poor strategies on retention have seen most organizations through their human resource department affect the general morale of employees as most of these organizations don value their employees. These poor strategies have been attributed to the inability of an organization to measure the overall economic value of employees hence maintaining a royal workforce is a major challenge. Organizations that actively encourage layoffs create long term effects that take a lot of years to fix and this is as a direct result of poor retention strategies in an organization. Organizations in the 21st century don’t realize how valuable employees are to them and thus spend less and less on formulation of strategies to help retain their workforce. Most corporations that have withered has been as a result of poor strategies for employee retention. The environment where an organization operates should reflect the heterogeneity and complexity of the workforce (Allen, and David G, 2008). These poor strategies have been attributed to a mismatch between what the employee needs and what an organization is offering. Poor employee growth and advancement strategies, employee general wellbeing in terms of working conditions and what the company expects. Poor retention strategies have led organizations to lose over 50% of its workforce within a span of two years. Research has shown that one in every five new employees leave an organization after working for 2 to 3 years. 70% of organizations have reported a negative financial impact due to cost associated with hiring, recruiting and training of replacement employees. Over 60% cases of reported difficulties in replacing employees and general over 55% of organizations experience major problems with employee retention due to poor strategies (Tapia, A. H. & Kvasny, L, 2004). Clearly there is a major problem with the retention strategies employed by organizations to retain their staff. Gather information on the problem. Human capital is paramount in any organization, and lack of better-working conditions and environment has led to poor retention. Strategies employed by CROWN-UAE to curb retention problem are insignificant and insufficient and as a result it loses employees year in year. There is a lack of understanding by the top management on demographics of the workforce, and the diversity of these employees and the environment has made it impossible to implement these strategies. A lack of implementation of these strategies can be attributed to the fact that top management lack an understanding on how best to operate in UAE and most importantly retain its workforce. Just like most organizations in the UAE, CROWN has failed to balance its international and local employee obligations. UAE is predominantly Muslim and local and employees associate mostly with organizations that respect the values and culture. International employees experience social, cultural shocks in UAE as compared to their home countries. Thus, problems have always occurred when organizations lack a balance between internal and external threats. Over 63% of international employees have left their workstations as from 2011-2014, many citing poor working conditions and environment. UAE is a strict region for female employees to work in, and this has been impacted majorly by poor strategies aimed at employee retention by companies operating there. Female executives don’t thrive in UAE as the locals hardly regard female, and this is majorly attributed to their culture. And any organization shipping top female executives to UAE lacks an understanding of the local cultures and social values. UAE requires that organizations employee locals in many fields if not all, having flexible working hours due to the conditions in that place. Retention problems are associated with remuneration packages offered by organizations and to a larger extent social, economic and political factors. Most organizations apply generic approaches instead of identifying and delivering what employees need. Research has shown many retention problems are as a result of poor alignment between organization climate and culture and a mismatch between an employee and the job. Lack of top talent in countries of operation like UAE forces organizations to ship employees, and this is costly for organizations and despite the experiences possess by employees they have to be retrained to adopt to new environments. I think if organizations experience retention problems due poor strategies, it is as a direct impact of the environmental requirements of the host country as opposed to their general organization strategic plan. Secondly, retention problem will always arise if organizations keep on channeling cost to training and hiring international employees instead of investing in local talents or better still attract top local executives with better remuneration packages to avoid retention problems. Options for a logical ‘argument’. Most organization experience a low employee turnover rate directly attribute to poor strategies employed by organizations to help retain employees. Thus poor retention problems are attributed to ineffective and inefficient strategies to help retain top talent. Poor employee retention strategies are associated with the inability of the human resource department and the top management, in general, to adopt strategies to help retain top talent and increasing employee Morales. Most employees in these organizations feel there is no opportunities for growth and development and, therefore, the feel the need to quit such organizations in search for greener pastures elsewhere. Retention has also been attributed to poor coordination among the employees and their immediate supervisors and whenever employees feel that there is poor coordination between them or the department some will quit, for this reason (Thorpe and K, 2008). Thus, some organizations lack strategies to address this problem effectively. Organizational climate and culture have been a major factor for employees quitting organizations have that some fail to cope with this values and customs and organizations don’t seem to have effective strategies to curb this employee retention problem. Most organization fail to match an employee’s job and remuneration thus some employee feel undervalued and quit the organization and this is due to poor strategies that organizations use to match individuals with specific jobs and skill sets. Generally organizations don’t seem to pay attention to what causes low job satisfaction and identify what attracts and retains top talent. In most cases, poor employee retention is caused by top management, the employee himself and the working environment. At the end employees in any organizations are affected by the negligence of their top managers. To a greater extent families of the employees are affected whenever one of their family members has to quit his or her job due to unfavorable working environments. Retention has been a major problem in organizations since the mid-20th century when activist groups started actively to create awareness and fight for employee needs. This led to more and more employees wanting better conditions in return for their services (Thorpe and K, 2008). Several acts came into play to protect employees and employees were more aware of their rights and this insurgency brought about a need for organizations to come up with strategies to cater for employee needs but they were not adequate enough and employees started leaving their places of work in search of better-working conditions. Employee retention and poor strategies on employee retention are a major concern to companies nowadays having that organizations lose almost 60% of their workforce in two years after joining the company while most young employees are intolerant and over ambitious, and most organizations are finding it hard balancing between the two. Consequently organizations loose employees yearly due to poor retention strategies (Lee, & Lien, N. 2006). Anticipated outcome/opinion Employee leave organizations because of many reasons and to effective solve the retention problem an organization should identify the problem and try to solve it having that employees are vital to any organization and thus their general wellbeing should be of paramount importance to any organization. Some line managers are the problem as to why most employee leave due to a poor working relationship with their immediate supervisors (Tapia, A. H. & Kvasny, L, 2004). Organizations should identify and replace line managers if they are the reason behind massive walkouts in organizations. Therefore, organizations should come up with ways of assessing their line manager’s strategies using employees and him or her to determine the effectiveness of those strategies. Organizations will use the evaluation results to take the necessary cause of action and avoid any more walkout. Organizations, on the other hand, should work with local governments to make the operating environment conducive for employees so as to avoid cases where employees are unable to cope with the environment therefore quitting. The top management should hold departmental managers accountable for employee turnover have that they are directly involved with the employee selection and training. By training this departmental heads on the importance of high retention and having employee that are satisfied with the job. By holding the line managers responsible for retention in their department they will come up with means and ways to effectively dealing with employees under them if need be on a personal level to have them satisfied hence high retention (Thorpe and K, 2008). Setting retention goals for the line managers will help come up with operational strategies that will lead to higher retention. Most employee quit due to poor environment and remuneration therefore creating a positive working environment, money attracts employees but the working conditions always sends them away therefore it’s imperative to harness the working environment so that it may be conducive for the employees to work in. Having a job quality strategy and workplace support will limit instances where new employees feel neglected and opt to quit. Therefore ensuring these new employees receive all the help and support needed will limit cases of poor retention. Most importantly enhance connections between employees, employers and the organization (Lee, & Lien, N. 2006). This will help build stronger bonds aimed at creating workplace harmony between employee and top management hence boost employees' morale and satisfaction consequently quelling cases of employees quitting organizations. How would this solution be implemented in context? Is it practical? These solutions are attainable and implementable. When organizations seek to create job satisfaction and boost employee morale they will need to develop “onboarding” programs to help new employees adopt and have line managers spend more time with the new employees to boost their morale. Having corporate office in the organization practice “employee scavenger hunt”, by giving executives 5 employee names one or twice a year and ask them to find the employee in question and get to know him or her on a personal level this will create job satisfaction and creating a bond between executive and subordinates thus create employee loyalty and appreciation of the work they do. Organizations should seek to higher high caliber employees with a track record of performance and avoid those who have a history of disloyal employee who shift across organizations. Research has shown that high caliber employees improve a company revenue and are more committed and career oriented therefore having a higher retention rate (Lee, & Lien, N. 2006). It’s important to identify career paths and provide opportunities for development for those employees. In many cases employee enjoy learning new skills as much as making money thus having academic leaves in an organization encourages employee development and this transforms to high retention having that those employees seek development so that they can fit into a more senior role in the organization, and thus they rarely having any plans of quitting the organization (Shaw, Dineen, & Vellella, 2009). Organizations should always make their employees feel appreciated not only in monetary terms but through treatment with respect and being appreciated. This will help curb instances of poor retention, and this can only be achieved through coming up with strategies that are effective and efficient for employees to work in. Peer recognition has worked in many organizations and helped create bonds and thus having other employees appreciate and reward their fellow employee will give other employees hope that they will be rewarded for their support to the organization and by so doing heighten their hopes and job morale (Vardaman, et al., 2008). Measuring attitude of the employees will help an organization come up with some assessment probably once in a year to get views on the environment and working climate. This will go a long way in solving retention problems that may be attributed to the environment. Focusing on employees’ families heightens loyalty and leads to higher retention in that companies having savings for their employees’ children, having employee families get together will help create bonds beyond the organizations and help retain employees having that most employees wouldn’t want to start new life somewhere nor affect their children’s education and social wellbeing. Read More