Organization is a social entity created by group of people or employees, who work together to achieve its goal. Employees are considered as most valuable assets for an organization or a firm because an organization is nothing more than a name without its employees. Group of employees not only creates an organization but they also provide competitive advantage to an organization.
Employees whether at higher level like managers or at lower level like foremen, clerk’s helps an organization to compete with other organizations. They offer their skills, capabilities, language, speed, behavior, etc which helps an organization in execution of its strategies. So, an organization is incapable of doing anything without support of its employees whether they are at lower level or at higher level, it is very necessary to withhold them.
Retention of employees means a firm’s or an organization’s ability to retain or withhold its employees. It requires proper strategies. It means an organization has to make planes and should frame proper policies for their retention. An organization can only retain its employees if it knows the reason behind their moving out.
Why Employees Leave Organization?
• Pay Scale: The first and the most important reason that encourage people to move out of an organization is money. Money is the main motivating factor. Everyone works to earn money and employees generally leave an organization if they get comparatively higher pay somewhere else or if they are not satisfied with their current pay.
• Lack of Motivation: Motivation is a psychological factor that encourages employees to work for achievement of desired goals. Employees should be motivated time-to-time whether monetarily or non-monetarily. It is very important for anyone to have proper zeal to work. Motivation provides that zeal.
• Lack of Managerial skills: Managerial skills are very important to withhold employees. Managers who do not have proper managerial skills are not able to hold their employees. It is not always necessary to behave strictly but some situations demands politeness. It is necessary for a manager to hear the problems of employees and provide the appropriate solution.
• Better Opportunity: In such a competitive environment everyone search for new opportunities and when they get them they switch over to that more suitable job.
• Lack of Interest: People sometimes lack interest in their job or they get bore because of monotonous routine or job is not same as described by employer during the interview.
• Less Growth Opportunities: Employees switch over to other companies when they think they do not have any growth opportunities.
• Size of Organization: In very big organizations managers unable to take care of all the employees and not able to communicate with each of them and listen to their problems.
So, there can be many more personal or professional reasons that encourage people to switch over to some other company. Like, employees are satisfied from the job but are unable to continue because of some personal issues, imbalanced routine, etc.
It is very difficult task to retain employees but also very important because there are many organizations who are looking for knowledgeable people. Replacement of employee costs usually 3 times the salary of an individual. It is better to retain them.
Why Retention is Important?
• Cost of Turnover: Cost of turnover means tangible or intangible cost associated with replacement of employees. Cost of Turnover is quite high that includes cost on hiring new employees, cost on their training and intangible cost bear by company due to loss of productivity of knowledgeable employees.
• Loss of Organizational Knowledge: Employees take with them knowledge about company’s project, clients, training offered to them. An organization spends on the training of employees by expecting a good return in future. So, if employees leave organization then this is loss on investment for that organization.
• Skilled Employees: Retention of employees ensures skilled and knowledgeable employees remain in the company and helps in the development of strong staff which benefits an organization in long run.
• Impact on Client service: Customers need reliable and consistent service. Long-term employees develop harmonic relationships with customers and retention of employees has good impact on clients.
It is very important for an organization to satisfy its employees. As retention of employees is essential for its normal running. But how can employees be withhold? An organization should frame proper policies to retain them.
Strategies to Retain Employees
• Offer Competitive Packages: An organization can retain its employees by providing them competitive packages. Companies nowadays are looking for talented employees. So, it is very necessary and difficult to withhold employees for longer period. But a good pay scale can motivate employees to remain in company.
• Communication: Communication between the vertical and horizontal level is very important. It is very important listening to the problems of employees and to provide them proper solution because employee satisfaction is very necessary.
• Delegate Authority and Responsibility: Generally, responsibilities are delegated but with that it is also important to delegate at least some authority to employees. This help in their motivation and employees will feel valuable.
• Employee’s Participate in Decision making: Employee’s participation in company’s important decision not only increases their morale but also they can provide some very good suggestions that could be helpful for company.
• Provide Opportunity of Growth and Development: An Organization should offer time-to-time training and development programs so that they can grow and develop and feel satisfied in terms of growth.
• Feedback: Regular surveys should be conducted to know employees feedback regarding manager, team leaders, supervisors or on other issues so that employees feel important and those surveys can also help to know their satisfaction level.
• Bonus: Timely bonus like performance based bonus, loyalty bonus are also helpful in increasing employee’s morale and their retention in the organization.