The Human Resource department performs several functions including recruitment and retention of employees. Recruitment involves creating a pool of potential employees and then selecting final employees from that pool. Conversely, retention is about keeping the employees you hire.
For every business, it is important to hire the right kind of people for every job and then make sure that the talented employees continue to perform with the company. For this there should be a proper employee management and retention system.
This goal can be achieved by making use of the following metrics.
Employee turnover can be defined as the number of people who leave the company in a certain time period. Each company and industry have their turnover rates that change from time to time.. If the company’s turnover rate does not equal the industry’s average, the company should take measures to control things.
Employees always thrive to take on better opportunities. Companies should prepare policies catering to employees’ need and aim to become an ‘employer of choice’. This can be done by taking care of their requirements and appraising them as per their performance. In addition to monetary compensation, employees need to be provided with other benefits and growth potential in order to keep them working for you.
Lastly, both, too low or too high, turnover rates are bad for a company. If the turnover rate is too high it suggests that the company is not able to retain people, and if the rate is too low then it may suggests that the company is ‘too good’ which is why the employees are not moving away. Nonetheless, a low turnover rate may also be a good sign, depending on the business and the reason for the low rate.
Every talent management team needs a retention program so that skilled employees can be provided with incentives to stay, and work for the company. Devise retention strategies keeping market situations and your needs in mind so that your skilled team members stay with you throughout. It is important to measure every employee’s capability properly to reach a conclusion about the kind of incentives he or she deserves. A company should never overpay or underpay any employee as both the scenarios cause a large damage to the company.
Competency Gap Index
Competency Gap Index is the difference between the required skill sets for success and the skill set which your business currently has. This value should be as small as possible, but if it is high, it can be improved in numerous ways.
To remove this gap, managers should hire cautiously. Additionally, employees should be provided with adequate training and development to sharpen their skills. All the training sessions should be conducted with a keen eye on ROTI (return on training investment). Companies should use their employees’ potential to the maximum by matching their positions to their skills.