Human resources are a central part of a company. In other words, the success of any company depends upon the quality of human resources they have. Having adequate and realistic employee retention strategies in place is equally important to any other business strategy.
The term, employee retention, means processes or strategies formulated by a company by which employees are encouraged and motivated to remain employed with them for the longest period or until the project is completed. Whether or not an employee is satisfied working in a particular company depends on the five major factors; Compensation, Environment, Growth, Relationship and Support.
A typical retention program should focus all these factors mentioned above and the policies formulated in respect of these factors should be favorable in the eyes of the employees. If the employees feel that the policies are too rigid and that there is no growth opportunity for them, personally and professionally, they will start looking for other jobs and eventually switch whenever they find a good opportunity.
When one of the employees’ resigns, the workload on other employees increases unless a replacement has been found for the one who has left. However, the resignation of any employee may have an alarming affect on others which may lead to a high employee turnover. An employee turnover is the ratio of the number of employees moving out of the company to the average number of employees remaining.
A high employee turnover rate brings along a number of additional costs for the company, for example, productivity loss, training costs, hiring costs, etc. Not only that, the company faces greater difficulties in regaining the lost efficiency. Even if the company finds a replacement for the employee who resigns, it takes time to train the new employee and for him to settle and gel with the environment. This has a relative effect on the overall productivity and efficiency of the company as a whole.
Therefore, it is vital for a company to have favorable HR policies in terms of working conditions, working environment, compensation package, number of leaves allowed, etc. Nowadays, employees not only look for a good compensation package, all other things are equally important for them. They look for companies that offer a high growth potential for them, both personally and professionally. Moreover, they expect support from their seniors to help them in achieving this professional growth.
Keeping in mind what the employees expect from a company and how a high employee turnover ratio will affect the company, it should design and implement appropriate employee retention strategies and review and update them regularly. Employees are an asset for companies that are necessary for their survival and success. Therefore, the company should try their best to retain knowledgeable and skillful employees in this highly competitive environment.