Human Resource Management – Retention
Employee retention refers to the ability of an Organisation to retain its Employees. In reality, just about every Organisation will have to live with the fact that a valued Employee will leave at some point in the future. Indeed a certain level of turnover can beneficial in order to introduce fresh approaches, ways of thinking and bring new ideas to the workplace. However, an Organisation which actively focuses on retention efforts should increase the likelihood of retaining its key Employees in the long term.
In simple terms, a usefulformula for calculating the percentage of Employee turnover is outlined below:
Total number of leavers over period X 100
Average total number employed over period
At the most general level, Organisations can track their overall turnover rates including both voluntary and involuntary levers. However, in order to gain a better understanding of underlying trends, it can also be beneficial to calculate separate figures for voluntary turnover as this will provide insight as to the number and reasons for resignations across an Organisation.
Determining Employee turnover by other criteria such as job function, seniority or office location can provide additional useful benchmarks or indications of the extent to which turnover differs by selected criteria. It also provides a useful starting point in determining potential ‘problem areas’ to investigate and focus on as part of retention efforts.
The High Cost of Employee Turnover
The costs of high Employee turnover can be substantial. Replacing staff can be expensive. Finding, recruiting, and training new Employees in order to replace a leaver represents major commitments in terms of time spent and new hire investment. Additional Employer costs can include:
Why do Employees Leave?
Individuals leave Organisations for numerous and varied reasons. The decision to move can often be triggered by ‘pull’ or ‘push’ factors or as a result of a combination of both.
Pull’ factors can include the prospect of a new role or an opportunity to go travelling. On the other hand, an Employee may feel ‘pushed’ out as a result of unhappiness in their current role, potentially due to a perceived lack of learning and development or progression opportunities. A low level of engagement, often caused by a poor relationship with a Line Manager, can often provide further impetus to an individual’s decision to leave the Organisation.
One of the greatest challenges facing Organisations generally is finding and holding on to strong performing Employees. Implementing effective Employee retention strategies will help get them to stay. The first step however is to understand why Employees leave. Outlined below are some of the most common reasons.
Employee Retention Strategies
Employee retention strategies can help an Organisation to retain its most valuable Employees. Implementing even basic Employee retention practices can result in lower levels of Employee turnover and helps to minimise the risk of key Employees leaving the Organisation. The benefits of retention efforts often result in a ‘win win’ for both the Employee and for the Employer, who ultimately retain highly valued and productive staff members.
Pay rises and better benefits and are two few ways of increasing levels of Employee satisfaction. However, these types of events are generally yearly in nature, if they occur at all, and their effect is often temporary. Five key considerations, all of which have been shown to have a positive impact in improving retention include:
1. Recruitment Process
Retaining good Employees begins during the recruitment and selection process. The objective of any recruitment strategy should be to attract a high performer who will stay with the Organisation for as long a time as possible. By spending appropriate time and effort at this time, and sharing a realistic preview of the role to potential Employees, will help to increase the probability of hiring the right candidate who will remain in employment with the Organisation for the long-term.
2. Induction, Onboarding & Follow up
Once the ideal candidate has been hired, the first few months in their role, team and the wider Organisation is crucial in order to build a long-term relationship. To gain the highest productivity and the greatest longevity, the Organisation should continue to engage with the new hire long after the initial training programmes have ended.
3. Career and Personal Development
Maximise opportunities for individual development and career progression. If Employees stay motivated and challenged and continue to development, this will generally result in a higher sense of long term commitment and enhanced retention levels.
Where promotion is not feasible, encourage sideways moves that will vary experience and make work more interesting and challenging. Removing barriers in order to enable Employees to transfer between positions internally is preferable to losing a valued Employee to an external Organisation.
4. Improve Work Life Balance
Promote a healthy balance between work and personal life. Proactively offer flexible working arrangements to Employees. This allows Employees to gain greater control over how, where and when they work, which can lead to enhanced work/life balance and increased retention levels.
Be accommodating where possible around leave and working hours, once it doesn’t interfere with operational requirements of the Organisation. Take the pressure off getting work done and encourage Employees to maximise their full lunch hour and take their full annual leave entitlement.
5. Consult with your Employees
Solicit ideas or suggestions from Employees as to what can be improved within the general working environment. This can be done through Employee Engagement initiatives such as Staff Surveys or Focus Groups. The information obtained can be used to develop a tailored retention strategy that focuses on interests and areas which are prioritised and valued by Employees in the workplace.
Where feasible, the Organisation should focus on some of the ideas and suggestions in order to bring these to reality. An idea could be as simple as offering healthier food options in the staff canteen. Ensure to honour any commitments made and share actions taken with all Employees.
In simple terms, a usefulformula for calculating the percentage of Employee turnover is outlined below:
Total number of leavers over period X 100
Average total number employed over period
At the most general level, Organisations can track their overall turnover rates including both voluntary and involuntary levers. However, in order to gain a better understanding of underlying trends, it can also be beneficial to calculate separate figures for voluntary turnover as this will provide insight as to the number and reasons for resignations across an Organisation.
Determining Employee turnover by other criteria such as job function, seniority or office location can provide additional useful benchmarks or indications of the extent to which turnover differs by selected criteria. It also provides a useful starting point in determining potential ‘problem areas’ to investigate and focus on as part of retention efforts.
The High Cost of Employee Turnover
The costs of high Employee turnover can be substantial. Replacing staff can be expensive. Finding, recruiting, and training new Employees in order to replace a leaver represents major commitments in terms of time spent and new hire investment. Additional Employer costs can include:
- Loss of key knowledge and skills with the departing Employee;
- Decreased or lost productivity - it can take a significant amount of time for a new Employee to operate at a comparable level;
- Potential loss of customers / clients loyal to the departing Employee;
- Positions which are vacant increase workload for others and may negatively impact levels of employee engagement or morale.
Why do Employees Leave?
Individuals leave Organisations for numerous and varied reasons. The decision to move can often be triggered by ‘pull’ or ‘push’ factors or as a result of a combination of both.
Pull’ factors can include the prospect of a new role or an opportunity to go travelling. On the other hand, an Employee may feel ‘pushed’ out as a result of unhappiness in their current role, potentially due to a perceived lack of learning and development or progression opportunities. A low level of engagement, often caused by a poor relationship with a Line Manager, can often provide further impetus to an individual’s decision to leave the Organisation.
One of the greatest challenges facing Organisations generally is finding and holding on to strong performing Employees. Implementing effective Employee retention strategies will help get them to stay. The first step however is to understand why Employees leave. Outlined below are some of the most common reasons.
Employee Retention Strategies
Employee retention strategies can help an Organisation to retain its most valuable Employees. Implementing even basic Employee retention practices can result in lower levels of Employee turnover and helps to minimise the risk of key Employees leaving the Organisation. The benefits of retention efforts often result in a ‘win win’ for both the Employee and for the Employer, who ultimately retain highly valued and productive staff members.
Pay rises and better benefits and are two few ways of increasing levels of Employee satisfaction. However, these types of events are generally yearly in nature, if they occur at all, and their effect is often temporary. Five key considerations, all of which have been shown to have a positive impact in improving retention include:
1. Recruitment Process
Retaining good Employees begins during the recruitment and selection process. The objective of any recruitment strategy should be to attract a high performer who will stay with the Organisation for as long a time as possible. By spending appropriate time and effort at this time, and sharing a realistic preview of the role to potential Employees, will help to increase the probability of hiring the right candidate who will remain in employment with the Organisation for the long-term.
2. Induction, Onboarding & Follow up
Once the ideal candidate has been hired, the first few months in their role, team and the wider Organisation is crucial in order to build a long-term relationship. To gain the highest productivity and the greatest longevity, the Organisation should continue to engage with the new hire long after the initial training programmes have ended.
3. Career and Personal Development
Maximise opportunities for individual development and career progression. If Employees stay motivated and challenged and continue to development, this will generally result in a higher sense of long term commitment and enhanced retention levels.
Where promotion is not feasible, encourage sideways moves that will vary experience and make work more interesting and challenging. Removing barriers in order to enable Employees to transfer between positions internally is preferable to losing a valued Employee to an external Organisation.
4. Improve Work Life Balance
Promote a healthy balance between work and personal life. Proactively offer flexible working arrangements to Employees. This allows Employees to gain greater control over how, where and when they work, which can lead to enhanced work/life balance and increased retention levels.
Be accommodating where possible around leave and working hours, once it doesn’t interfere with operational requirements of the Organisation. Take the pressure off getting work done and encourage Employees to maximise their full lunch hour and take their full annual leave entitlement.
5. Consult with your Employees
Solicit ideas or suggestions from Employees as to what can be improved within the general working environment. This can be done through Employee Engagement initiatives such as Staff Surveys or Focus Groups. The information obtained can be used to develop a tailored retention strategy that focuses on interests and areas which are prioritised and valued by Employees in the workplace.
Where feasible, the Organisation should focus on some of the ideas and suggestions in order to bring these to reality. An idea could be as simple as offering healthier food options in the staff canteen. Ensure to honour any commitments made and share actions taken with all Employees.
