- What is employee retention
- Why do employees leave?
- What is an employee retention strategy
- Top 5 reasons to retain your best employees
- Top 9 employee retention strategies
- Employee retention strategies in Indian companies
- Employee retention strategies for sales people
- Myths & realities related to employee retention
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.
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Why do employees leave?
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.
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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.
Need more employee retention strategies? Download the Employee Retention Guide
Employee retention strategies in Indian companies
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.