Retention Strategies

Retention strategies are policies and plans that organisations follow to reduce employee turnover and attrition and ensure employees are engaged and productive long-term. The key challenge for businesses is ensuring a retention strategy aligns with business goals to ensure maximum return on investment. Corporate social responsibility is a key growth area of retention strategies employees may be more likely to remain with an employer that shows a commitment to the local community or the environment. At the same time, CSR is increasingly aligning with the bottom line as consumers increasingly do business with companies that display strong social responsibility policies.

Studies have shown that employees typically follow four primary paths to turnover, each of which has different implications for an organization:

• Employee dissatisfaction. Attack this issue with traditional retention strategies such as monitoring workplace attitudes and addressing the drivers of turnover.
• Better alternatives. Retain employees by ensuring that the organization is competitive in terms of rewards, developmental opportunities and the quality of the work environment. Be prepared to deal with external offers for valued employees.
• A planned change. Some employees may have a predetermined plan to quit (e.g., if their spouse becomes pregnant, if they get a job advancement opportunity, if they are accepted into a degree program). However, increasing rewards tied to tenure or in response to employee needs may alter the plans of some employees. For example, if a company is seeing exits based on family-related plans, more generous parental leave and family-friendly policies may help reduce the impact.
• A negative experience. Employees sometimes leave on impulse, without any plan for the future. Generally, this is the result of a negative response to a specific action (e.g., being passed over for a promotion or experiencing difficulties with a supervisor). Analyze the types and frequencies of work-related issues that are driving employees to leave. Provide training to minimize prevalent negative interactions (e.g., harassment, bullying, or unfair and inconsistent treatment) and provide support mechanisms to deal with those problems (e.g., conflict resolution procedures, alternative work schedules or employee assistance programs).

Additional predictors of turnover that merit careful attention include:

• Organizational commitment and job satisfaction.
• Quality of the employee-supervisor relationship.
• Role clarity.
• Job design.
• Workgroup cohesion.

Following are some of the employment practices which will help create an impact on employee retention:

• Recruitment and Hiring: Right and correct resource should be hired in the first place. It calls for quite a lot of time and effort. When the bond between the employees and the organization is cordial and the mix between the required skill set for a particular job requirement is also right, retention is less likely to be an issue.
• Orientation and Onboarding: Treating employees the right way in the early stages of employment is vital and enhances retention.
• Training and Development: Training and development are the key factors in helping employees grow with your company and stay marketable in their field.
• Performance Evaluation: When employees are aware of what they are doing and the areas they need to improve on, it is beneficial both for the organization and the employee.
• Pay and Benefits: While today many employees tend to rate factors such as career development higher than pay, good pay and benefits still count to be the deciding factors for employee retention.
• Internal Communication: Effective communication will help reduce the communication gap in an organization and curb employee attrition. Employees need to know and be reminded on a regular basis how the organization is doing and what they can do to help.
• Termination and Outplacement: Employees who leave on good terms are much more likely to recommend your company, and in doing so, help you attract and retain future employees.

Broad-based strategies

Broad-based strategies are directed at the entire organization or at large subsystems and are intended to address overall retention rates. Examples include providing across-the-board market-based salary increases, changing the hiring process to incorporate retention-related criteria and improving the work environment.  

The data needed to help a company determine which broad-based strategies to implement typically come from three places:

• Retention research can shed valuable light on the primary drivers of turnover. Attendance at conferences and membership in professional associations such as SHRM can provide access to the latest research on turnover and retention.
• Effective practices encompass the strategies that other organizations are using and are finding effective or ineffective.
• Benchmarking surveys can provide information about how a company compares to competitors on issues such as pay, benefits, bonus plans and the like.

Targeted strategies

Targeted strategies are based on data from several key sources, including organizational exit interviews, post-exit interviews, stay interviews, employee focus groups, predictive turnover studies and other qualitative studies. This information can lead an organization to determine more specifically where a problem exists and to develop highly relevant and linked strategies to address the issue. For example, if female professionals are departing the organization in significant numbers, a company could review common reasons that women give for leaving a company and develop strategies to specifically deal with this group of employees.