Receiving an unexpected resignation is every manager’s nightmare. Not only does it makes it challenging to find an equally talented, if not more, replacement but it also makes others in your team contemplate looking for other opportunities. Leaders and HR executives must address the causes of attrition to retain their workforce. A low employee retention rate constitutes a high employee turnover rate, which is a costly problem for companies.
An organisation’s ability to retain its employees over a period of time is referred to as its employee retention rate. It comprises several functions within an organisation, typically relating to HR policies and their efforts in engaging with their employees in order to retain them. Policies such as offering perks and benefits, a steady work-life balance, and maintaining a healthy working environment play critical roles in an employee’s decision to stay at an organisation.
An organisation’s retention rate throws light at the company’s success and ability to focus on its employees. A low employee retention rate incurs high costs to a company and makes it challenging to re-hire in tight market conditions. In addition, this not only gives an organisation a holistic view of its current workforce stability but also enables them to understand and restructure their strategies to maintain a higher employee retention rate.
When an organisation is focusing on employee retention, then it shall be fruitful in retaining the motivated and trained employees in the organisation. This will result in increased productivity and better performance in the organisation.
How to measure employee retention rate?
The procedure to measure employee retention rate within an organisation is pretty straightforward; divide the number of employees on the last day of a given time period by the number of employees on the first day. Let’s use the following example to easily explain to you the calculation of a company’s employee retention rate.
A BRH Cement – an Indian cement company – has 100 employees on the 1st of January 2019. By the end of its first fiscal quarter, the company has 105 employees, of which 10 are new hires. Across the course of the next three quarters, 25 more people were hired and as of 1st of January, 2020, BRH Cement had a strength of 125 employees.
Define The Period Of Time
Usually, employee retention rates are calculated across a period of one year; however, you can decide to calculate it for shorter periods of time as well. For the purpose of this example, we will calculate BRH Cement’s employee retention rate for the whole year
Period = 1st January 2019 – 1st January 2020
State the number of employees on the first day of the defined period
You can check the company’s payroll to find out the number of employees on this particulate date.
As mentioned in the example, BRH had 100 employees as of 1st January 2019
Total employees on the first date of the defined period = 100 employees
Determine the number of retained employees
The goal of calculating the employee retention rate is to determine the number of employees the organisation has been able to retain over the defined period of time. Hence, new hires cannot be included as part of this calculated as they will interfere with the end result.
To determine the number of retained employees, subtract the new hires from the total number of employees on the last date of the defined period. Referring to our example, BRH Cement had 125 employees at the end of the defined period (1st January 2020) and had 35 total new hires.
Total retained employees = Total employees at the end of the defined period – New hires throughout the defined period
Total retained employees = 125 – 35
Total retained employees = 90 employees
Calculate Your Employee Retention Rate
Divide the number of employees at the end of the defined period by the number of employees at the start of the defined period and multiply the result by 100 to convert it to a percentage.
Employee Retention Rate = (Total number of employees on the last date of the defined period / Total of employees at the start of the defined period) x 100
Employee Retention Rate = (90/100) x 100
BRH Cement’s Employee Retention Rate = 90%
What is the average employee retention rate in Indian companies?
There are two types of attrition in companies – voluntary and involuntary, both of which incur high costs to a company. While involuntary attrition happen when an employee is asked to leave the organisation if they are under performing or if they don’t seem fit for the role they were hired for, voluntary attrition mean when an employee chooses to step down from his role at an organisation for various reasons. Employees can choose to quit an organisation to pursue a better opportunity or to take up a better paying job or for any personal reason such as marriage or relocation.
While a good employee retention rate would be 90% or more, India has an average employee retention rate of 80-85%, which is reducing at an alarming rate.
Why does India have a seemingly low employee retention rate? According to a KPMG report, the top three reasons are:
Better Pay Elsewhere (28.1%)
Better Career Opportunity (23.4%)
Personal Reasons (19.6%)
If you are an Indian company and want to improve your employee retention, download our guide
What are some of the employee retention rate statistics?
The attrition rate in the Indian industry is alarming! In India, long-term employees who are retiring or leaving the organisation are replaced by younger employees who tend to change jobs frequently. It is not uncommon for a 20- or 30-year employee to be replaced with a millennial who tends to change jobs every two to three years. Even Generation X hops more jobs compared to the veteran/traditionalist generations.
The same KPMG report shows the retention rates across all the industries in India with the retail industry having the lowest employee retention rate at 81.5%.
Below is the industry-wise employee retention rate statistic for the financial year 2018-2019:
Retail – 81.5%
Insurance – 81.7%
Financial Services – 81.8%
Professional Services – 81.9%
Banking – 82.2%
ITeS – 84.9%
Life Sciences/ Pharma / Healthcare – 85.2%
Telecom – 85.4%
IT – 85.4%
Transport & Logistics – 86.3
Infrastructure & Real Estate – 86.7%
Consumer Goods – 87.2%
NGO/NPO – 90.8%
Energy & Natural Resources – 91.5%
Engineering & Manufacturing – 91.6%
Automotive Components – 92.1%
Automotive – 93.4%
Meanwhile, the employee retention rate at Indian startups is at a staggering 20-50%
One consistent truth across every type of worker, regardless of age, gender, ethnicity, or geography, is that compensation is king for both recruiting and retention. If you don’t pay employees fairly, they will leave—and no perk will change their mind. This is the main reason behind the attrition in the Indian industry.
With dynamic market trends, it is in an organisation’s best interest to focus on employee retention using encouraging motivated and talented employees to remain a part of the company and contribute to its success.
Losing a skilled employee is a massive setback for any organization. Though the market is brimming with talents waiting to be hired, the organization may run into losses for the investments they have to make in the recruitment and training processes. Also, there’s no guarantee that the new candidate’s skills will be on par with the previous employee. This eventually leads to high turnover rates and harms the organization’s successful run. Therefore, every company needs to have an employee retention policy that includes benefits and strategies, which ensure maximum employee satisfaction and retention. It’s one of the most crucial tasks assigned to the HR who along with the employers or managers play a major role in increasing the employee retention rate of the company.
Employee retention is a process or effort put in by employers to retain their employees for a long time. Employees tend to look out for better opportunities due to lack of appraisals or appreciation. If you look at all the multi-natural successful companies today, they all have healthy retention rates because of the perks and benefits they offer. Employees are an investment too, and to make sure they bring the best to the company; it’s essential to keep them satisfied be it monetarily or by boosting their morale. A lot of HRs believe that employee retention begins after the recruitment process or probation, but to point out the certain, the retention program begins during the recruitment process itself.
Hence, companies need to draft an employee retention policy that will benefit them and the employees in the long run. Though most of the companies have an employee retention policy in place, not necessarily all are practicing the norms as they should; therefore, the rate of turnovers is increasing. Plus, it’s a living document which means it requires occasional updates to keep up with the trends in the industry. An organization that does not adhere to the employee retention policy or with low employee retention rates is running into gallows rather than touching the targets they have for the annual year.
Now that we’ve pointed out how important an employee retention policy is, let’s dive in to know more about the policy and why companies, especially small-scaled industries need to adapt them to cut down superfluous expenditures.
What is Employee Retention Policy?
The employee retention policy is a list of policies and programs drafted by employers to ensure maximum employee satisfaction and retention. These policies include perks, benefits, investment to train the candidates, to sharpen their skills and improve the employer-employee relationship. An organization that only focuses on recruitment strategies and not retention techniques run the risk of losing these employees in the long run.
Especially small-scaled organizations that focus more on productivity not realizing that their employees are an investment too. Losing them, especially skilled ones will eventually hamper the qualitative aspects and clientele relationship of the company. Also, the retention policies are not only about employees but the employers as well. The HRs have to make sure the employers are notified about the upgrade in industry trends, and the managers are clued in about these policies to keep the satisfaction level at par. If these employee retention policies are not revisited time-to-time or updated as per trends, then they are nothing but ink on a paper.
Why does an organization need Employment Retention Policy?
Though achieving targets and yielding profits is the primary goal, the employees are also important for the organization. They are the backbone; they are the driving force who give in their time, talent and labour to produce estimated sales and returns. However, at times only compensation may not justify the motivation or appreciation they seek from the employers or their managers. Also, if the managers are unable to deduce the employee’s state of mind or unhappiness, it could lead to the loss of key talent. Hence, the reason why employee retention policy is essential and here’s why every organization needs it:
It decreases high turnover rates – A good retention policy ensures high retention and increases in employee satisfaction graph. This means the employees are less likely to leave your company. Also, it will reduce the high turnovers because there are minimal recruitment requirements and training processes to invest in.
It enhances the employer-employee relationship – The HRs ensure the managers are aware of the policies, and they advise them to maintain a cordial relationship with the employees. A good employer-employee relationship can never have setbacks considering a lot of people leave jobs because of bad bosses.
It boosts employee’s morale – An employee who feels unappreciated in the company is more likely to seek opportunities elsewhere. So naturally, boosting your employees’ morale becomes a crucial strategy to retain them for a long time.
How does the Employee Retention Policy benefit employees?
Though no employee is going to stay with the organization until the end of time, the prime idea is to retain them as long as they can. The reason being – A long-termed employee is aware of the organization’s guidelines, knows how it processes, is aware of the touch points and strategies to focus on to produce the targeted output and has built relationships with the clients.
So, losing a key talent is a huge setback for the organization, for it has to go through the recruitment processes all over again as well as invest in time and training to groom the new candidates. All in all, it an expensive procedure and to avoid these costly turnovers, several organizations are now focusing on benefits and even aligning these employee benefits with the objective of the organization. A marked shift has been witnessed in the retention strategies too, and Indian organizations are now investing large sums to not only retain but attract new talents as well.
Here are the key points that the policy touches to increase the rate of employee satisfaction –
Employee Recognition – Undefined roles and designations only lead to confusion and disappointments. Hence, HR’s advise employees to define their KRA’s not only to add clarity to their job descriptions but to make them realize that the employers are aware of their inputs in the organization’s growth. Besides this, the HR’s also advises managers to motivate the employees and guide them into new collaborations if need be.
Employee Benefits Strategies – Benefits and perks are one of the many reasons that affect employee satisfaction. There’s no hard and fast rule that there should be multiple benefits and perks to make your employees happy. Sticking to the basic ones that make their life easier and more meaningful outside the closed quarters of their cabins and work desks should seal the deal—for example, health insurance, discounts, recreational center memberships, in-house lunch services, etc.
Employee Appreciation Programs – Successful organizations are those who invest in employee engagement programs to ensure the employees are happy with their jobs. HRs are organizing more engagement-based activities, celebrating birthdays, annual parties, success parties, and sending out appreciation cards to boost morale. A happier employee means a successful organization.
Employee Inputs & Feedback – Other than staying updated on the trends, what’s matters is listening to your employees. They are on the field; they know the situation; they know where the organization is lacking or what strategies can be implemented to make working conditions better. Taking feedback and holding one-to-one meetings with employees not only enhances the employer-employee relationship but helps the HR’s or managers get an insight to concoct potential retention strategies.
Now that you know why an organization needs retention policies and how an employee can benefit from them, it is also necessary to design the employee retention policy accurately and keep it as employee-oriented as possible, while keeping the objectives of the business in mind.
An employee retention policy is different for all organizations. It depends on what the employees of the companies are seeking. As stated earlier, knowing what your employee wants, in order to deliver his best for the company is of utmost importance. Listening to your employee, appreciating the employees and making them feel a part of the company are some of the points to be focused on while aligning them with the objective of the business. In a way, the policies should not only ensure satisfaction but also motivate the employee to perform better than their previous outputs. There are several employee retention policy samples out there to guide your drafting process. Whether you are opting for something simple, fancy or creative, the following points must be focused on:
Objective – Define the objective of drafting the employee retention policy for the organization. Mention the aspects that need attention to attain this objective.
Strategies – Explain the strategies (benefits and perks) you are planning to implement to achieve the objective.
Outcome – Define the outcomes and what other gains that the organization is expecting by introducing this objective and implementing the strategies.
Measurement – How will the qualitative and quantitative outcomes of this objective be measured? Will, there be surveys sent out, will there be one-on-one meeting etc. to ensure the goal was met? All the methods and measures should be accurately defined in the plan.
Why invest in retention policies rather than recruitment strategies?
In India, the attrition rates are regrettably high, especially in the IT sectors. As per reports published in Economic Times in 2019, top IT firms like Wipro, Infosys, Cognizant are facing high turnover rates due to young and junior level employees opting to switch jobs after learning the trade of the market. Thus, most of these companies are updating their retention policies or switching to a better employee retention policy sample as well as investing more in retention techniques rather than only focusing on recruitment strategies. For example, Wipro is going all out to retain key talents by offering a retention bonus of 1 lakh. They are also promoting them to managerial and client-facing roles to learn new skills and get market exposure.
Though spending on employee benefits sounds like a costly expenditure, it’s not as expensive as the turnover rates and recruitment processes that organizations end up spending on. Also, not necessarily the new candidate will be as good as your existing or previous employee. Spending on employee benefits is no less a than gamble too, but that again depends on the employee retention policy sample that the organization has drafted to increase employee satisfaction. Let’s not forget employees are an investment. If an organization invests in them, it will eventually lead to an increase in the organization’s growth, whereas investing in recruitment strategies, no matter how good they are or how good a candidate the HR may hire, the expensive training processes and time spent does not guarantee profitable turnovers. Hence, every organization must opt to shift their focus on upgrading the retention policies rather than only investing in recruitment strategies.
Drawbacks of Employment Retention Policy
Employee Retention Policy has its setbacks too. Considering the whole process is no less than a gamble, the stakes are high since the organization is investing in the employees in the long run. It’s a testing time for HRs to point out skilled and under-skilled employees in the organization. And playing bets on the wrong card may result in a huge setback for the company. However, that does not mean that only key talents are to be vouched for retention; there may be employees who are skilled but being less productive due to lack of motivation or appreciation. Though not all employees are going to stay in the company for a long time, it’s important for the HR to scoop out skilled employees, because investing in them will help the organization in the long run.
To conclude on a fair note, employment retention policy may have its setbacks, but it’s a huge advantage for all organizations who are seeking a plan to reduce high turnover rates, attrition rates and to increase employee retention. The happier the employees are, the less likely they will leave. Hence designing an accurate retention policy that adheres to employee needs, meets the objective of the organization and increases productivity is the need of the hour for every organization in India today.
For any organization, its employees are its backbone. For the growth of the company, it is important that employees give their all. But this is only possible when employees see the company as more than just a place of work and are willing to contribute their best. Many a times, employees quit their present position in an organization because they are unhappy with the environment and culture at their workplace or the compensation being offered to them.
A company can address grievances of its employees effectively and ensure that their employees do not quit. However, this takes work and strategy which fall under the umbrella of what is known as employee retention.
Let us take you through employee retention meaning and definition first to help you understand this concept in greater detail.
Employee Retention Definition and Meaning
Let us first try and understand what employee retention is. Or what is known in Hindi as कर्मचारी प्रतिधारण.
Employee retention, in extremely simple terms, may be understood as the ability of a company or an organization to retain its employees and ensure a low turnover rate. In a broader employee retention definition, this may include strategies implemented by the company or employer to keep the employees employed in the company within a given period of time. The employee retention meaning in Hindi too remains the same: strategies that keep the employees in the company for a longer duration. Employee retention is generally attributed as a function of the Human Resources (HR) department of a company which is responsible for ensuring that the number of employees leaving the company within any given period remains low.
However, it must be made clear that employee retention only pertains to the retention of employees who contribute value to the company. Low-performing employees and top-performing employees in a company are not valued at the same level. Therefore, employee turnover is also a function of the performance of the employees.
For any company, employee retention is an extremely important factor in ensuring the growth of the company as a whole. There are several reasons which make employee retention important for a company and some of these are as follows:
Value of the employee
Employees are an asset for any organization, contributing to its growth. The longer an employee stays with a company, the more value they create for the company. Since longer serving employees are more familiar with the company’s systems, work culture, goals and targets, they are more driven towards helping the company realize its goals.
The financial cost to the company in replacing an employee
The financial cost of replacing an employee in the company adds to the costs incurred by the company in any given period. According to a 2017 study by the Work Institute, the cost of replacing a mid-level worker in a company is at least 30-40 per cent higher than the existing salary of the employee who quit. Another report by Perito mentions that the average cost of replacing an employee of India can almost be ten times as high as the salary of the replaced employee. This is because of the various costs involved in looking for a suitable candidate
which include the cost of advertising, conducting interviews, background checks, training costs, bonus and incentives to the new employee, etc.
Low turnover rates also speak for the company’s work culture, which in turn affect the employee morale. If a greater number of employees continue to quit the company frequently, it creates a negative attitude among the remaining employees. This dwindling morale also affects the productivity of the workers and the overall work of the company. On the other hand, the high retention rate of the company promotes the confidence of the
employees in the company. Employees in companies with high retention rates are more confident that the company is willing to take the necessary steps to keep their workers happy.
Boost to the company brand value
The higher the retention rate of employees in a company, the greater the boost to the brand value of the company. It creates a perception in the job market that the company values its employees and makes the company a sought after the name to work with.
Given how crucial employee retention is for an organization, measuring it through verifiable metrics is an important aspect. The calculation itself is not difficult and can be done periodically to assess the effectiveness of various initiatives taken by the organization.
The simplest formula for how to measure employee retention rate requires the division of the total number of employees who quit the organization during a given period by the total number of employees at the end of the same period. The percentage obtained is an effective employee retention rate.
Let us understand this with an example. Say an organization has 100 employees in the first quarter (Q1). In the same quarter, seven employees leave the organization. Then, the employee retention rate will be calculated as follows:
Employee Retention Rate = Total number of employees – Number of employees who quit
Total number of employees = 100, Employees who quit = 17
The Data Set
The first step towards calculating employee retention is collating the data. For this, there are two methods. One is the regular collection of data about all employees who join the company as well as employees who leave the company. The other method is to go through the records of the company for the period for which the employee retention rate is to be calculated.
A complication in the data collection for the calculation of the employee retention rate arises from the change in roles of employees. If the calculation is to be made department-wise within the company, for the same employee to have changed roles within the company creates a duplication. In such a case, only the last held position of the employee is to be taken into account as this provides accuracy to the calculation.
How to improve employee morale and retention
Improving employee retention rates is always a challenge for companies, and it is an important one for the growth of the company. Employees leave companies for a variety of reasons and dissatisfaction with their salary is just one of these. This is why it is important that companies work towards understanding the reasons which push their employees to the brink of considering quitting their jobs. Working on these will reduce the turnover rates and improve the employee morale, which in turn will go a long way in boosting the employee retention for any organization as well. Here are some tips on how to improve employee morale and retention:
Communication gaps between the employees and the employers can significantly affect employee morale and also whether employees want to stay on in the company or quit. Allow employees to express their opinions on work-related issues with frankness so that any grievances or miscommunication can be addressed at the beginning. Pass information clearly and create a work culture where junior employees are not hesitant to approach their seniors to ask for clarifications or more information. If there are any grievances from either
side, they must be addressed clearly. Clear communication, ethical behaviour, and positive work conditions go a long way in improving employee morale and hence, the retention rates.
Work towards ideal salaries and perks
In the 2019 Randstad Employer Brand Research report, it was found that 33% of the respondent employees left their jobs due to inadequate compensation. When workers feel that they are not being paid in proportion to the contribution they are making to the organization, they are bound to feel dissatisfied. Appraisals and reviews not resulting in salary increments as expected by the employees also contributes to this feeling. A structured
system of periodic performance-based or tenure-based salary increments is an effective way for organizations to boost employee retention. At the same time, perks and annual bonuses create attractive incentives for the employees to stay in the company over the long term instead of considering a job change.
Create a flexible work environment
Flexible work environments are excellent morale boosters. Be understanding of the requirements of your employees. Rather than enforcing office timings, if an employee seeks to work from home on account of pressing circumstances, allow them to do so. In the recent coronavirus outbreak, major private sector companies in India allowed their employees to work from home to prevent the spread of the disease. This is an apt example of companies taking the extra step to protect their employees which the latter will surely appreciate.
When people work together as a team, it creates bonding and. A culture of collaboration and cooperation results in a healthy work environment where workers are happier and more satisfied with their work. Apart from teamwork within the office, also organize group outings such as a picnic or a tennis match where colleagues can get together and socialize and feel a greater affinity towards each other as well as towards the organization.
Acknowledge and reward achievements and milestones
Everyone craves appreciation for a job well done, and it is the same for the employees in a company too. Reward employees for targets achieved not just to encourage then but also to encourage the other employees to emulate the achievements of their colleagues, An even a better way would be to incorporate a system in place where achieved milestones, such as achievement of targets or completion of a specific number of years in service automatically qualifies an employee for promotion or a salary increment.
Clearly, employee retention is an aspect every company must pay more attention to. The more willing employees are to stay on in the company, the greater their contribution will be towards the growth of the company. Regardless of their size, companies must seek to ensure that they take the necessary steps to hold on to the value-contributing employees. There will be some turnover, but a lower rate is in the larger interest of the company in the long run.
The corporate doesn’t operate the same way it used to anymore. The rule of the law that used to govern the corporate has changed. There are certain factors that have contributed immensely to these changes. Some of which include the complete overhaul of the technological landscape, exciting and sometimes borderline strange employee demands, and societal expectations among others.
As a business in the corporate world, you know how important employees are and how important it is to keep them happy and content. However, this is easier said than done. Employee retention in India is not easy, more so because we have so many startups that are backed by renowned investors springing up every other day. So, in order to retain your employees, you need to first listen to them. You need to show them that you want them to continue working with you. You need to take them into confidence that you are willing to do everything to keep them. But, there are not many companies in India that are ready to go that extra mile. They don’t understand how important employee retention is to their long-term success. No wonder a lot of businesses have to shut their doors even before they start to find their footing.
All is still not lost. There are ways that can help businesses in turning the tide in their favour. The biggest thing that businesses need to show is that they value their employees and that they are ready to do everything that is required to reward them. Best companies are those that don’t give their employees any reason to look elsewhere. If you are willing to respond to your employee demands, those that are justified, you will have little problem in retaining them. You need to understand that no employee wants to leave a good employer. It is only when an employer pays no heed to heed to an employee’s demands that they start looking out for other opportunities.
You can’t get caught off guard as an employer. You need to always stay ahead of the trends. Let us now set the context straight. Let’s put before you employee retention trends and statistics that will help you better understand your workforce perception and come up with an actionable plan to not let your performers drift away.
What are some employee retention facts you should know?
The things you need to do to keep great employees or stop that from leaving can be unsolved mysteries if you are not aware of your company work culture, or if you are still building on your business. We are going to put before you a few surprising facts and then discuss employee retention analytics based on those.
Forbes studied a number of surveys done recently in India to understand employee retention KPIs. What it found out was unexpected, to say the least. The cumulative study of these surveys revealed that over 50% of Indian employees are considering leaving their jobs. Out of these, more than 65% of the employees belonged to the below 25 years age bracket. These figures aren’t too promising in today’s India where the startup revolution is at its peak. Now, startups are looking for young talents, but only those that are willing to stick with them for a few years. And well, they have their work cut out. Investors don’t put money on businesses that see high attrition.
HireRight published its India Employment Screening Benchmark Report 2018 to give employers valuable insights into how employee retention works. The report featured a survey that gained inputs from 6,000 HR professionals. We are only going to talk about the biggest takeaways of this report here. 85% of Indian organizations were considering hiring more people. This figure for the entire APAC region was 77%. So, Indian companies seemed more intent on freshening up their teams than their counterparts in the Asia Pacific region. Another important finding was related to hiring expectation and employee retention. Nearly half of the companies that were spoken to during the surveys pointed towards investing more money in retaining their staff. This figure is more than double of what it was when the survey was last conducted in 2017.
Finding a fitting replacement for an existing employee that could leave you is a big investment, both in terms of cost and time. A lot of time and money goes into finding the right talent for your needs. You need to advertise vacancies, get in touch with recruitment agencies, screen and interview the candidates, and then finally hire a candidate. Onboarding is another important part of the process. A study by Employee Benefits News reveals that when a company loses an employee, it bears a loss that is equivalent to nearly one-third of that employee’s annual salary. So, when an employee leaves you, it isn’t just a resource that you no more have access to, it is as much the cost associated with it. The easiest way to do away with these concerns is to retain your employees by providing them enough reasons to stay loyal.
Employees that perform want to be recognised for their efforts. If they aren’t recognised or rewarded, they are highly likely to look out for a new job. According to data released by TINYpulse, only 12.4% of employees that are recognised for their efforts start looking for a job whereas 21.5% of employees that aren’t recognised prefer switching their job to a better option than continuing in their current company. If employees get validation for their work, they are more than willing to stay. Employees that are appreciated by their managers are far more likely to continue with a company than ones that are seldom acknowledged. Similarly, employees who are assisted by their managers in managing their workload are more likely to stay. According to TINYpulse, only 13% of employees who receive regular recognition from their managers look for a change in employer. The figure stands at 24% for the employees who think they don’t receive recognition regularly enough from their managers.
Employers that don’t pay too attention to the work-life balance of their employees, pay the ultimate price by losing them. It has been found that employees that value their personal life as much as they value their professional life are likely to stay with a company that helps them in maintaining this balance. In a study conducted by Kronos, it was revealed that 95% of HR leaders agree to the fact that employee burnout is seriously hampering retention. Whether or not they are allowed to work remotely on some days or in certain situations and whether or not their work hours are flexible are factors that employees consider when choosing to stay or move on. Let your employees maintain a work-life balance and focus as much on their personal lives as they do on their professional lives. You will start seeing great results very soon.
Employers that empower their employees give them another reason to stay. According to TINYpulse, employees who have complete control of their professional careers have a 20% higher chance of staying with their existing company. Employees that are clear about the direction their career is taking, and are aware of the support and guidance from their leadership, are more loyal.
Employee retention trends in different companies
Well, you need to understand that there is a lot common between employee retention and being a company that everyone wants to work for. Let’s take a look at some companies that have done really well in keeping employees happy. Future Magazine named Google as the best company to work for, again. It is the sixth consecutive year that Google has topped this list. Its attrition rates are not as high considering the huge size of its human capital.
So, what does Google or Facebook for that matter do to keep employees happy? They employ a set of straightforward strategies to not let their employees run out of the door, if you like. One of the things that hiring managers at Google or Facebook do is take their time when hiring a candidate for a role. A big reason that people want to leave your company is because they don’t fit the job profile or role. Hiring done in haste often leads to repeated training and manager-employee frustration among other things.
It is very important to have a hiring plan in place that mentions the required qualification, skill set, experience, and other things that a hiring manager needs to look for before giving a candidate a heads-up. Google posts about 5,000 jobs every year. Over two million candidates apply for these. However, Google gets its hiring right every time of asking because it follows an exhaustive recruitment process.
How do companies use employee retention analytics to improve retention rates?
Let’s take you back to the first quarter of FY 2019-2020 and see what top IT companies had posted regarding their attrition rates in that period. Cognizant reported a jump of 4% from 19% in the last quarter of the previous financial year. Infosys reported an increase of 3 % from its attrition rate of 20.4% in the period from January-March 2019. Wipro did comparatively better than its counterparts in this regard. Its attrition rate saw a jump of only 1% in the last 1-1.5 years. What did Wipro do that the others couldn’t?
This is what data analysis and employee retention all about. You work on the previous data and try to bring in reforms to make your employees stay. So what Wipro did was it brought out certain initiatives to reward performing employees. At the same time, it started reskilling its employees. It had learnt its lessons. That’s why it gave its junior level employees a retention bonus of Rs.1 lakh. That’s how it was able to retain its employees. It wasn’t doing as well in terms of retention about 18 months from when these figures were reported in the first quarter of FY 2019-2020.
This is what Ayaskant Sarangi, Senior VP (HR), Wipro had to say about these employee retention efforts, “We recognize the contribution of high performers by offering them better opportunities and substantially higher increases. They are rewarded with promotions and managerial roles where they are entrusted with team-leading responsibilities. We also offer them opportunities in client-facing roles.”
Infosys is also learning to make better use of employee retention analytics after the period of its well-documented struggle with keeping employees. According to Salil Parekh, CEO and MD, Infosys, the company has formed a task force, which will be working under COO, Pravin Rao, to turn its retention situation around. The task force will be responsible for preparing a list of actions, which will be put to work in the next few quarters.
Cognizant also learnt from its mistakes and was quick to make amends by setting up a transformation office for reviewing factors that can help them in improving upon their employee retention rates. It has upskilled and reskilled nearly 150,000 employees in the last year or so. It also released retention rewards worth $48 million to not allow great talent to leave.
Many companies pay all the attention to their bottom line, in order to maximise their growth. However, there are other things as well that need as much attention, if not more. These companies need to realise that the most important asset of their businesses are their employees. Employees that work with all honesty to achieve the goals set by a company can ensure long-term success. So, need to focus on employing employee-first approaches to retain their best resources.
Breaking all the stereotypes of age as a barrier, millennials are outperforming their previous generations. Millennials, known for being bright and adaptive, are changing the corporate culture, and building up a new society full of practical values.
Who are millennial’s?
Millennial’s or so-called the net generation is the individuals who reached adulthood around the turn of the 21st century. According to Newsweek magazine, the millennial’s were born between 1977 to 1994.
Millennial’s are also named as “echo boomers” due to high surge in the birth rate during the 1980’s and the 1990’s. They are best defined as the generation that has seen the birth of technology and has seen the world emerging out of the great recession of 2008.
The research from the Pew Research Center showed millennial’s are more confident, connected, and open to change in comparison to the previous generations.
Is hiring millennial’s a challenge?
No. Millennial’s are no different than humans, but here are few things you need to take care of when hiring millennial’s in the workplace.
#1 Professional Job Offers
When you reach out to millennial’s to offer a job, don’t just give them a list of duties and responsibilities. Millennial’s don’t like bossy attitude they prefer someone who respect their ideas. So, talk about concrete reasons why you chose them in particular and perhaps give them a ballpark salary range as well.
#2 Flexible Work Arrangements
Millennial’s place a high premium on the ability to work from home. According to a survey by Global Workplace Analytics, one third of the surveyed employees preferred telecommuting option over a pay raise. The increasing trend of remote working has been a successful way of employee retention and employee stress management.
#3 Feedback is Important
The LinkedIn’s Talent Trends Report showed, a 95 percent of millennial’s want to hear the feedback about them after the interview. This seems to be a useless effort to follow up on applicants that have been rejected, but they need the feedback so they can improve for future interviews and, perhaps, when the come back to your company so you can make use of their improved skills and knowledge.
#4 Tech genius
Millennial’s are more savvy with internet and emails. While they like keeping chats informal and casual but friendly. Don’t be hesitated of sending text messages instead of emails or formal letters. However, being more flexible and modern will win hearts of millennnial’s.
Millennial’s grew up with more technology than any other generation. Smartphones, social media, texting, email, IM, you name it. That’s how they’re accustomed to communicating, so become proficient in these areas, as well.
With each passing day, Millennial’s contribute a bigger percentage of the overall working class. A 2016 study by the Brookings Institute showed, Millennial’s will comprise more than one of three adult Americans by 2020 and 75% of the workforce by 2025. Clearly, they are not going away. They’ve only just arrived.
The better that you engage them during the hiring process, the better you’ll be able to retain them as employees.
Tips for hiring millennial’s
No hiring millennial’s is not like preparing for civil exam that you need tips to crack, but yes keeping points in mind would attract young and creative mind. These strategies for hiring millennial’s will be an asset for your growing firm.
#1 Set goals
Demonstrate quickly how Millennial’s can make a significant contribution to the job while they’re there, particularly if you can attach some level of social impact or purpose to the job.
If you want to keep people there past one or two years, show how they can make a solid contribution to the job using what they know. Show how what they do can make a financial impact on the company, or a social impact on the community or another stakeholder.
#2 Opportunities for growth
No one wants promotion right after their first day at work, but showing them the opportunities they grow up to can really bring energy in the employees work.
The human desire for growth is perhaps manifested most in the realm of career. Millennial’s care most about the ability to learn and grow as a professional and an individual. Cater to that human desire we all share and see the challenges of hiring millennial’s vanishing away. Offer your employees opportunities for growth at work, and watch your employee engagement and retention grow, too.
#3 Opinion matters
Experiencing the generational gap in opinions at work is not a new thing, but respect others opinion, take them into consideration. Intolerance seems to be the buzzword of the month. But dealing with different views and opinions while still keeping your cool is the mark of a good colleague.
A ‘my-way-or-the-highway’ approach will not get you far up the corporate ladder. Disagreement should never be mistaken for disrespect. People are allowed to disagree with each other, but that doesn’t mean that respect needs to go out the window too.
Soft skills to identify in millennial’s
Millennial’s living in the era of technology are full of wider knowledge and have groomed their personality better than other generations. While you hire millennial’s you experience the wider variety of self groomed soft skills. As a best practice for recruiting millennial’s, it is important that you check those qualities during interview to help you understand the employee better.
#1 Eye contact
Eye contact reflects the confidence of an employee sitting in front of you. In this fast paced world confidence is important to out show your skills. Eye contact should be casual, so it’s okay to have short breaks in contact every now and then, so long as they reconnect with you, especially when you’re talking. That’s a good sign of active listening.
Interrupting a person is often a sign of poor communication skills. Of course, if a candidate keeps talking and talking, you may have to interrupt. Also not a good sign.
#3 Leadership Skills
While millennial’s may not have the desired management experience you would look for in a leader, there are other ways to identify an emerging leader in the hiring process.
If they took initiative, whether they took ownership of their work, how passionate they felt about the project, if they seemed to work well with others, and if they accomplished a successful result.
#4 Critical Thinking
It’s one thing to know that an employee can carry out their responsibilities under normal circumstances, but you also need to feel confident in their ability to perform under pressure.
How they identify challenges, think on their feet, and analyze a complex situation. If they can’t articulate their thought process or sought direction from a 3rd party, they may not be the self-starter that you need in a critical situation.
Do’s and Don’ts while hiring millennial’s
While every generation has a different agenda and motivation, which can sometimes be hard to manage and maintain equality, its important to keep these points in mind while hiring millennial’s.
#1 Emphasize on job stability
Millennial’s have been shown in the light of job hoppers, however, proving it wrong, a study by Deloitte found that millennial’s are willing to stay longer than five years at work.
Millennial’s, expect personal growth, salary, and perks other than job stability. Employers, while hiring, need to build up trust in employees about job stability and healthy work-life balance.
#2 Highlight the opportunity to learn and grow
Everyone wants to learn new things and grow in life. In order to engage people in your business model, you need to know what drives them. So once you have an idea of what can get your employee out of the bed every morning, then yes you have mastered the act of a great employer and you can tailor your communication in a way that resonates with them.
Around 87% per cent of the millennial’s care about career development when evaluating a job, Gallop’s Millennial workforce study showed.
#3 Help settling into the company culture
It’s important to help every new hire settle into your culturally different workplace. A Glassdoor hiring study showed, 80% of millennial’s look for people and culture fit with a new employer.
Work culture is one of the top five considerations for job seekers of all generations while choosing a company. Failing to infuse this culture throughout your hiring process can make you lose many top candidates.
A cohesive work culture attracts the employees towards the organization. Take the opportunity to explore ways of improving work culture and show people what your company culture is like.
#4 Frame millennial-friendly job descriptions
What is a millennial-friendly job description? Well, do you use the same job description for an executive position that you use for a managerial position? No? Exactly the same way, every generation has different expectations from their workplace.
Millennial’s view the company’s benefits package as a key job evaluating factor and when they don’t find the benefits that matter to them, they’re quick to dismiss the job. It’s important to keep healthcare, flexible schedule, student loan repayment, and other personality development benefits in mind while taking millennial’s into consideration.
It is important to pay attention to the benefits packages because when millennial’s get similar offers, these benefits determine the offer they choose. Remember, even the smallest perk can go a long way. A study on PSI online found that the perks and benefits many millennial’s want are inexpensive and sometimes even free.
#5 Unstructured hiring process
Recruitment is a process that everyone should take seriously. Not only because you cannot afford to hire an unqualified or incompetent employee, but also because your hiring process gives a sense to the job-seeker how mismanaged your firm is. This can result in a highly qualified and potential employee turning down your job offer.
Don’t conduct a disoriented recruitment process, distribute roles accordingly for each interviewer and let everyone be ready for their roles.
Everyone makes mistakes at some point, but preparing for it from the start won’t leave anyone embarrassed. A planned execution portrays an organized image of the company and makes the job seeker feel valued giving his time.
Key takeaways for hiring millennial’s
Know the goals of the candidate before hiring.
Drive them through your work culture.
Explain them their duties.
Take their input and give feedback.
Set goals and show the opportunity for growth.
Gain trust with job stability.
The structure of the hiring process is important.
Millennial’s are a great generation of creative people. Every organization wants to hire the right candidates, discussed above are the dos and don’ts you must take care of at all cost when hiring a millennial candidate.
Millennial’s are multi-tasker’s who can do so much beyond their abilities when tested. It is important to enabling them to learn and give them challenging projects to keep them engaged.
Employees are the most valuable and intangible assets for any organization. In today’s highly competitive world, the human assets of a company are what distinguishes it from its competitors. The growth of an organization depends upon the contribution of its employees. The organizational goals can only be achieved when the employees are dedicated and work productively towards achieving their goals. When an employee joins a company, the organization invests a lot of time, efforts and money to train and nurture the employee. If a trained employee leaves, the organization is at a considerable loss. So, every organization has its employee retention strategies and policies in place to prevent experienced, trained and veteran employees from leaving.Employees can be termed as the lifeline of an organization and their contribution is of utmost importance for the growth of an organization. The organizational goals of an organization can be achieved only when the employees of the organization are serious about the goals and contribute efficiently.When an employee joins an organization a lot of effort, time and money are invested in grooming the employee and the organization would be in a situation of loss if the employee leaves the organization after being trained.
So, every organization has its policies by which it can prohibit it’s fully trained and groomed employees from leaving the organization. These policies are referred to as Employee retention.
What is Employee Retention?
Employee retention is defined as the ability of any organization to keep its employees and maintain a lower turnover and attrition rate. In other words, employee retention refers to different strategies to reduce employee absenteeism and enhance retention.
Employee retention is quite important for an organization as there are certain benefits for the organization associated with the focus on employee retention. When an employee stays for a longer time with an organization, then he is an efficient contributor to the organization. If this employee leaves and joins the organization of a competitor, it is a huge loss as this will be of benefit to the competitor now.
When an organization is focusing on employee retention, then it shall be successful in retaining the motivated and trained employees in the organization. This will result in increased productivity and better performance in the organization.
There are various reasons for which an employee can leave the organization. Some of the major reasons for which your employees will leave your organization are mentioned below.
1. Lack of employee engagement
Employee engagement is quite necessary at workplaces today. If your employees feel they are not involved in the process of achieving the organizational goals, their work or contributions are not valued enough in the organization, the organizational goals are different from their goals; they might feel disengaged. This can become a major reason for your employees leaving your organization.
2. Lack of growth opportunities
Every employee aims at learning new skills, expanding their skill sets regularly and then using these skills for obtaining growth opportunities. If your employees do not get the opportunity for growth and there is a lack of opportunities for their skills development, then they will decide to leave the organization and look for better opportunities outside.
3. Work-life imbalance
The work-life imbalance is one of the major causes for many of your employees leaving the organization. If your employees do not get adequate time for their personal lives and families due to being overburdened with work then it is quite obvious for them to quit the organization. When your employees are working for long duration even on weekends or traveling constantly for work-related activities, it is quite evident for them to be exhausted and look about for other better options outside.
4. Lack of satisfactory raises and promotions
When your employees have a feeling in their minds that the pay raise which the organization is offering them is not adequate in return for the efforts they have put in; they think about quitting the organization. Moreover, many employees also feel they are not being offered proper promotion according to their expectations which can make them think about finding other opportunities outside.
5. Lack of coordination with peers
This is quite common in every organization and a major cause for employees leaving their current organizations. It might be a larger team or a smaller one; anger issues, ego clashes, back-biting, jealousy, retaliation, favoritism, etc. are some of the negative vibes which can compel an employee to leave the organization and look for better opportunities.
6. Bad manager
It is a very common saying that ‘Good employees do not leave an organization, they leave managers’. This is a very true and important reason why your employees might be leaving your organization. If the people skills of the managers in your organization are very poor, they are rude or sarcastic to the team members, do not provide growth opportunities to team members, do not support the team members or play favoritism within the team; in such cases, the employees are quite determined to leave the organization.
7. Unhealthy work culture and rigid workplace policies
The overall work culture of your organization and the policies associated with your organization can be another factor leading to an employee leaving your organization. Mostly, employees look for a work environment that is quite healthy, the managers are friendly and easily accessible, communication is clear and transparent, employees are treated with respect, and employees have flexibility when it comes to deliverable and time of delivery, etc. When the workplace environment is not suitable for your employees, they feel like quitting the organization.
8. No recognition or appreciation
If the hard work put in by your employees is neither appreciated by their managers nor their efforts are recognized; they gradually start feeling demotivated and lose the interest to work hard for the organization. This is when they start looking for other opportunities outside the organization.
9. Bored with lack of challenging work
Many top employees might feel that the work they are doing is stereotypical and boring. Being highly skilled, they might be expecting a challenging and interesting work that they are not able to receive in the organization. So, they lack motivation and resort to leaving the organization.
10. Lack of independence in decision making
This is a common cause in many organizations where the employees do not have the independence of taking major decisions related to work. This usually happens in a large team where the decision making power rests with the senior managers. It is quite obvious for the other team members to feel disengaged and demotivated.
What is an employee retention strategy?
An employee retention strategy refers to the various techniques and policies employed by the management and HR department of a company to help employees stay with the organization for a more extended period. Implementing successful employee retention strategies go a long way in keeping the employees motivated so that they stick to their current organization and contribute effectively towards its growth.
Objectives of employee retention strategies
Although employee retention strategies may differ from one business to another, the core objectives of all of them are the same.
The objectives of employee retention strategies are as follows:
Fostering holistic employee development.
To keep both stakeholders happy, i.e. employees as well as the employer.
To understand the concerns of the employees and work towards resolving them.
To make the work culture attractive and encourage top talents to stay with the organization.
To offer small perks and financial rewards to employees.
To respect and appreciate employees for their valuable contributions to the organization.
To facilitate transparent communication between employees and management.
To communicate with the employees about what is expected of them.
To promote healthy competition in the workplace.
Top 5 reasons to retain your best employees
As said earlier, employees are the lifeline of an organization and the top-performing employees are the major assets of an organization. Your organization invests a huge amount of time and money in training the employees and grooming them. But, usually, employees after having gained training and work experience tend to move out to other organizations for better growth prospects, benefits, ambiance, etc. This stands as a huge loss to your organization and so, it becomes quite necessary for you to focus on retaining the talented and top-performing employees.
The major reasons why it makes sense to retain the top-performing employees in the organization can be listed below.
1. Recruitment of the right employee with the perfect skill set is a difficult task
Recruiting a new employee who is hard-working and even a top-performer is a difficult process. The HR has to shortlist a few profiles from a large pool, carry out interviews, negotiate with the candidates, look after other formalities while joining, etc. Then again, the new hire has to be trained and groomed to cope up with the organization’s policy. This is a long and inconvenient process which makes retaining talented employees quite important for an organization.
2. Training is time consuming and expensive
Grooming and training the employees involves a lot of effort, time and money to be invested by your organization. After your employees become proficient and start performing quite well, if they plan for leaving your organization then it would be a huge loss for your organization. In such a case, you will have to put in efforts to retain your top-performing employees to avoid incurring such losses.
3. De-motivation of other employees
When your top-performing employees leave your organization, it is quite evident that they will look forward to opportunities with your competitor and join them. This will be a loss for your organization. There are many incidents even in which the past employees reveal certain information, statistics, and secrets related to the organization in front of the competitors. So, this can be avoided if you retain your talented employees in your organization and even make strict policies for non-sharing of any information with other organizations even when your employees leave your organization.
4. Performance takes time to reach its peak
Even if you hire new employees in place of your top-performing employees, they will take some time to be trained, understand your organization’s work culture and perform at the same level as that of your past top-performing employees. So, this will be a loss in disguise for your organization and can be avoided by retaining the top employees of your organization.
5. Talent attracts ideas
Moreover, it is the need of every organization to have some talented and top-performing employees who can bring some new creative and different ideas. It would be difficult if all the top-performing employees of an organization quit the organization. So, it becomes essential to retaining the top-performing employees of the organization.
Top 9 employee retention strategies
Let us list down some of the important employee retention strategies by which you can retain your employees with your organization.
1. Show your employees the benefits
As said earlier, money is one of the important factors which cause an employee to leave the organization. When your employees are not satisfied with the money you are paying them, they will look for opportunities in other organizations.
You need to understand that money is one of the best motivations to keep your employees intact in your organization. You should offer fair and adequate appraisal to your employees. If the appraisal obtained is satisfactory, your employees are satisfied and would remain with your organization. You can also implement other methods to monetarily reward your employees such as benefits from insurance, investment options into stocks, etc. This employee retention technique will make your employees feel satisfied and hence they are retained in the organization for long.
2. Career Path: Provisions for growth of employees
Mostly, every employee has an aspiration to learn new skills and have a career growth. They keep on looking for these opportunities and if these are not available with your organization, they tend to leave your organization and join new ones.
To retain your employees, you should encourage them to learn new skills and growth career-wise. Various training programs like online training, classroom sessions can help your employees learn new skills and feel satisfied. You should encourage your employees for cross-functional training as this will help develop new skills and can open up opportunities for bigger roles within the organization.
3. Obtain a head start by right recruitment from the beginning
You need to hire the right people from the beginning itself. This is feasible when you ask them in detail about their passion and aspirations. During the hiring process, you can elaborately discuss with the candidate about his accomplishments, why he wants to get into that particular role within your organization, his strengths, and weaknesses, his career plans, etc. With these discussions, you can very well know about his work tenure with you and then you can determine about his training, grooming plans.
4. Create a favorable and encouraging work environment
Workplace environment and the organizational work culture are two major factors which your employees can consider as a cause for leaving your organization. The work environment of your organization should be friendly and your employees should not feel stressed before coming to the office. Open communication, fair behavior, supportive management, strong ethics, etc. are some of the features which your employees will seek at the workplace. If they are provided with this type of favorable work environment, then they will remain with your organization for a longer duration.
5. Help your employees maintain a healthy work-life balance
In today’s world which is highly competitive, every person is struggling hard to maintain a work-life balance. Your employees have a life outside the workplace even and you as an employer should understand and respect this. If your employees are always overburdened and stressed due to work then they would gradually lose their interest and start looking for other opportunities outside.
You should understand that the personal space of your employees should be respected. Allowing your employees to take off from work, vacations, work from home provisions, leaving early on special occasions, etc. can help them maintain their work-life balance and stay with you longer.
6. Create and retain good managers in your organization to have good employees
As said earlier, people do not quit organizations; they quit managers. Good managers are a necessity in every organization. When managers are good, friendly, communicative and supportive people will want to work with them for longer.
You should ensure that the managers in your organization do not just understand technicalities but also understand people’s skills. They should know how to understand the problems of those reporting to them, motivate them, encourage them for their career growth, communicate with them and support them whenever needed. This will help your organization in retaining its employees for longer.
7. Promote the company’s rewards and recognition programs
This is very necessary at the workplace and its absence is one of the main causes behind attrition. Many employees feel that their efforts and hard work for achieving the goals are neither recognized nor appreciated. They lose the motivation to work harder and put in their efforts. This leads to attrition in the long run.
Your employees should be made very clear about their responsibilities, their goals and they should be appreciated for their efforts. Nothing can be more motivating than obtaining rewards for the hard work done. You can introduce rewards like ‘the extra mile’ award, ‘project star’ award, ‘pat on the back’ award, etc. for your employees to make them feel motivated. This can act as an excellent employee retention technique.
8. Create an environment where your employees have the freedom to share their opinions freely
Many employees will have several problems and issues within the organization. But there are very few who get the opportunity and the platform to share their opinions and speak about their problems. This accumulates a lot of resentment in the minds of employees even while they are leaving the organization.
Your organization should have such trustworthy forums or platforms where your employees can express their views, opinions and speak about their issues related to any topic within the organization. This would help them in finding a solution to their problems.
9. Create a healthy bonding at workplace
Workplaces are formal places and every person is concerned about his task. The communication happening at workplaces are also quite formal. You should try to make initiatives for making your employees friendly with each other. Cricket matches, pot luck lunch, team outings, etc. are some of the methods by which your employees can start bonding with each other personally and feel happy when they are at their workplace.
According to Forbes, 54 per cent of Indian workers are seriously considering quitting their jobs, with 66 per cent of them in the age group of 16-24 years. For most Indian companies, hiring fresh talent is comfortable, but retaining experienced and seasoned employees is a daunting task.
Here are some of the best employee retention strategies in Indian companies:
1) Hiring the best fit for the organization
Successful employee retention begins during the recruitment stage. While interviewing and hiring a candidate, it is crucial to analyze if he/she would fit into the company culture. In addition to knowledge and skills, the candidate’s attitude and nature should be aligned with the company culture and values. Focusing on this aspect would lead to a lower attrition rate moving forward.
2) Offering employees the right paycheck
Any organization needs to honor employees with adequate remuneration for the services provided by them. The compensation provided to them should match with the responsibilities they shoulder. Salary is one of the top reasons why employees look for a change. Hence, businesses need to share their growth with the employees as well.
3) Providing a top-notch working environment
Work environment and work culture are the top reasons why employees are looking to make a shift. Providing a great work environment requires more creativity and less money. Most employees spend a large part of the day at their workplace. Hence, it is crucial to foster a fun and positive work environment. A healthy work environment would lead to a healthy workforce. The work environment offered by some of the top companies like Google, Amazon, Microsoft, Apple and many others is effective employee retention strategies in itself.
4) Work-Life balance
Employees too are humans. Hence, there is a need for a good work-life balance in order to maintain a balance between work and personal life. One such means adopted by many companies is a flexible work schedule. It enables employees to complete the task on time without compromising on their commitments. Work from home paid family vacation, maternity leaves and paternity leaves are some effective means to keep employees cheerful and productive. Work-Life balance promotes creative thinking among employees and enables them to come up with innovative ideas.
5) Training and development\
Most organizations in India keep themselves up-to-date with the latest technologies and changes happening around the world. Accordingly, these organizations train the employees. Training and development is a crucial aspect of any organization as it helps to improve the productivity and efficiency of the whole work-space. It teaches a positive attitude among employees.
6) Transparent and open communication
A transparent and open form of communication in the organization instills a sense of value among the employees. Employees feel motivated that their ideas and opinions are being heard and they belong to the organization. Hence, it is vital to have open discussions in the organization between employees and top management so that their voice can be heard. Open discussions empower employees to share their views and perspectives about the company.
Employee retention strategies in Infosys
Infosys is an Indian IT giant and one of the leading companies for employees to work with. Here are some key facts about Infosys:
The employee strength of Infosys grew by 11.77 % in FY 19.
In FY 2018-19, Infosys added 24,016 employees.
At the end of FY 19, the attrition rate of Infosys stood at 20.4 %.
Some of the employee retention strategies of Infosys to keep a check on the attrition rate are as follows:
A quarterly promotion cycle for employees.
Increased timely payment and variable payout.
Creating career architecture programmes.
Launch of a career movement programme named Pathfinder.
Various employee engagement initiatives.
Infosys Leadership Institute (ILI) for grooming and nurturing future leaders in the company.
Implementation of digital skill tags, where employees can acquire new skill sets and get a certification and skill tag for themselves.
Early career rewards programme to provide new employees clarity about their growth path within the company in the first few years itself.
Bridge programmes enable employees to pick up alternative skills which result in higher compensation.
Employee retention strategies in TCS
TCS is yet another heavyweight in the Indian IT industry. Here are some critical facts about TCS:
The attrition rate in TCS remained one of the best in the IT industry and has stood at 11.3 % in the last year.
In FY 11, the employee strength in TCS grew by 23.8 per cent.
TCS adds about 28,052 employees every fiscal.
Various employee retention strategies used by TCS to limit the attrition rate are as follows:
Developing new skills in employees.
Rotating people from project to project
Providing a vibrant and enriching workplace to employees
Continually upgrading the technology skills of employees
Maternity and Paternity leaves
Yearly retention bonus for employees
Healthcare and insurance cover for employees and their families.
Sporting and fitness activities
Fit4life programme to motivate employees to take care of their fitness
Purpose4life programme to ensure social as well as the mental well-being of employees.
Employee retention strategies in Reliance
Yet another stalwart in the list of Indian companies is Reliance Industries.
Let us have a look at the various employee retention techniques in Reliance.
The Step-up programme assists an employee to grow within the same function. Under this programme, an employee is mentored so that he/she can reach the next level quickly.
Flexible work timings for employees.
A focus on Work-Life balance.
Access to various sporting facilities like cricket stadium, a football and basketball ground
A canteen offering 16 different cuisines
Families of employees are welcome inside the campus on weekends.
World-class facilities and services like hypermarkets, bank branches, gymnasium, round-the-clock medical centre and many more.
Bring Your Family to Work – An annual engagement initiative for employees and their families.
Reliance Family Day – Celebrating the spirit of togetherness of employees with their families. This includes a host of indoor and outdoor engagement activities for employees and their families.
Career Acceleration Programme (CAP) – Empowering employees to chart their career growth by changing their business functions after taking a series of tests and interviews.
Employee retention strategies in the Tata group
Some of the best employee retention ideas followed in the Tata group are:
Tata Quality of Life (TQoL) framework to ensure happiness at the workplace.
Extended long leaves for paternity and maternity breaks.
Childcare assistance through childcare centres.
Partial reimbursement of daycare expenses.
Flexible employment options including work from home.
Numerous employee engagement sessions.
Employee retention strategies for sales employees
Sales are the most vital function for any organization to grow. Highly skilled sales employees are one of the most valuable assets of any organization. Hence, it is crucial for businesses to retain talented and experienced sales employees. Some of the best employee retention ideas for sales employees are:
1) Providing better sales incentives
Providing higher sales incentives to the sales team is an effective way to retain sales employees. These incentives may be in the form of gift vouchers, discount coupons, movie tickets, tickets of sporting events or music concerts, weekend getaways to resorts and many others. These incentives may be given out to employees of a team who achieve the maximum sales in a month or those employees who hit their targets given to them every quarter.
2) Embracing modern sales tools and technologies
As technology is continually evolving and improving, providing the sales workforce with the latest sales tools allows them to find out any information they want in just a few minutes. For example, having a CRM system integrated with their smartphones empowers them to access information related to clients and leads on a single dashboard. Also, sales executives can update their work status, which can be easily seen by their managers. All sales employees can be on the same page using such a tool. This helps to increase the productivity and efficiency of the entire sales team.
3) Building strong bonds
It is essential to create a strong relationship with the sales team by increasing engagement. This was maybe done through monthly or quarterly team outings. Having a strong bond and connect with the sales workforce builds trust in them and makes them feel valued.
4) Offering new goals and challenges
Top performers in sales thrive when new challenges and opportunities are given to them. A new product or service or a challenging sales target gets them charged up. A problem can also be to train new sales employees or handle a sales team. Challenges are expected to bring out the best in the top performers.
5) Rewarding and recognizing performances
It is crucial to understand, appreciate and reward talented sales employees for their hard work and commitment. Rewards need not always be monetary. Rewards can be something like a free gym membership, free club membership, holiday trips, gift coupons or for that matter, even verbal recognition.
Myths and realities related to employee retention
There are some myths and realities which are related to employee retention and are quite popular as well.
Myth #1: Hiring and retention of employees are not co-related
Fact: This is not true as while the recruitment process, the recruiters will select those candidates who are a perfect fit and are less likely to leave the organization. Then the grooming and training of these candidates will increase the retention in your organization.
Myth #2: Money is the most essential reason for which employees leave an organization
Fact: Money is one of the major reasons why your employees will think about leaving your organization. When your employees feel that the money they are being paid is not adequate, they would plan about leaving the organization. However, if your employees are paid with the amount that aligns with their expectations then there are other factors like work culture, lack of growth prospects, lack of manager support, etc. which can become causes for leaving the organization.
Myth #3: When you are training your employees, you are training them for another employer
Once a CFO had asked the CEO, “What if we train our employees and they leave?” to which the CEO had replied, “What if we don’t train our employees and they stay?”
Fact: Training your employees, grooming them and making them proficient make them more presentable for the market but at the same time, it will help in reducing retention in your organization. When you are training your employees and making them good performers, your employees feel satisfied and can remain with your organization for a longer period.
Myth #4: You should not be worried about retention while organizational change
Fact: Organizational change is an accurate time when you should be worried about retention. Suppose in the case of merging or acquisition in your organization, some of the jobs might be cut due to several economic factors; many employees tend to leave the organization voluntarily. This might happen as they do not find their job security.
Myth #5: When top-performing employees want to leave the organization, you cannot stop them
Fact: It is quite true that if your good employees want to leave your organization, they are free agents and have the liberty to do so. However, it’s the organization that needs these top-performing employees and should maintain such a workplace environment so that these employees do not leave the organization.
Your employees are the basis of your organization and they should remain with the organization. Employees leaving an organization cannot be eradicated but the probabilities can be lowered by giving importance to employee retention in your organization. When your employees are happy, satisfied they will remain with you and be putting in their hard work for the organization and its goals.
You can ensure that your employees remain with you by understanding their problems, making them feel that you care about them and following effective employee retention strategies in your organization.