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Retention Management

The document outlines the importance of employee retention for organizational performance and continuity, highlighting key factors that influence why employees stay or leave. It details a retention management process that includes measurement, intervention, and evaluation, as well as the costs and benefits associated with voluntary turnover. Additionally, it emphasizes the need for organizations to adapt their retention strategies based on internal and external assessments to foster employee engagement and reduce turnover.

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4 views

Retention Management

The document outlines the importance of employee retention for organizational performance and continuity, highlighting key factors that influence why employees stay or leave. It details a retention management process that includes measurement, intervention, and evaluation, as well as the costs and benefits associated with voluntary turnover. Additionally, it emphasizes the need for organizations to adapt their retention strategies based on internal and external assessments to foster employee engagement and reduce turnover.

Uploaded by

s1913285145
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Retention Management

Importance of Retention
• For lower turnover
• For higher performance of organization
• Continuity of employees provides better employee image’

Why People Stay or Leave

(Survey done by McKinsey & Company “factors affecting the attraction and retention of managers and
executives)

Great company Great Job Compensation &


Lifestyle

Value and Freedom and Differentiated pay package


Culture autonomy High total compensation
Well managed Job has
Company has exciting challenges Geographic location
Exciting challenges Career advancement Respect for lifestyle
and growth
Meaning of Retention Strategy: A plan organizations create and use to
reduce employee turnover, prevent attrition, increase retention and foster
employee engagement.

Why are workers leaving?

Exit interviews can provide invaluable insight into the employee perspective
of a company and help determine whether employee retention strategies
need improvement.
Generally departing employee cite one or more of the following reasons for
leaving their jobs:
• Inadequate salary
• A perks and benefits package that is not competitive
• Feeling over worked and /unsupported
• Limited career development
• A need for better work-life balance
• Lack of recognition
• Boredom
• Unhappiness with management
• Concerns about the company’s direction or financial
health
• Dissatisfaction with the company culture
• The desire to make a change
• More challenging job opportunities at other companies
Retention Determinants
Organizational Components:
• Values and culture
• Strategies and opportunities
• Well managed and result oriented
• Job continuity and security
Career Opportunities:
• Training continually
• Development and mentoring
• Career planning
Rewards:
• Competitive pay and benefits
• Performance reward differentiation
• Recognition
• Special benefits and perks
Retention Management Process
Step 1: Measurement and Assessment
• Turnover measurement analysis
• Costing of turnover : hiring costs, training costs , productivity costs, separation costs
• Employee surveys (attitude survey focuses on employees’ feelings and beliefs about their jobs and
organization)
• Exit interviews: asked to identify reasons for leaving the organization.

Step 2: Retention Intervention


• Recruiting and selection
• Orientation and training
• Compensation and benefits
• Career development and planning
• Employee relations

Step: 3: Evaluation and Follow up


• Review turnover data regularly
• Track intervention results
• Adjust intervention efforts
Job design and work:
• Job responsibility and autonomy
• Work flexibility
• Working conditions
• Work/life balancing
Employee relationships:
• Fair and non-discriminatory treatment
• Supervisor/management support
• Co-worker relations
Evidence-based guidelines for retention management:

1. Diagnose and adapt to a particular organizational


context:
• Analysis turnover costs, rates and functionality
• Conduct internal and external benchmarking and
needs assessment
• Develop retention goals
• Collect data on cause-effect relationships
• Design retention strategies
2. Develop knowledge of underlying principles
and cause-effect relationships:

• Organizational equilibrium and the turnover


process
• Evidence-based predictors of turnover
• Alternative paths to turnover
3. Develop a shared understanding of turnover
among organizational stakeholders:

• Define types of turnover


• Develop a consensus for costing turnover
• Develop a shared understanding of the
importance of retention
Voluntary Turnover Costs and Benefits:

Separation Costs:

Tangible

- HR staff time (e.g. Salary, benefits, exit interview)


- Manager’s time(e.g. Payment, retention attempts, exit interview)
- Accrued paid time off (e.g. Vacation, sick pay)
- Temporary coverage (e.g. Overtime for current employees,
temporary employee)
Intangible:

- Loss of workforce diversity


- Diminished quality while job is unfilled
- Loss of clients
- Contagion – other employees decide to leave
- Teamwork disruptions
- Loss of seasoned mentors
Replacement Costs
• General costs
- HR staff time ( recruitment, selection, orientation)
- Hiring manager time (e.g. Input on new hire decision,
orientation, training)
• Recruitment
- Advertising
- Employment agency fees
- Hiring inducements ( e.g. Bonus, relocation, perks)
- Referral bonuses
• Selection
- Selection measures expenses( e.g. Interview, work samples ,
selection tests)
- Application expenses

• Orientation and training


- Orientation program time and resources
- Formal and informal training (time, materials, equipment,
mentoring)
- Socialization ( e.g. Time of other employees, travel)
- Productivity loss (e.g. Loss of production until replacement is fully
proficient)
Turnover Benefits

• Savings may be achieved by not replacing leaver


• There is an infusion of new skills or creativity into organization
• Vacancy creates transfer or promotion opportunity for others
• Costs savings may be achieved by hiring a replacement with less
experience or seniority
• Replacement could be a better performer and organization citizen
• Replacement could enhance workplace diversity
• Departure may offer the opportunity to reorganize the work unit.

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