Employee Retention is the need of the hour. As a result of growing opportunities and various career paths available, employees now can easily be lured to many more opportunities and challenging work.
Hence it has become increasingly important for the companies to retain their best performing employees – as these employees will prove to be the biggest asset to these very companies.
As per the Harvard Business School Press on Retaining Your Best People, certain costs involved with employees leaving your organization are:
Direct Expenses: Includes the out-of-pocket cost of recruiting, interviewing and training a replacement. (And in this market, the replacement may require a higher salary than the one who’s leaving – not to mention a signing bonus)
Indirect Costs: Includes effect on workload, morale and customer satisfaction. Will other employees consider quitting? Will customers follow the employee who left?
Opportunity Costs: Includes the knowledge that is lost and the work that doesn’t get done while managers and other employees focus on filling the slot and bringing the replacement up to speed.
This shows that the cost of hiring and selecting new candidates is twice the cost of retaining them. Managers these days are waking up to the costs involved when a good employee walks out of the door. So it is important to have a checklist for employee retention. Here are some of the measures that a company may follow:
Robust Career Advancement Opportunities:
Employee dissatisfaction with the career advancement opportunities within the company was listed as a threat to retention by 85%. All individuals want to grow professionally in their respective careers. Texas Instruments has a personal development plan in place for each for the company’s 40000 odd workers. Personal development plans are created by the employees and then reviewed by their managers, who ensure that the company provides the training and education the employees need to meet their goals. It is very important that the organizations help their employees advance their careers and ultimately improve business results.
Have a Great Manager:
It is being rightly said that, “Employees don’t leave companies – They leave managers”. It is very important for any organization to have a right set of managers at every level. Managers should be such that allows his/her subordinates to grow and develop as individuals. Have managers who take active interest in the development of their juniors and help them have a strong career path with lots of opportunities. A furniture retailing employee once said that “Every Friday we would get together at a local pub and the general manager would come in and start the part with one questions, ‘So, how was your week?’… Mostly we just vented. But the amazing thing was, he was truly interested. We went home those weekends feeling great.” This example brings me to the 2nd point – Create a Positive Work Environment.
Create a Positive Work Environment:
From the instance above we can see that if a manager is dedicated towards the betterment of his employees – he will surely try to create a great positive environment at work too. It is important that the employees feel a sense of belonging. It is important that the organizations today create an environment of trust where employees feel comfortable to voice their opinions and concerns. It is also important that friendly relations are maintained and every individual is respected.
The basic nature of an individual – talks about his/her need to be appreciated for the work done well. For any individual it is very important that he/she is recognized for the contributions made in the organization. This makes them feel that the organizations truly value them and that their contributions s welcomed. Recognizing the employees by monetary rewards is not at all important. A simple pat on the back by the supervisor – will work wonders. Appreciation notes can be given to the superior performers and they can also be recognized publicly. This will definitely boost the employee’s self-esteem and he will be dedicated towards putting in more efforts.
Information – Sharing:
Freely dispensed information – about the business plans, strategies and financial performance – tells employees that you trust them with the data. Information sharing will also communicate to them that you – as an organization believe in their ability to understand and accordingly contribute to the business as a whole. This information sharing need not be only from the top management. As and how the managers are aware of any developments in the business – he/she should share it with the employees (subordinates).
It is generally believed that autonomy in the hands of all the employees is not advisable. But people enjoy working with a minimum of supervision. It is important that the responsibility of work in given to the employees. Send a team off on its own with the charge of exploring a new market or solving a business problem. The employees will now be more confident and will trust the organization as they now know that the organization also trusts his/her capabilities. It is important that freedom and autonomy is being given to the employees. It is important to create that type of an environment.
Let People Stretch:
Employees today are in search of challenging work and projects. Entrusting them with the challenging work makes them feel that the boss believes in their capabilities. “Put people in jobs before they are ready,” advises McKinsey and Company. It is important to give employees stretch assignments, sometimes before they are ready. This can be done only if you believe in your human workforce and if they have got the right attitude and attributes.
Just as the employers believe in providing feedback to the employees – they should also ask for feedback in return. Don’t wait for the exit interviews for the employees to tell you about what is wrong in the organization. It is important that feedback is asked for – for the organization as a whole and the manager. The other important point to be kept in mind is that – it is not only important to solicit feedback – it is also important to ACT ON the feedback. Listen to the employees patiently. Be honest to them. Tell them what can be done and what cannot be. And try to address all the issues. And if possible come up with solutions to tackle those issues.
Despite all these efforts, some people will still leave your organization. The pull of the market is very strong – it is not always possible to retain the best employees. But on keeping all the above things in mind – one can try and control how many people leave the organization. It is important to build a great unit. This minimizes the risk of losing the very people you want to keep.
[The article has been written by Miloni Y. Sanghrajka. She is a student at K J Somaiya Institute of Management Studies and Research. She is from a commerce background and MBA with specialization in HR .]