https://www.techtarget.com/searchhrsoftware/definition/employee-retention
Employee retention is the organizational goal of keeping productive and talented workers and reducing turnover by fostering a positive work atmosphere to promote engagement. This includes showing appreciation to employees, providing competitive pay and benefits, and encouraging a healthy work-life balance.
Employers are particularly interested in retaining employees during periods of low unemployment and heightened competition for talent. To retain employees, organizations use human resources technology for recruiting, onboarding, engaging and recognizing workers, as well as offer more work flexibility and modern benefits like physical and financial wellness programs.
Employee retention is important for team building and cohesion in the workplace so workers can trust and depend on each other.
Diminished productivity and competitive advantage are among the biggest losses when talented employees leave an organization. High employee turnover rates can harm an organization's ability to carry out its mission due to impairments to continuity, loss of institutional knowledge, and the high costs of replacing departing workers and training new replacements. Employee departures can also lower morale and prompt more employees to leave the organization.
For example, an organization might experience much slower progress on a project if it must continuously deal with the time, cost and lack of productivity that comes with continually onboarding and training new employees to fill vacant positions with high turnover rates. These new workers also need time to fully learn an organization's systems and to be productive.
Another negative effect of turnover is the impact on customers who notice that they're dealing with a continual flow of different people. High turnover typically signals to consumers that there's something wrong with the organization or brand.
Employee engagement and employee experience are among the more important strategies in retaining valued workers and maintaining a positive employer-employee relationship. Significant business benefits include the following:
Exit interviews and employee surveys reveal some of the more common reasons why employees quit their jobs, including the following:
Companies concerned with retaining valued employees can take several immediate actions in key areas to help bolster their retention programs and lower turnover rates.
Onboarding. Companies focused on retaining employees usually start with the hiring and onboarding process by giving new workers adequate training and orientation about the company's culture. They also give new employees an opportunity to ask questions about their work and engage in dialogue with their supervisors. Employees are often offered, or at least surveyed on, flexible or hybrid work schedules to better ensure a good work-life balance and improve the overall employee experience. Some companies even offer reduced workdays. For example, an organization might enable employees to take every other Friday off.
Recognition, rewards and compensation. Some organizations use systematic recognition and reward strategies to show they value their employees. Some employers rely on employee engagement software that uses gamification and other techniques to recognize workers and provide rewards and perks like retail discounts. Employers also focus on competitive pay using employee compensation management software that compares pay rates with benchmarks for given regions, job titles and performance ratings.
Benefits. Employers seek to distinguish themselves in the hiring arena by offering varied benefits, including voluntary, employee-paid and corporate subsidized. Newer types of benefits include lower healthcare premiums, higher deductible health insurance plans, pet insurance, education debt repayment programs and legal counseling.
Performance feedback and reviews. To promote good communication and transparency, especially with the advent of remote and hybrid workforces, many companies don't wait for an annual review to evaluate an employee's performance. Instead, managers hold frequent one-on-one meetings with employees to provide constructive feedback, periodically discuss their professional interests and goals, and encourage new ideas.
Training, education and development. Companies offer employees opportunities for advancement through programs that provide upskilling, succession planning and attendance at conferences and webinars. They also promote programs that pair an employee with a mentor who can offer guidance and training in a specific area of expertise.
Perks. To foster work-life balance, many companies offer flexible work schedules, time off and shorter work weeks; telecommuting via work-from-home schedules; and remote work opportunities for extended vacation and holiday location stays. They also train managers to encourage employees to take vacations.
Amenities. Employers increasingly provide office amenities such as ergonomic and standing desks, subsidized meals, free refreshments, daycare, elderly care and relaxation hubs featuring games like table tennis and pool.
Emphasize teamwork. Focusing on building teamwork and collaboration encourages co-workers to bond and create friendships. It also creates a better work culture, can improve performance and can improve employee engagement.
Reduce burnout. Burnout is caused by overwork, lack of recognition or lack of rewards. Burnt-out employees might feel more pessimistic about their jobs and become less engaged.
Culture. Creating a strong company culture can incentivize and attract new potential workers and keep current employees engaged. Enacting a strong company culture can involve implementing any of the previous items listed.
Typical metrics used in the measuring of employee retention include the following:
HR departments can deploy employee engagement software to do pulse surveys on worker impressions of the company and take action to remedy areas where employees show low job satisfaction. Such surveys are usually anonymous and brief, so employees are more likely to participate.
Within an organization, a feeling of belonging and being heard are considered key aspects of employee retention. Workers also often cite the importance of managers who support them. Frequent surveys are a way to gauge employee feelings about their supervisor.
Employers use corporate wellness technology that encourages companywide teamwork through a variety of techniques, such as competitive activities and group volunteer projects. Promoting physical and psychological well-being is sometimes a key aspect of corporate wellness. For example, organizations can provide incentives and discounts on health insurance for employees who use wearables, mobile devices and other ways to track their physical health and activity.
Depending on the application, there are numerous types of HR software available, including the following:
For hybrid work schedules, a new category of HR software manages flexible hours and work environments that blend on-premises and remote work scheduling for each employee, as well as space requirements such as hot desking, hoteling, customizable work hubs and conference areas. These tools can also play a role in managing employee retention efforts. In addition, HR information, management and capital management systems incorporate elements of employee retention tracking and management.
There are many ways for an organization to gauge and improve employee retention. Learn how people analytics can help HR improve employee retention.
01 Apr 2024