Employee Retention in HRM

Figure 1: Organizational goal of keeping productive and talented workers.

 

Introduction to Employee Retention

Any organization's long-term success, profitability, and health depend on its ability to retain its most important personnel. Retaining the top people in any firm is crucial for various reasons, including improved sales, satisfied coworkers and reporting staff, efficient succession planning, and customer satisfaction. Employee retention is the practice of motivating staff members to stay with the company for an extended length of time. Through this method, employees are motivated to stay with the company for as long as possible or until the project is finished.

 

James & Mathew (2012)[1] stated “The primary reason for the retention of employees is  to prevent  its  talented  employees  from leaving”

Denton (2000) [3] has clearly stated that employees who are happy and satisfied with their jobs are more dedicated towards their work and always put their effort into improving their organizational customer satisfaction.

 

 Figure 2: Employee Retention Strategies

 

Key Factors that Contribute to Employee Retention

(1)    Competitive Compensation and Benefits:

Offering competitive salaries, and benefits is mostly essential for attracting and retaining the best employees in the organization.

 

Milkovich and Newman (2004) discussed that monetary pay is an essential factor in keeping the employee.

Hytter (2007) concluded in research that there is a correlation between reward and retention.

 

(2)    Career Develop Opportunity:

This allows individuals to reach new levels of professionalism through areas like networking, continued education, or skill advancement.

orwitz et  al., (2003) explored in research that an important factor of retention is personal as well as professional growth and it is the promotion opportunities which enhance the commitment of the employees and in turn results in employee retention.

Kroon (2013) identified that development opportunities can improve employee commitment to retain employees in organizations.

 

(3)    Work- life Balance :

Work-life balance involves the minimization of work-related stress and the establishment of a stable and sustainable way to work while maintaining health and general well-being.

Deery (2008) suggested some retention strategies which help in balancing the personal and professional life

Shrotriya (2009), it is proved in this study that a balance between professional and personal life increases employee productivity and competence which in turn would result in commitment and satisfaction.

 

(4)    Recognition and Rewards:

These are important tools that can be used to motivate employees and improve their performance. Rewards can include things such as bonuses, raises, or special privileges, while recognition can come in the form of words of appreciation or awards.

Agarwal (1998) has given an explanation to the term reward as something that the organization offers to the employees in response to the work as well as performance and something which is desired by the employees

 

(5)    Positive Work Culture:

One that prioritizes the well-being of employees, offers support at all levels within the organization, and has policies in place that encourage respect, trust, empathy, and support.

Ortega-Parra & Sastre-Castillo (2013) stated Organizational culture is a system of values, beliefs, and behaviour patterns that subconsciously drives  members of the organization to make each choice and decision

Schneider et al. (2013) indicated organizational culture as the norms that members of an organization perceive as their work environment, and these norms influence how members behave and adapt to achieve organizational goals.

Nwibere (2013); Sharma & Good (2013) stated strong organizational culture is vital to enhancing organizational performance

 

(6)    Effective Leadership: 

      The ability to successfully influence and support a team or group of people. It's important to point out there's much more to effective leadership than just delegating from the top.

       Kaye and Jordan-Evans (2002) highlighted that a good boss can influence the retention of employees in an organization.

B    udhiraja and  Malhotra  (2013) explored  in their  study  that leadership  style determines  the success/failure

 

(7)    Health and well-being packages:

It's a win-win situation, as it leads to many benefits for the company. Wellness programs don't just increase productivity but also lead to increased engagement, improved employee morale and retention, and reduced health risks. There is a positive connection between employee wellness and the performance of a business.

Hong, Joungmin (2019), Recognizing the value of a healthy workforce, more and more organizations are implementing wellness programs. Therefore, it is important for organizational leadership to understand what wellness is and what contributes to wellness program effectiveness.

 

(8)    Inclusion:

Refers to the practice of ensuring that individuals, regardless of their differences, are treated fairly, and respectfully and have equal opportunity in the organization

According to Biggs (2017), Frederick A. Miller was the first person to realize the importance of diversity and inclusion in the workplace

Sabharwal (2015) stated several other authors have explicitly stated that current diversity efforts have led to the emergence of the concept of inclusion

 

(9)    Flexibility:

Refers to the ability for employees to have some control over when, where, and how they work, it promotes work-life balance, increases job satisfaction, and enhances overall productivity

Ellet et al., (2007) identified that flexibility plays an important role in the retention of employees.

Figure 3: Factors Required for Employee Retention

 

The importance of staff retention and how it brings various benefits to a Company

Employee retention promotes the health and success of your organization. The time, stress, and cost of hiring and training new employees are significant, and turnover can have a negative impact on business outcomes.

They not only make employees stay in your company but also boost productivity and promote higher levels of engagement, which ultimately increases revenue. The main goal of any retention strategy is to keep turnover as low as possible. In order to do this, it has to improve the employee experience.

Retaining employees should always be a business priority, regardless of how low the existing employee turnover rate is. Investing in an existing employee with training or a pay increase is much more cost-effective than replacing them. While actions such as raising an employee’s annual salary seem drastic, a small increase could make a big difference and encourage them to stay with your organization.

Employees tend to commit to companies who appreciate them. So, if can’t reflect how much you value your employees with a pay rise, how about giving them a thoughtful reward or a gift instead.

 

Figure 4: Benefits of Employee Retention

 

Challenges of Employee Retention

Eldridge  &  Nisar (2011);  Terera  & Ngirande, (2014) in their study, the author talks about three types of challenges that companies face in the retention of employees. They are,

(1) Stiff competition from rivals,

(2) brain drain i.e. migration of skilled labor from own country to another country which offers better

opportunities, and rewards.   

(3)  Companies are unable to predict the future requirements  of employees and thus unable to  take corrective action

 

 Conclusion

Human resources are complex and not easy to understand. These are the assets which can make as well as break an organization. Retaining them will help in the long-term growth of an organization and will also add to their goodwill. But the most difficult task faced by an organization today is retaining as well as satisfying these resources. Although the research paper tried its level best to reveal the various research works done and the contributions forwarded by various researchers in the area of employee retention and job satisfaction, but still much scope remains for more exploration in the field of employee retention and it by taking into consideration the factors like compensation practices, leadership and supervision, career planning and development, alternative work schedule, working conditions, flexible working hours etc. it is very important that these efforts should be conducted by HR professionals.

 

  

References

Maertz, C.P., Jr., & Campion, M.A. (1998). 25 years of voluntary turnover research: A review and critique. https://www.researchgate.net/publication/234021717_25_Years_of_Voluntary_Turnover_Research_A_Review_and_Critique

 

Stauss, B., Chojnacki, K., Decker, A., Hoffman, F. (2001). "Retention effects of a customer club", International Journal of Service Industry Management. https://www.emerald.com/insight/content/doi/10.1108/09564230110382745/full/html?skipTracking=true

 

Kamalaveni M.S, Ramesh S, T Vetrivel, (2019). A Review of literature on employee retention. https://www.researchgate.net/publication/335677274_A_REVIEW_OF_LITERATURE_ON_EMPLOYEE_RETENTION

 

Jeyaseeli P, (2021). A Review of Literature on Employee Retention. https://ijaem.net/issue_dcp/A%20Review%20of%20Literature%20on%20Employee%20Retention.pdf

 

Yasas L. Pathiranage, (2021). A Literature Review on Organizational Culture towards Corporate Performance.

https://www.researchgate.net/publication/344667769_A_Literature_Review_on_Organizational_Culture_towards_Corporate_Performance

 

Shalini Garg, Snehlata Sangwan, (2020) Literature Review on Diversity and Inclusion at Workplace, 2010–2017

https://journals.sagepub.com/doi/full/10.1177/0972262920959523

 

Marc Holliday, (2021). 10 Benefits of Employee Retention for Businesses. https://www.netsuite.com/portal/resource/articles/human-resources/employee-retention-benefits.shtml

 

Diwakar Singh, (2019). Employee Retention with Focus on Recent Trends. https://www.researchgate.net/publication/331306592_A_Literature_Review_on_Employee_Retention_with_Focus_on_Recent_Trends