Retention of Employees: A key competitive factor

SHARE   |   Tuesday, 22 March 2016   |   By Isang Lekhutile

I have always wondered why organisations invest so much in employees and let them go so easily. Employees will always look for green pastures and that’s the nature of the industry. Few of my mates from different industries always pose this question....What is the role of HR in retaining employees? Its beat me that we as HR practitioners failed to advice organisations on issues of employee retention. In fact, we have to take the blame for subside of employee performance and dissatisfaction in our organisations. What have we done as HR practitioners to assist our organisations in retaining key talent? Do we effectively use the exit interview opportunity to understand and gauge our problems as an organisation? If yes, why we have high turnover as an organisation? Do we care about our employees or it’s always about meeting targets? Do we view our employees as assets? Mind you HR department is just an expense department but our value should be seen. What interventions do we have to engage an employee on the eve of resignation?

In Botswana, our workforce is small and employee movement is so common. This calls for organisations to retain top talent for competition sake. Nowadays, businesses often find that they spend considerable time, effort, and money to train an employee only to have them develop into a valuable commodity and leave the company for greener pastures. In order to create a successful company, employers should consider as many options as possible when it comes to retaining employees, while at the same time securing their trust and loyalty so they have less of a desire to leave in the future. Employee retention refers to policies and practices companies use to prevent valuable employees from leaving their jobs. In many instances, employee retention starts just as soon as an employee is hired. How to retain valuable employees is one of the biggest problems that plague companies in the competitive marketplace. Employees are an organization's intellectual asset that is responsible for the day-to-day business operation. Every company should understand that people are their best commodity. Without qualified people who are good at what they do, any company would be in serious trouble. In the long run, the retention of existing employees saves companies money. Although retaining competent employees in an organization generates goodwill in the work force, it also has a positive effect on the product or services a company offers. Employee retention is a financial gain for organizations. The loss of employees not only removes talent from a business, it also represents a loss of the company resources invested in the employee. 

In the 1950s, Frederick Herzberg studied employee retention and motivation and eventually came up with his duel dimensional job satisfaction theory, noted J. Michael Syptak, M.D., David W. Marsland, M.D., and Deborah Ulmer, Ph.D., writing on the American Academy of Family Physicians website. Herzberg believed that the two dimensions of job satisfaction are dissatisfiers (he called them “hygiene” issues) and satisfiers, also called motivators. His theory was that employees can be retained through minimizing dissatisfaction and maximizing satisfaction. Dissatisfiers include factors such as administration, company policy, working conditions, supervision, relationships and salary. Satisfiers include the job, promotion, achievement, responsibility and recognition. Employee retention is the act of keeping employees. Webster's Dictionary defines retaining as keeping in one's pay or service. Unless it needs to lay off employees, the organization wants to keep its employees in its pay and service. There are many reasons that organizations want to retain employees, and there are actions the organization can take to promote employee retention.

Employees have diverse needs. Employee retention involves a systematic effort by the organization to create an environment that addresses diverse employee needs so employees will stay with the company. The Society for Human Resource Management defines employee retention as the rate at which organizations maintain employees in positions. Employee retention is the opposite of turnover, which can have extreme costs, both financial and non-monetary, for the organization. Businesses that conduct effective employee retention strategies are better able to protect organizational resources than those that experience high turnover rates. The strategies for employee retention are courtship, coaching, communication, compensation, collaboration, commitment and continuous improvement. Courtship involves creating a good relationship with your employees from the beginning. Continue to coach your employees; act as a mentor and a leader. This promotes loyalty. Effective communication is vital in any organization; open communication creates a friendly environment and makes your employees feel that they belong.

Compensation comes in many forms; come up with creative ways to compensate your employees. Collaboration involves working together and sharing experiences; this creates a team setting for your employees. Do not take your employees for granted; show them your commitment through appreciation, feedback and recognition. Show your employees that your organization is making an effort to continuously improve. Update your organization's knowledge and abilities. Employee retention practices help support an organization’s productivity. Recruiting and training new employees takes time. An unfilled position means work is not getting done. Even if a position is filled, there is still a learning curve most employees must overcome before their work becomes profitable. Retaining a positive and motivated staff is vital to an organization's success. High employee turnover increases expenses and also has a negative effect on company morale. Implementing an employee retention program is an effective way of making sure key workers remain employed while maintaining job performance and productivity. Retaining workers reduces training costs. Recruits need to be trained in business practices specific to the employer's software, culture and office practices. Training requires one or more current employees to take time away from their job responsibilities to educate the new employee on the organization's way of doing business. 

A thorough understanding of an employee's goals, concerns, skill level, values, health, and job satisfaction are just a few of the areas that can be addressed. By doing so, the employee could be made to feel more like a prized individual and less like a cog in a corporate machine. At the same time the company will educate itself as to which employees are the most valuable in both a business and personal sense. Increasing employee engagement is another common objective of employee retention. Without proper management, employee retention issues can have an extremely negative effect on organizational finances. The reduction of the costs associated with high turnover is also a typical objective of employee retention. Turnover costs the organization time, money and a variety of other resources that are not always easily accounted for. For example, according to the Employee Retention Strategies website, high turnover also increases "job stress when remaining employees are burdened with the distribution of the departed employee's workload. The retention of knowledge and skills is a common objective of employee retention and is essential to the long-term success of the organization. High turnover rates result in what is referred to in human resources as "brain drain." This occurs when an organization is unable to maintain employees who are knowledgeable about the organization. Without access to such knowledgeable employees, organizations lose knowledge that is typically passed on from employee to employee rather than imparted in formal training programs.

Maintaining a diverse work force is another common objective of employee retention strategies. Diversity includes workers of varying sexes, ages and races as well as educational and workplace experiences. This is difficult to maintain within an organization that experiences high turnover. According to the Society for Human Resource Management website, organizations that maintain high retention levels, "typically have strong, sustainable corporate cultures that can act as key differentiators in the marketplace.