Employees constitute the most important component of an industry. From laborers to managers, everyone has a role to play in the operations of a firm.
Companies aim for lower labor turnover and higher employee retention. However, the business environment is dynamic and nothing can be assured.
Companies often lose employees as a result of poaching by other firms or simply due to disappointment.
Why do firms try to retain employees?
Companies seek to keep their labor turnover low. They want their employees to stay a part of the business, due to many reasons.
Since experienced employees are more valuable than fresh individuals, firms try to retain their trained employees. Even if someone has worked in a firm for a minimum period, he/she has gained valuable first-hand knowledge experience about the relevant field.
Firms try to keep their employees from leaving because they have spent money on their training.
Employees are usually provided with induction training, off-job training, and on-job training at the firm's’ expense.
Selection and recruitment costs
Selection and recruitment is a process of selecting and hiring employees that firms need to repeat if any of their employees leave. This process is not only time-consuming but costly as well.
Firms incur a lot of costs while fabricating job descriptions/person specifications and preparing job adverts.
Firms also avoid shortlisting and interviewing of candidates due to the hassle and costs involved.
They try to retain their employees, in order to prevent the whole recruitment and selection process.
Why do employees leave and how to keep them from leaving?
Poaching and incentives
Employees may leave a firm due to poaching by other firms. In competitive industries, experienced and trained employees are often poached by other firms, which offer upgraded salary package, enhanced incentives, and better fringe benefits. Competitive and career-oriented employees are likely to prefer these benefits over firm loyalty.
In order to avoid losing employees to ‘poachers’, you can do a bunch of things. You can offer better salary packages with frequent increments and generous bonuses.
You may also increase the fringe benefits to your employees. You can provide your well-performing employees with company-owned vehicles, health-care, house allowance and paid vacations.
If an employee is satisfied by the offered salary and fringe benefits, it is highly unlikely that he\she would switch jobs.
Career-oriented employees prefer career opportunities over everything. They’ll only stay in a firm if they can see prospects and potential growth for themselves. They seek for opportunities to prove themselves and are looking forward to challenges. They look out for opportunities to develop themselves.
Usually, these career-oriented individuals are highly competent and hard-workers.
In order to retain these employees, you can provide them opportunities to grow. You may also test them against challenges and targets.
However, in order to genuinely satisfy the career-oriented employees, you must offer promotions and increased responsibilities to the deserving ones.
Firm’s working culture and conditions
Working conditions have a substantial impact on employees’ performance and satisfaction levels. Employees working in unpleasant environments would be the least satisfied.
Individuals usually prefer pleasant and cooperative environment. They desire excellent relationships with their co-workers and bosses.
Most individuals are also more intolerant to autocratic environment and leadership style than others. They find autocratic management discouraging, unpleasant and unfavorable to work in.
To keep your employees from leaving, you’ll have to provide them with favorable and flexible working conditions and positive working culture. You should motivate and appreciate your employees. There must be enhanced cooperation with boss and staff communicating on regular basis.
Converting to democratic leadership style and offering your employees more liberty and independence at work would also improve their performance and satisfaction levels.
Competent HR department
Employees usually keep their dismays and expectations to themselves. They barely communicate the things that make them uncomfortable and unsatisfied. An effective and efficient HR department can play a vital role in keeping your employees from leaving.
Competent HR professionals can offer advice and counseling. They can create cooperative bonds with workers, that’ll help the organization to retain their employees.
Acknowledging and appreciating your employees’ achievements is a key factor in retaining your employees.
Recognizing and acknowledging your employees’ hard work lets them know that their efforts are valued.
It is about showing them the respect and gratitude they deserve.
Employees feel happy and satisfied about their workplaces if they are recognized and rewarded for their efforts
Recognizing your employees’ achievements and efforts gives them a sense of ownership. It boosts their morale and encourages loyalty to the firm.
Recognizing your employees motivates them and creates a supportive working environment.
Employees are more likely to stay with a firm if they are involved in the decision making and target setting. Rather than using your employees as ‘production robots’ you should involve them in your planning. You must also communicate your business’s mission statements to them. The firm’s goals must also be clear and comprehensive for the employees.
This way, your employees will feel valued and will consider themselves as integral components of the business. It will raise their morals and motivate them.
All employees must be able to give the right amount of time to work and their life outside of work.
Firms, where employees have their work and personal life balanced, are likely to experience low labor turnover.
Firms can ensure work-life balance for their employees by offering them flexibility and relief.
Policies promoting diversity and equality
In this contemporary era, almost everyone is intolerant to discrimination. In order to make your employees feel safe and respected, there must be absolutely no discriminations based on gender, race, religion or origin.
Zero tolerance for discrimination will promote diversity in the workforce, which will make employees feel comfortable.
The above-mentioned factors will help you retain your employees. A low labor turnover will allow employees to settle in and adapt much quicker. It will encourage team spirit and will establish loyalty in the firm itself.