Employee Retention - Introduction to Employee Retention

  Employee Retention

Introduction to  Employee Retention

In the current competitive job market, where there is a strong demand for skilled professionals, it is essential to retain high-performing individuals in order to maintain efficiency, foster innovation, and maintain a positive business culture. Employee retention is influenced by various factors, including competitive compensation packages, opportunities for career advancement, programmes promoting work-life balance, recognition and incentive programmes, and the presence of a positive work environment. Organizations have the potential to significantly reduce turnover rates and cultivate a committed and engaged workforce by prioritizing employee well-being, investing in their professional development, and fostering a culture that appreciates their contributions. The implementation of effective staff retention strategies not only enhances overall organizational performance and long-term viability, but also yields cost savings in terms of recruitment and training expenditures. Amidst intense competition for highly skilled employees, it is crucial to retain top personnel in order to maintain productivity, foster innovation, and sustain a positive work environment.




What is Employee Retention?

Employee retention refers to a systematic process or set of measures implemented to maintain the presence of workers within a firm. The objective of employee retention is to establish stability among the workforce and mitigate variations. Employee retention can be influenced by various factors such as employee growth possibilities, remuneration, bonuses, working environment, and job satisfaction. There are multiple methods available for assessing employee retention (Abdulai and Fatmata, 2019). Employee retention is crucial for the success of a business. The ability of a company to attract and retain skilled employees plays a crucial role in its growth and overall performance. In order to retain its top employees, a corporation must offer them competitive compensation, benefits, and opportunities for advancement.

Employee retention is a critical concern for human resources departments in all types of firms. The impact of high turnover rates on a business's profitability, morale, and productivity is significant. The responsibility of cultivating a work environment that fosters employee engagement, satisfaction, and loyalty is entrusted to human resources professionals. Effective talent retention necessitates the implementation of several strategies, such as offering competitive compensation and benefits, providing opportunities for professional development and advancement, fostering a positive workplace culture, and establishing streamlined communication methods. 

Importance of  Employee Retention 

The measures employed by organizations to prevent the departure of their employees are commonly known as employee retention strategies. Ensuring a high retention rate is crucial as high turnover can incur significant costs and have a detrimental impact on team morale. Effective retention requires the presence of growth opportunities, a conducive work environment, and competitive benefits.

Long-term employees undergo comprehensive training and exhibit a high level of proficiency in performing their routine duties. They possess the ability to successfully accomplish their projects within the designated timeframe and have developed effective channels of communication with their supervisor and colleagues. The first phase required for newly hired individuals to adapt to the requirements of the work environment and get training might momentarily impede the overall productivity of a team. Employees who have been with a professional organization for an extended period of time contribute significant value to the firm. 

The individuals possess a comprehensive comprehension of the organization's mission and demonstrate proficiency in addressing the requirements associated with their role. Moreover, they possess all the requisite skills to efficiently perform daily tasks.


Banking Sector 

Employee retention is crucial for long-term prosperity, client pleasure, and operational efficiency in the banking industry. Providing competitive remuneration packages encompassing salaries, bonuses, and other benefits such as health insurance, retirement plans, and opportunities for career advancement is a crucial strategy for retaining personnel in this industry.  The establishment of a robust organisational culture, effective channels of communication, and a supportive managerial approach can collectively foster a positive work atmosphere that cultivates employee appreciation and motivation, thereby enhancing their commitment to the organisation. Employers can mitigate attrition rates by providing ongoing training and development opportunities, so affording their employees the opportunity to enhance their professional growth and augment their skill sets. Furthermore, the implementation of performance incentives, awards, and recognition activities serves to enhance the loyalty of staff members towards the organisation. Banks might potentially mitigate attrition and retain highly skilled individuals that play pivotal roles in the highly competitive banking industry by allocating resources towards professional development and enhancing job satisfaction.

References 

Abdulai, Ibrahim & Kamara, Fatmata. (2019). An Effective Employee Retention Policies as a Way to Boost Organizational Performance. Journal of Human Resource Management. 7. 41.

Chipunza, C., Samuel, M.O. (2009), Employee retention and turnover: using motivational variables as a panacea. African Journal of Business Management, 3(8), 410-415. 

Collins, C.J., Clark, K.D. (2003), Strategic human resource practices, top management team social networks, and firm performance: the role of human resource practices in creating organizational competitive advantage. Academy of Management Journal, 46(6), 740-751. 

Grubb, P.L. (2006), Accessing communication affects on employee retention. PhD Dissertation. Alabama: University of South Alabama. 

Heathfield, S.M. (1995), Top ten ways to retain your great employees. Available from: http://www.humanresources.about. com/od/retention/a/more_retention.htm. [Last retrieved on 2010 May 23]. 

Huselid, M.A. (1995), The impact of human resource management practices on turnover, productivity, and corporate financial performance. The Academy of Management Journal, 38(3), 635-672. 

Kennette Reed and Associates. (n.d.), Available from: http://www. kennettereed.com/articles/Organization_Retention_Questionnaire. pdf. 

Kerr, J., Slocum, J.W. (1987), Managing corporate culture through reward systems. Academy of Management Executive, 1(2), 99-108. 

Kevin, M.M., Joan, L.C., Adrian, J.W. (2004), Organizational change and employee turnover. Personnel Review, 33(2), 161-166. 

Khan, F., Yusoff, R.M., Khan, A. (2014), Effect of human resource practices on job satisfaction in Pakistan. Sains Humanika, 1(1).

Koster, F., De Grip, A., Fouarge, D. (2011), Does perceived support in employee development affect personnel turnover? The International Journal of Human Resource Management, 22(11), 2403-2418

Comments

  1. Shashika SupunApril 13, 2024 at 8:08 AM

    Agreed with the arguments, Employee retention is crucial for organizational success as it contributes to stability, productivity, and profitability. Opatha and Arulrajah (2017) highlights that retaining skilled and experienced employees reduces recruitment and training costs while maintaining continuity in operations.

    ReplyDelete
    Replies
    1. Nimesha NanayakkaraApril 13, 2024 at 10:54 AM

      yes shashika , indeed, employee retention plays a pivotal role in an organization’s prosperity. By retaining skilled and experienced employees, companies can achieve stability, enhance productivity, and improve overall profitability.

      Delete
  2. Thanushi JayaratneApril 13, 2024 at 8:17 AM

    Moreover, As per Cheng (2004), Human resources are hired by organizations and trained to work within their structures. As a result, they undertake extreme caution to guarantee that newly hired employees in banks are kept on board and they do this by taking into account organizational, work satisfaction, human resource, and benefit considerations in addition to employee demands.

    ReplyDelete
    Replies
    1. Nimesha NanayakkaraApril 13, 2024 at 11:00 AM

      Yes thanushi , As per Cheng (2004) refers to a systematic process or set of measures implemented by organizations to maintain the presence of workers within their firms. In today’s competitive job market, where skilled professionals are in high demand, retaining high-performing individuals is essential for several reasons: like Efficiency, Innovation and Positive Culture

      Delete
  3. Hashira CaderApril 13, 2024 at 10:47 AM

    According to Miller, Erickson & Yust (2001) [44], employees get benefited by work environment that
    provide sense of belonging. Moreover when the environment not provide a good intention to work employee will leave the work.

    ReplyDelete
    Replies
    1. Nimesha NanayakkaraApril 13, 2024 at 11:08 AM

      yes, Hashira agreed. however, Employee retention continues to pose one of the greatest challenges facing organizations and managers today with the loss of valuable talent incurring heavy costs to the organization in terms of institutional know-how as well as the time, money, and efforts needed to recruit and train replacements.

      Delete
    2. Nimesha NanayakkaraApril 13, 2024 at 11:09 AM

      yes, Hashira agreed. however, Employee retention continues to pose one of the greatest challenges facing organizations and managers today with the loss of valuable talent incurring heavy costs to the organization in terms of institutional know-how as well as the time, money, and efforts needed to recruit and train replacements.

      Delete

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