1. .

EMPLOYEE RETENTION
2. 2. ABSTRACT Human resources are the life-blood of any organization. Even though
most of the organizations are now a days, found to be technology driven, yet human
resources are required to run the technology. They are the most vital and dynamic
resources of any organization. With all round development in each and every area of the
economy, there is stiff competition in the market. With this development and competition,
there are lots and lots of avenues and opportunities available in the hands of the human
resources. The biggest challenge that organizations are facing today is not only
managing these resources but also retaining them. Securing and retaining skilled
employees plays an important role for any organization, because employees’ knowledge
and skills are central to companies’ ability to be economically competitive. Besides,
continuously satisfying the employees is another challenge that the employers are facing
today. Keeping into account the importance and sensitivity of the issue of retention to any
organization, the present study tries to review the various available literature and
research work on employee retention and the factors affecting employee retention and
job satisfaction among the employees.
3. 3. INTRODUCTION Employee Retention is a method of taking measures to encourage
workers to stay in the company for the highest possible time duration. It is a process in
which the workers are motivated to stay with the completion of the particular project or
long term. Employee Retention technique is beneficial for the company as well as the
worker. And it is up to the HR department stuff. Employee retention refers to the ability of
an organization to retain its employees. Employee retention can be represented by a
simple statistic (for example, a retention rate of 80% usually indicates that an
organization kept 80% of its employees in a given period). However, many consider
employee retention as relating to the efforts by which employers attempt to retain
employees in their workforce. In this sense, retention becomes the strategies rather than
the outcome. Long-term health and success of any organization depends upon the
retention of key employees. To a great extent customer satisfaction, organizational
performance in terms of increased sales, satisfied colleagues and reporting staff,
effective succession planning etc., is dependent upon the ability to retain the best
employees in any organization. Encouraging employees to remain in the organization for
a long period of time can be termed as employee retention. It is a process in which the
employees are encouraged to remain with the organization for the maximum period of
time or until the completion of the project. A distinction should be drawn between low-
performing employees and top performers, and efforts to retain employees should be
targeted at valuable, contributing employees. Employee turnover is a symptom of deeper
issues that have not been resolved, which may include low employee morale, absence of
a clear career path, lack of recognition, poor employee-manager relationships or many
other issues. A lack of satisfaction and commitment to the organization can also cause
an employee to withdraw and begin looking for other opportunities. Pay does not always
play as large a role in inducing turnover as is typically believed.[1] In a business setting,
the goal of employers is usually to decrease employee turnover, thereby decreasing
training costs, recruitment costs and loss of talent and organizational knowledge. By
implementing lessons learned from key organizational behavior concepts, employers can
improve retention rates and decrease the associated costs of high turnover. However,
this isn't always the case. Employers can seek "positive turnover" whereby they aim to
maintain only those employees whom they consider to be high performers.
4. 4. DEFINITION An effort by a business to maintain a working environment which
supports current staff in remaining with the company. Many employee retention policies
are aimed at addressing the various needs of employees to enhance their job satisfaction
and reduce the substantial costs involved in hiring and training new staff. DEFINITION
OF TERMS  Benefits: Health care, vacation hours, sick hours, bonuses that may be
part of the employment of the position.  Communication: The internal process of
passing information or data pertaining to the work environment.  Employee Retention:
Refers to the ability of an organization to retain its employees.  Industry Leaders:
Management level positions within the hospitality industry.  Native American Casino: A
casino business owned and operated by a federally recognized tribe of the United States
 of America.  Nature of Work: Relates to all duties and tasks of the position for
employment.  Promotion: The increased value of wages for a position of employment.
 Performance Evaluation: Documentation during a time period on the progress or lack
of progress for a position of employment.  Wages: The hourly pay scale for an
employee of a business. Employee retention refers to the various policies and practices
which let the employees stick to an organization for a longer period of time. Every
organization invests time and money to groom a new joinee, make him a corporate ready
material and bring him at par with the existing employees. The organization is completely
at loss when the employees leave their job once they are fully trained. Employee
retention takes into account the various measures taken so that an individual stays in an
organization for the maximum period of time.
5. 5. MEANING Employee retention refers to the ability of an organization to retain its
employees. Employee retention can be represented by a simple statistic (for example, a
retention rate of 80% usually indicates that an organization kept 80% of its employees in
a given period). IMPORTANCE OF THE STUDY Employee Retention represents the
methods employed by the management to help the workers stay with the company for so
many years. Worker retention techniques go a long way in encouraging the workers so
that they adhere to the company for the long stay and play their employee role
successfully. Honest initiatives must be taken to make sure learning and enjoy their work
for the employees in their current projects.  A company spends lots of money in
developing an individual person and makes him ready to work great and understand the
corporate working culture.  When an employee resigns his job from present company, it
is more likely that he/she may join the competitors firm.  If an employee working in an
organization for many years, they can understand the particular firm’s guidelines, so thus
they can adjust better.  It is an essential for the company to maintain the good working
employee and his presenting potential.
6. 6. OBJECTIVES OF THE STUDY This study on review of literature on retention
initiatives undertakes the following objectives:  I. To find out the various research works
that have been done in the area of employee retention.  II. To highlight the various
factors which affect retention initiatives in an organization. METHODOLOGY The study is
descriptive in nature and only secondary data has been used in it. The secondary data
consist of the various research journals.
7. 7. EVOLUTION OF RETENTION Employee retention may seem a relatively recent
concept but actually it goes back over 20 years when the term first appeared in an
academic journal in 1990. Prior to that, during the 70’s and 80’s, HR’s (or as it was then
‘personnel’s’) focus was on employee satisfaction. But this had little or no connection with
performance and was more about the employee than the organisation or the employee’s
relationship with it. But then things started to change. Increased global competition and
the from a manufacturing economy to a service one meant employers needed to be more
flexible, leaner and competitive. Traditional industries closed or were severely cut back
and employees learned the hard way that there were no jobs for life, that to progress in
their careers they too needed to be more flexible and move to where the opportunities
were. And that’s what they did. The old contract of a job for life with a nice fat pension at
the end of it was broken. People were free – encouraged even – to move from job to job,
selling their skills and at the same time acquiring new ones courtesy of the new
employer. Loyalty didn’t come into it, or if it did it was more fleeting, more short term. So
it benefited the employee but employers soon realised that actually they were losing
people they didn’t want to lose. It was costing them money and affecting their ability to
compete effectively. THE RISE OF RETENTION It is at this point in the story - during the
noughties - that the concept of engagement matured. Key to this was a paper published
by the Institute of Employment Studies (IES) in 1990 ‘From People to Profits, the HR link
to the service-profit chain’ which showed how employee attitudes and behaviour could
improve customer retention and consequently sales performance. This clear link between
engagement and performance, supported by extensive research, helped establish
engagement’s importance to both HR and business performance. The fact that the UK
had become a service-based economy made the report’s findings even more relevant
and increased the focus on employees and their interaction with customers. For service-
 based businesses, the old mantra that ‘staff are your greatest asset’ became ‘staff are
your only asset.’ This led to greater incentives to invest in staff as the returns were seen
as greater employee commitment, motivation, productivity and ultimately profit (or, in the
case of not-for-profits, achieving strategic objectives). The business case for engagement
was supported by another seminal study in 2002 which also showed the link between
engaged employees and profit. What had back in 1990 been confined to predominantly
academic circles was now being discussed and implemented at practitioner level.
Organisations began to see the potential that engagement had to positively affect a
whole raft of HR and business measures including employee retention, absenteeism and
turnover; sales; profitability and customer service/satisfaction scores.
8. 8. HR or business function? Engagement has also grown from something that was seen
as being owned or ‘done’ by HR to something that needs to be owned and driven by the
CEO and senior leadership team. In fact to be truly effective engagement needs to be
owned by everybody; it needs to be part of an organisation’s DNA. Indeed, engagement
measures are often aligned to managers’ performance through KPIs – Key Performance
Indicators. Engagement’s importance to a business and its subtle move of ownership
away from the HR department (who still ultimately have responsibility for delivering the
policies around it) has seen the rise not only of roles like Head or Director of Engagement
but engagement’s place around the Board table.
9. 9. Engagement and the public sector Engagement is just as relevant to the public sector.
Indeed, the impact of overworked, stressed and demotivated staff is far more serious in
the health sector than in a supermarket or call centre. A study by Aston University in
2011 showed that patient mortality rates were approximately 2.5% lower in health trusts
with high engagement levels than in those with medium engagement levels. So next time
you have to choose a hospital for treatment, ask how engaged the staff are, not how
experienced the surgeon is… So, what is ‘engagement’? Despite all the research, the
jury is still out on a universally agreed definition. These have evolved as our knowledge
and experience of engagement has evolved but there is a strong consensus as to what it
is and isn’t. Engagement boils down to an employee’s passion and commitment to the
organisation and their job and the drive to deliver the organisation’s objectives, going the
extra mile to do so. Engagement is not transactional - it’s about emotion, behaviours and
relationships; there’s a connect between the employee and the organisation. Engaged
employees have pride in their job and the organisation and are more likely to recommend
the organisation, its products and services to others. One of the key drivers of
engagement is trust which applies at a number of levels:  Work group  Line manager 
Senior leaders  Systems & processes THE FUTURE OF RETENTION Retention is now
firmly embedded in the collective consciousness of the HR community as seen in the
proliferation of conferences, events and LinkedIn groups dedicated to engagement, the
inclusion of a module on employee engagement in the CIPD diploma and the large
number of vendors and service provides offering surveys, consultancy, research and
training. lts inroads into the wider business community was aided by the launch of the
government-backed movement, Engage for Success, in 2011 which also nailed the
evidence for the financial benefits of engagement. Its status as ‘mainstream’ is also
reflected in the increase in searches on ‘employee engagement’ as reported by Google
Trends which has shown a continuous rise since 2006.
10. 10. Google trends – the rise of searches for ‘employee engagement’ As for the future of
engagement, that now seems to be more about sustaining it rather than finding the next
hot HR theory about how to attract, motivate and retain good employees. As
demographics change (Baby Boomers, Generation X , Generation Y/Millenials and now
Generation G) engagement gives organisations the tools to provide the kind of workplace
that will attract, retain and motivate its changing workforce. Engagement has reached the
point in its growth where it requires clarity and consistency of definition, delivery and
measurement and movements like the Engagement Taskforce will be instrumental in
achieving this. It would seem that there are very few businesses which are against
engagement, the problem is more about doing something about it, particularly those in
the SME sector which don’t have the same resources and infrastructure as larger
organisations. The taskforce is keen to bring the growing importance of employee
 engagement to investors who are starting to look at the people side of financial metrics
such as employee turnover and absence rates. SUSTAINING ENGAGEMENT Of all the
theories about what engagement is and what drives it, there seems to be agreement
(Great Place to Work®, Engage for Success) that trust is one of the key drivers. We
believe that trust is and will continue to be critical to both driving and sustaining
engagement.
11. 11. THE EVOLUTION OF ENGAGEMENT
12. 12. INDIAN SCENIRIO IN EMPLOYEE RETENTION EMPLOYEE RETENTION
STRATEGIES For an organization to do well and earn profits it is essential that the high
potential employees stick to it for a longer duration and contribute effectively. The
employees who spend a considerable amount of time tend to be loyal and committed
towards the management and always decide in favour of the organization. When you
meet someone, there is hardly any attachment in the beginning, but as the friendship
matures, a sense of loyalty and trust develops. In the same way, when an individual
spends a good amount of time in an organization, he gets emotionally bonded to it and
strives hard for furthering the brand image of the organization. The management can’t
completely put a full stop to the process of employees quitting their jobs but can control it
to a large extent. Let us go through some strategies to retain an individual:  An
employee looks for a change when his job becomes monotonous and does not offer
anything new. It is essential for everyone to enjoy whatever he does. The responsibilities
must be delegated according to the individual’s specialization and interests. It is the
responsibility of the team leader to assign challenging work to his team members for
them to enjoy work and do not treat it as a burden. Performance reviews are important to
find out whether the employees are really happy with their work or not.  Constant
disputes among employees encourage them to go for a change. Conflicts must be
avoided to maintain the decorum of the place and avoid spreading negativity around.
Promote activities which bring the employees closer. Organize outdoor picnics, informal
get together for the employees to know each other better and strengthen the bond
among themselves. Let them make friends at the workplace whom they can really trust.
Friendship among employees is one strong factor which helps to retain employees.
Individuals who have reliable friends at the workplace are reluctant to move on for the
sake of friendship. No one likes to leave an organization where he gets mental peace. It
is essential to have a cordial environment at the workplace.  The human resource
department must ensure that it is hiring the right candidate. Frustration crops up
whenever there is a mismatch. A finance professional if is hired for a marketing profile
would definitely end up being frustrated and look for a change. The right candidate must
be hired for the right profile. While recruiting a new candidate, one should also check his
track record. An individual who has changed his previous jobs frequently would also not
stick to the present one and thus should not be hired.  Employee recognition is one of
the most important factors which go a long way in retaining employees. Nothing works
better than appreciating the employees. Their
13. 13. hard work must be acknowledged. Monetary benefits such as incentives, perks, cash
prize also motivate the employees to a large extent and they prefer sticking to the
organization. The performers must have an upper edge and should get a special
treatment from the management.  Performance appraisals are also important for an
employee to stay motivated and avoid looking for a change. The salary hike should be
directly proportional to the hard work put by the employees. Partiality must be avoided as
it demotivates the talented ones and prompt them to look for a better opportunity.  The
salary of the employees must be discussed at the time of the interview. The components
of the salary must be transparent and thoroughly discussed with the individuals at the
time of joining to avoid confusions later. The individuals should be made to join only
when the salary as well as other terms and conditions are acceptable to them.  The
company’s rules and regulations should be made to benefit the employees. They should
be employee friendly. Allow them to take a leave on their birthdays or come a little late
once or twice in a month. It is important for the management to understand the
employees to gain their trust and confidence. The consistent performers must also have
a say in the company’s decisions for them to feel important.
14. 14. Why do Employees Leave ? Research says that most of the employees leave an
organization out of frustration and constant friction with their superiors or other team
members. In some cases low salary, lack of growth prospects and motivation compel an
employee to look for a change. The management must try its level best to retain those
employees who are really important for the system and are known to be effective
contributors. It is the responsibility of the line managers as well as the management to
ensure that the employees are satisfied with their roles and responsibilities and the job is
offering them a new challenge and learning every day. Let us understand the concept of
employee retention with the help of an example: Misha was a talented employee who
delivered her best and completed all her work within the desired time frame. Her work
lacked errors and was always found to be innovative and thought provoking. She never
interfered in anybody else’s work and stayed away from unnecessary gossips and
rumours. She avoided loitering around at the workplace, was serious about her work and
no doubts her performance was always appreciable. Greg, her immediate boss never
really liked Misha and considered her as his biggest threat at the workplace. He left no
stone unturned to insult and demotivate Misha. Soon, Misha got fed up with Greg and
decided to move on. Situation 1 - The HR did not make any efforts to retain Misha and
accepted her resignation. Situation 2 - The HR immediately intervened and discussed the
several issues which prompted Misha to think for a change. They tried their level best to
convince Misha and even appointed a new boss to make the things better for her.
Situation 1 would most likely leave the organization in the lurch. It is not easy to find an
employee who gels well with the system and understands the work. Hiring an employee,
training him and making him fit to work in an organization incur huge costs and thus
sincere efforts must be made to retain the employee. Every problem has a solution and
the management must probe into the exact reasons of an employee’s displeasure.
Employees sticking to an organization for a longer time tend to know the organization
better and develop a feeling of attachment towards it. The employees who stay for a
longer duration are familiar with the company policies, guidelines as well as rules and
regulations and thus can contribute more effectively than individuals who come and go.
Employee retention techniques go a long way in motivating the employees for them to
enjoy their work and avoid changing jobs frequently.
15. 15. A BALANCE BETWEEN HIRING AND RETENTION IS KEY TO HR STRATEGY
Hiring employees is just a start to creating a strong work force. Next, you have to keep
them. Retaining employees is an essential part of both business productivity and
workforce optimization. The issue of employee retention has surfaced as a key concern
in almost all the organizations having access to the same technology and systems,
where it’s the human capital that creates the difference in shaping the future of an
organization. Retaining the best employees in an organization ensures an organization’s
improved productivity as well as reduced costs. Employee turnover costs can be
staggering for an organization. It costs a huge amount of money when all costs involved
in recruiting, interviewing, hiring, training, reduced productivity etc., are considered. Also
the replacement costs amount to 30-50% of the annual salary of entry-level employees,
150% of middle level employees, and up to 400% for specialized, high level employees.
Consider the real “total cost” of losing an employee:  Cost of hiring involves advertising,
interviewing, screening, hiring, etc  Cost of on boarding a new person which includes
training (both on the job and off the job)  Lost productivity where a new person may
take 1-2 years to reach the productivity of an existing person
16. 16.  Customer service and errors when new employees take longer and are often less
adept at solving problems  Cultural impact (whenever someone leaves others take time
to ask “why?”). A comprehensive people strategy is not at all comprehensive if it doesn’t
include a proven retention strategy for holding on to employees they have worked hard to
recruit into the company. That may sound logical, but many, if not most, small businesses
overlook this critical component in their human resources program. The problem with
most employee retention plans is they focus too much on compensation rates, benefits,
and short-term perks. It’s not that these factors are unimportant; they’re very important. In
fact, most top choice employers typically offer better pay and benefits than their
competitors. However, it is often discovered in exit-interview results, that the majority of
 employees voluntarily leave their jobs for other reasons like misalignment of mutual
expectations, person-job mismatch, insufficient coaching and feedback, perception of
poor career-advancement prospects, work-life imbalance, etc Retention is maximized in
a company by creating a “win-win” situation between management and employees,
where the needs of the employee are met to the greatest extent possible without
sacrificing or losing sight of the needs and goals of the company. If a company loses a
critical employee, it is a safe bet that other people in the company are looking out as well.
So here are some tips for retaining great employees which an organization can follow: 
Communicate goals, roles and responsibilities so people know what is expected and feel
like part of the “in-crowd.”  Simply recognize hard work and celebrate the success. It
can be as simple as a handwritten thank you note or a small token of appreciation. 
Engage and employ the special talents of each individual.  Involve employees in
decisions that affect their jobs and the overall direction of the company whenever
possible.  Provide opportunities within the company for cross-training and career
progression.  Conducting “stay” interviews. In such kind of interviews questions can be
asked like: Why did you come to work here? Why have you stayed? What would make
you leave? And what are your nonnegotiable issues? What about your managers? What
would you change or improve?
17. 17.  Establish a culture that encourages employees to speak freely in a respectful and
constructive manner.  Demonstrate loyalty to your employees, as a result of which
they’ll reciprocate with commitment and loyalty to your business  People want to work
for a winner. Identify and inform your employees about your unique competitive
advantage so that they are proud to work for you other than going on your competitor’s
side  Offer some small perks, stock option plans, etc along with a competitive benefits
package that fits your employees’ needs. HR’s role today is no longer limited to a
‘facilitative role’ or ‘policy administration’ but it has to play the role of a ‘business partner’
and share the responsibility for overall business results. It needs to offer best solutions in
the area of attracting and retaining talent, leadership development, talent management,
building a performance culture, rewarding high performers disproportionately and, above
all, driving the right culture and values. And therefore, “Retention” may be no more than a
symptom, but it’s something organizations should take seriously. In today’s heating
economy and rapid shift in demographics, they have to compete for talent regardless of
their industry and so have to make such a kind of retention model where they have the
best talent to take them where they want their mission and vision to go.
18. 18. ROLE OF MOTIVATION IN EMPLOYEE RETENTION Employee retention involves
various steps taken to retain an employee who wishes to move on. An employee must
find his job challenging and as per his interest to excel at work and stay with the
organization for a longer period of time. The management plays an important role in
retaining the talented employees who are familiar with the working conditions of the
organization and thus perform better than the employees who just come and go.
Motivation plays an important role in employee satisfaction and eventually employee
retention. Nothing works better than motivation. Motivation acts as a catalyst to an
individual’s success. The team leaders and the managers must constantly motivate the
employees to extract the best out of them. If an employee has performed exceptionally
well, do appreciate him. Simple words like “Well done”,“Bravo”,“Good”,“Keep it up”
actually go a long way in motivating the employees. The top performers must be in the
limelight. The employees must feel indispensable for the organization. It is essential for
the employees to be loyal towards their organization to deliver their level best. Does
anyone spoil his personal belongings? No. The reason being we are concerned about
our own stuff. In the same way a sense of belonging at workplace is important for better
output. Ownership of work only comes through motivation. Ask the team members to
buck up so that they perform well every time and meet the expectations of the
management. The superiors should send motivational emails to their team once in a
week. Display inspirational posters, photographs on the notice board for the employees
to read and stay motivated. It is natural for an individual to feel low sometimes, but the
superiors must ensure to boost their morale and bring them back on track. No individual
should be neglected or criticized. This demotivates them. If they fail to perform once,
 motivate them and give them another opportunity. Organize various activities and events
at the workplace. Ask each one to take charge of something or the other. Engage the
employees in productive tasks necessary for their overall development. The management
must show its care and concern for all the staff members. The employees must feel
secure at the workplace for them to stay motivated. Whenever any company policy is to
be formulated, the opinion of each and every employee should be taken into
consideration. Invite all of them on a common platform and ask for their suggestions as
well. Freedom of expression is must. Every employee must have a say in the
organization’s guidelines as they are made only to benefit them. Incentives, perks, cash
prizes are a good way to motivate the employees. The employees who have performed
well consistently should be felicitated in front of all the staff
19. 19. members as well as the management. Give them trophies or badges to flaunt. Ask
the audience to give a loud applause to the employees who have performed well. This is
a good way to motivate the employees for them to remain happy and work with
dedication for a longer duration. Others who have not performed up to the mark also gear
up for future. The names of the top performers must be put on the company’s main notice
board or bulletin board for everyone to see. Appraisals are also an important way to
motivate the employees. The salaries of the performers must be appraised at regular
intervals- an effective way to retain the employees. Career growth is an important way to
retain the talented employees. Give them power to take some decisions on their own but
the management must have a close watch on them so that they do not misuse their
power. Without motivation, it is not fair to expect the best out of the employees. No
individual likes to leave an organization where he is being treated well. ROLE OF HR IN
EMPLOYEE RETENTION An organization can’t survive if the top performers quit. It
needs employees who are loyal and work hard with full dedication to achieve the
organization’s objective. It is essential for the management to retain its valuable
employees who think in favour of the organization and contribute their level best. An
employee who spends a longer duration at any particular organization is familiar with the
rules, guidelines and policies of the organization and thus can adjust better. The Human
Resource team plays an important role in employee retention. Let us find out their role in
the same:  Whenever an employee resigns from his current assignments, it is the
responsibility of the HR to intervene immediately to find out the reasons which prompted
the employee to resign. No one leaves an organization without a reason. There has to be
one and the human resource team must probe into it. There can be innumerable reasons
for an employee to leave his current job. The major ones being conflict with the superiors,
lesser salary, lack of growth, negative ambience and so on.  It is the duty of the HR to
sit with the employee and discuss the various issues face to face. Understand his
problems and listen to his side of the story as well. Remember the HR should not focus
on conducting exit interviews, rather more emphasis should be laid on retaining the
employees. 1. Try to provide a solution to his problem. Hiring is a tedious process and it
is really very difficult to recruit the right candidate and train him once again. Do check the
track record of the employee who wishes to move on. It is really essential for the
management to retain those employees who have the potential and are really
indispensable for the organization. If they leave and
20. 20. join the competitors; the organization would be at loss. If one feels that the employee
is not very happy with his team leader, try to shift him to a new team. If the employee
feels his salary is not justified, try to give him a hike but make sure he is worth it and you
don’t end up upsetting others.  The HR person must ensure that he is recruiting the
right employee who actually fits into the role. A right person doing the wrong job would
never find his job interesting and certainly look for a change. Make sure every individual
has been assigned responsibilities according to his specialization and interest. The
employees must be clear with their KRAs from the very beginning. Every individual works
for money and the HR must quote a justified salary acceptable to the other person. Don’t
compel anyone to join at a lesser salary. He might join at that moment but would most
likely quit after sometime. The hike should be on the present salary and must match the
market trends and the expectations of the individual.  The human resource department
must conduct motivational activities at the workplace. Organize various internal as well
 as external trainings which help the employees to learn something extra apart from their
routine work. Make them participate in extracurricular activities important for their overall
development. Encourage them to interact with each other so that the comfort level
increases.  The HR must launch various incentive schemes for the top performers to
motivate them. This way the employees feel important for the organization and strive
hard to perform even better the next time. The employees who show promise should be
awarded with cash prizes, lucrative perks and certificates to make the individual stand
apart from the crowd. Send a mail wishing the employees on their birthdays or
congratulating them when they perform exceptionally well or come out with something
innovative. Arrange a small bouquet for them as a gift from the organization’s side. This
way the employees feel attached to the organization and are reluctant to look for a
change. A friendly atmosphere is essential for the employees to feel safe and secure.
Make them participate in various management decision making.  Performance reviews
are a must. The HR along with the respective team leaders must monitor their team
member’s performance to ensure whether they are enjoying the work or not. The
employees look for a change only when their job becomes monotonous and does not
offer any growth or learning. Job rotation can be one of the effective ways to retain
employees. The HR professional must try his level best to motivate the employees, make
them feel special in the organization so that they do not look for a change.
21. 21. EMPLOYEE RETENTION: HOW TO DO THINGS BETTER Employee Retention:
How to do things better. We all know that it is expensive to replace employees. How do
we keep our employees in our respective companies? The typical employment tenure is
now less than five years. What are people looking for in a new engagement and why are
they disheartened with their current employer. While everyone enjoys a bump in their
base pay, more people are putting other measurements above just dollars and cents. In a
Forbes study, they cite results from executive advisory firm CEB’s quarterly Global Labor
Market research in 2012, involving 50,000 employees. The number one thing employees
are looking for in newjobs? Stability. CEB reps say this signals a change from wanting to
work for the “next big thing” to work for a more mature, established company—a
business with a plan. Here are the top 5 reasons why employees leave their perch. 
Stability  Compensation  Respect  Health benefits  Work-life balance
22. 22. I think that the above list could also be re-arranged depending on the age of the
worker. There are things more important to a working parent than there may be with a
person whose kids are grown and gone (or at least grown). We should all strive to create
a corporate culture that resonates not only with our employees but with the industry that
we are serving. This will help with the retention and voluntary attrition rates within our
organizations. It will also help with your brand recognition within the industry to drive
more candidates into your recruitment pool as opportunities arise. Hire for the company –
not for the engagement: One of the biggest mistakes that companies make is that they
hire an individual based on the needs of the contract. What we should be doing is
recruiting and hiring people for the betterment of the company. What is good for the
individual contracts or projects will derive from this practice. A lot of companies will hire
an individual based on the needs of the project. While this solves the short term problem,
the contract eventually ends and you now have to figure out what to do with the
employee. If you are hiring an individual for the contributions that they can make for the
company, the contract will end, but you will have their next assignment ready for them
when they roll off of the engagement. Move Business Development to the Left: While it
seems to be common sense, there are several organizations who are responding to “Just
In Time” procurements. Meaning, you see a contract announcement being let on your
favourite portal and you put in a response and hope for the best. If you spend some time
researching organizations and establishing contacts within the procuring agency you will
have a better PWIN. Get to know your potential clients and their challenges so you are
better prepared to provide them with a solution. This activity will help you provide a stable
pipeline of business within your organization and a means to reallocate under-utilized
resources. How much is that career in the window? Be prepared to compensate your
employees at fair and equitable rates within your company. If you are paying JAVA
developers less than the market rate the quality of your deliverables will decline and your
 chances for winning follow on work or even new work at jeopardy. By providing your
employees fair pay and also a means to move up the ladder within the company will keep
them engaged and interested in the solutions you are providing to your clients.
Employees are People 1st and Resources 2nd: Follow the Golden Rule… Do unto others
as you would like them to do unto you. Whether you are dealing with a documentation
specialist with 2 yrs of experience or a solutions architect with 22 years of experience,
everyone just wants a little R-E-S-P-E-C-T. Be considerate of peoples time and schedule
meetings that make effective use of their time. Make sure you show appreciation for their
work on a regular basis. Everyone likes to have some positive reinforcement from all
levels of management to reaffirm that they are a valued member of the team.
23. 23. HealthCare and Benefits: HealthCare and other benefits are also a factor in providing
our employees a stable environment to thrive in. You may find depending on the
demographic of the employee that this may rank higher with certain demographics than
others. But at the end of the day – having Personal Time Off (PTO) and adequate and
affordable Healthcare options available to your employees is an absolute necessity.
Work-Life Balance: How many forty hours weeks have you worked this year? If the
answer is “I only work 40 hour weeks”, you are one of the lucky ones. I cannot remember
the last forty hour week I have worked. There are always late client meetings,
development sprints that need to be handled, or other operational issues within a project
or corporate environment that makes it a necessity to work more than the “standard” 40
hour work week. Whether you are working 45 or 55 hours a week, we as managers need
to be sure that our employees are getting the appropriate work-life balance. People will
only work so many 65 hour weeks before they get burned out and start looking for a less
stressful engagement. While above normal burns are sometimes necessary we don’t
want to make them the norm STRATEGIES FOR ENGAGEMENT AND RETENTION In
this uncertain economy it is important that we understand the historical engagement and
retention trends that paint who we are, the existing trends that mold our behavior, and the
expected trends of the future that shape our plans. Settling for complacency within our
workforce should no longer be an option. TalentKeepers’ annual Talent Engagement &
Retention Trends 2012 survey, including results from 430 organizations, provides us a
comprehensive overview of today’s employee talent, engagement, and retention trends.
The overwhelming majority, 81 percent of organizations agree (33 percent strongly
agree, 30 percent agree and, 18 percent slightly agree) employee engagement is a
strategic priority, so we challenge organizations everywhere to push employee
engagement to the next level. Employee engagement is your employees' ability and
willingness to contribute to organizational success, especially their willingness to give
"discretionary effort", going beyond what is typically required in their position to make the
organization successful. This can be accomplished through four main drivers of
engagement: 1. leadership 2. co-workers 3. job/career satisfaction 4. a high performing
organization. TalentKeepers’ research and client results show that higher levels of
employee engagement are linked to employee commitment, a high performing workforce,
satisfied and loyal customers, and a productive and profitable organization. Figure 1:
Engaged Workforce Model
24. 24. When considering the factors that are impacted by lack of engagement, we typically
think of the people factors like lowered employee morale and more stress. Because
disengagement and attrition directly align with organizational effectiveness, these can
also have a great impact on operational factors such as lost productivity, which was cited
by 66 percent of organizations surveyed and lost organizational knowledge affecting 54
percent of organization surveyed. The operational costs associated with disengaged
employees often far exceed the costs of turnover. Strategies for Engagement and
Retention Push employee engagement and retention to the next level by implementing a
systematic approach. Begin with senior leadership engagement. Nearly half (48 percent)
of organizations surveyed reported that diminished trust and loyalty has eroded
employee engagement over the past year. Of the organizations with diminished trust and
loyalty, the largest decrease has been between employees and senior managers. Senior
leaders need to “keep employees in the know” as much as possible, they need to be
visible, share the organization’s vision, breed openness for employees to communicate
 about concerns and suggestions, and they need to produce a culture of appreciation and
recognition.
25. 25. Since starting work as a part time employee, at a supermarket at sixteen, I have
worked in a number of businesses, sections and work groups. As a result I have
experienced a range of working environments where morale has ranged from high to low
and turnover has varied just as much. For years now I have looked at companies such as
Virgin where, from an external perspective, there is a high level of morale and low
turnover. Over the same timeframe I have also spoken with staff who have worked for
companies where the exact opposite is true. As I so often do, I began to wonder what
causes the difference, which led me to developing the metric at the beginning of this
post. Now, nothing as compact as this table can capture all the issues, but I hope it can
bring clarification.
26. 26. EMPLOYEE RETENTION NOW A BIG ISSUE: WHY THE TIDE HAS TURNED What
does Retention Mean? Nearly all companies measure turnover. In some industries (retail,
customer service, hospitality) turnover rates of 30-40% are common and sometimes even
accepted. I had a conversation with one HR manager who told me "we design our
organization around high- turnover: we make sure jobs are easy to learn so we can
rapidly assimilate new people." While this may be a reality in many companies, our
research shows that it's not a sound strategy. Regardless of the role they play, tenured
employees drive far greater value than those who are "cycling through" the business.
Many studies show that the total cost of losing an employee can range from tens of
thousands of dollars to 1.5-2X annual salary. Consider the real "total cost" of losing an
employee:  Cost of hiring a new person (advertising, interviewing, screening, hiring) 
Cost of on boarding a new person (training, management time)  Lost productivity (a new
person may take 1-2 years to reach the productivity of an existing person)  Lost
engagement (other employees who see high turnover disengage and lose productivity) 
Customer service and errors (new employees take longer and are often less adept at
solving problems). In healthcare this may result in much higher error rates, illness, and
other very expensive costs (which are not seen by HR)  Training cost (over 2-3 years
you likely invest 10-20% of an employee's salary or more in training, that is gone) 
Cultural impact (whenever someone leaves others take time to ask "why?"). And most
importantly of all, we have to remember that people are what we call an "appreciating
asset." The longer we stay with an organization the more productive we get - we learn
the systems, we learn the products, and we learn how to work together.The Economic
Value of Employees over Time Consider the following simple chart. It simply shows that
initially most employees are a "cost" to the organization, and that over time, with the right
talent practices, they become more and more valuable. Our job in HR is to attract the
"right people" and move them up this curve as rapidly and effectively as possible.
27. 27. ECONOMIC VALUE OF AN EMPLOYEE TO THE ORGANIZATION OVER TIME.
Obviously for us as employees, we see this same effect. Early in our days in a new job
we feel somewhat unproductive and often search for ways to add more value. But in the
right environment (on boarding, coaching, training, teamwork) we rapidly "find our place"
and start to add more and more value. A New Model to Drive Retention: Your Talent
"System" Right now retention has become an important topic for many reasons. The
economy is picking up; young employees want more career growth; the work
environment in companies has not kept up with the outside world; management doesn't
always understand how to motivate younger people; and in developing economies the
workforce is simply in great demand and the competition for talent is fierce. Added to this,
of course, tools like LinkedIn now make it easier than ever for you to look for a new job
(or get poached). And we know that high-performing companies have loyal employees. I
can't quote statistics on this topic, but it's well understood that high-performing
companies serve their employees just as well as they serve their customers. One of the
most important studies on this was done by Harvard many years ago and it proves that
only by making your employees happy can you ultimately make your customers happy.
28. 28. Other research by Wayne Cascio called "Lay off the Layoffs" similarly shows that
companies that push layoffs on their employees create long term problems which often
take years to fix. The reason? Layoffs, like retention problems, create low levels of
 employee commitment which in turn move employees back down the value curve.
Covey's wonderful book "The Speed of Trust" clearly explains this in ways that leaders
can understand. So how do we "improve" or "fix" our retention issues? Much common
wisdom over the years blames first line management. Over and over I hear the words
"people don't leave companies they leave managers." Of course there is much truth to
this - nobody wants to work for an uncaring, difficult manager. But our research shows
that the real "retention model" in companies is far more complex. When we look at
retention (Deloitte has both a "retention diagnostic" as well as a "retention analytics"
model) we find that each company has its own unique "retention model." Typically the
model involves a whole variety of factors, and these factors take on different weights
depending on the age, demographic, and role of the employee. So your goal is not to
simply do one thing, but to understand your own company's "retention drivers" by role.
Some of the interesting things to consider:  Compensation plays a role, but not as much
as you may think. All the experience we have shows that for mid-performing people
compensation is a "hygiene" factor - too little money will definitely create high churn, but
over compensating people won't make up for a poor work environment. Of course in
sales and other highly competitive positions compensation is critically important, but it is
by no means the only driver.  Job fit is critically important. For years companies have
talked about the "employee value proposition." In reality there is a "job value proposition."
Are you attracting the "right people" for each job? Some jobs are particularly demanding
(ie. consulting roles where travel is intense). If you honestly explain these roles and their
positives and negatives you will attract people that "fit." If you over-sell the job you'll
suffer high turnover.  Career opportunities matter. Today most companies are going
through a "crew shift" as boomer generation employees retire and millenials and young
people enter management and high value positions. Younger folks are motivated by
growth, career opportunity, and meaning. Our research several years ago showed that
while young people want the same types of benefits and work-life balance as older
people, they are particularly focused on fun, collaboration, and the ability to be with
others they enjoy.
29. 29. So the prospect of a "career" is more than just advancement (which was the way I
was raised).These "non-compensation" and "non-job" factors are bigger than ever now.
We're going to be launching new research on the employee value proposition in the
coming quarters and all evidence shows that we have to think about our organizations as
a "system" which engages employees. The CEO sets the tone and leadership plays a
role, but so do all these other cultural and human aspects of the workplace.  Is your
organization suffering from a retention challenge? Are you feeling "disconnected" or
perhaps unrewarded in your job? If the answer is yes, I'd suggest that your CHRO or
CEO needs to be thinking about retention in a more strategic way. Ultimately the most
successful and enduring organizations in business are those that have a common sense
of mission, a deep respect for their employees (and customers of course), and put time,
energy, and money into building a highly engaging environment. They carefully select the
"right people" with lots of hard work, and once people join they take the time to make
sure they have development opportunities to move up the value curve. "Retention" may
be no more than a symptom, but it's something you should take seriously. In today's
heating economy and rapid shift in demographics, you'll be competing for talent
regardless of your industry.
30. 30. GLOBAL SECNARIO WAYS OF IMPROVING EMPLOYEE RETENTION Employee
retention is a critical issue facing today's enterprises as they compete for talent in a
recovering economy. As Josh Bersin, principal at Deloitte and founder of Bersin by
Deloitte, spells out,the costs of employee turnover are increasingly high, as much as 1.5
to 2 times an employee's salary. There are also other, soft costs, such as lowered
productivity and a decrease in employee morale. These all add up to big trouble for
businesses that aren't investing in their human capital. If you wait until a valued
employee's exit interview to find out why he or she decided to move on, you've missed
out on keeping a productive member of your team. And if they aren't forthcoming about
why they are leaving, you also miss a golden opportunity to identify obstacles and
challenges within your organization and fix them before you lose others. So, how can you
 increase retention rates? CIO.com reached out to technology and business leaders to
find out how to better retain your precious investment. RETENTION STARTS WITH
RECRUITING "Retention starts from the application process to screening applicants to
choosing who to interview. It starts with identifying what aspects of culture and strategy
you want to emphasize, and then seeking those out in your candidates," says Dan
Pickett, CEO of Nfrastructure, an infrastructure, managed services and network services
firm. Infrastructure currently employs about 400 people and a retention rate of 97 percent
- almost unheard of in the IT industry -- or any industry, for that matter. It's a statistic each
member of the company works hard to maintain. "It's an increasing returns model; the
longer someone's with your company, the more productive they become over time. You
have to look at this as a long game, and take steps to ensure you're doing it right by
making sure each employee is completely engaged with and part of the company's
ongoing success," says Pickett. So how can you choose candidates that are more likely
to stay? There are some key indicators right on their resume, according to Pickett.
STUDY JOB HISTORIES One of the first items to look for is how long candidates were at
their previous positions. Job- hoppers are something of a gamble. "While they might just
be looking for the right place to land, a candidate who has had, say, 10 jobs in 12 years
is going to be really difficult to retain for any company, "says Pickett. Choosing people
with longevity at their previous jobs increases the odds in your favor.
31. 31. "You're looking beyond what's written on the resume. Have they worked at a
company for many years through ups and downs? That speaks to loyalty, perseverance
and engagement, "says Pickett. CLEAR PATHS TO ADVANCEMENT According to the
Wall Street Journal, organizations should promote from within whenever possible. Doing
so will not only provide a clear, forward-looking path to greater compensation and
responsibility, but will also help employees feel that they're valued and a crucial part of
the company's success as a whole. PROVIDE ONGOING EDUCATION Employee
development and education is also critical. Whether by providing training for new skills or
tuition reimbursement for outside courses, "furthering your employees' education can
help them feel valued, important and invested in the company," says Picke If you wait
until a valued employee's exit interview to find out why he or she decided to move on,
you've missed out on keeping a productive member of your team. And if they aren't
forthcoming
32. 32. about why they are leaving, you also miss a golden opportunity to identify obstacles
and challenges within your organization and fix them before you lose others. So, how can
you increase retention rates? CIO.com reached out to technology and business leaders
to find out how to better retain your precious investment. OFFER THE RIGHT BENEFITS
Benefits and perks also play a large role in keeping employees engaged and happy. But
benefits should go beyond healthcare coverage and paid sick leave. For example,
consider offering stock options or other financial awards for employees who exceed
performance goals or who stay with you for a certain time period. Or consider offering
flexible work schedules or the opportunity to work remotely. Generous paid leave policies
also go a long way toward helping employees feel they are valued well beyond what they
contribute at the workplace. For example, Change.org, an online social change platform,
recently announced it will offer employees up to 18 weeks of paid parental leave, and it is
encouraging other organizations to do the same. If employees are not offered leave, or
are forced to return to work because they cannot afford unpaid leave, they may become
"distracted and resentful," says David Hanrahan, Change.org's global head of Human
Resources. That distraction and resentment can build, and can often drive an otherwise
satisfied employee to consider other options. BE TRANSPARENT AND OPEN Creating
open communication between employees and management can help foster a sense of
community and a shared purpose. By holding regular meetings in which employees can
offer ideas and ask questions, as well as having an open-door policy that encourages
employees to speak frankly with their managers without fear of repercussion, helps
employees feel that they are valued and that their input will be heard. GET EMPLOYEE
FEEDBACK Another way to measure employee satisfaction is to periodically survey
them. You can do this by using an employee polling tool, like TINYpulse, which sends out
a single question to a company's workforce at pre-set intervals and then tallies results
 anonymously. "Everyone knows that the business changes more than once a year, and
so do people," says David Niu, the founder of TINYpulse and TINYHR. "You don't check
on your finances or your business strategy once a year. So why do you think you can do
that with your people?" Using a strategy like sending out a brief questionnaire, or single
question to employees - such as "What is one process that, if eliminated, could make you
more productive?" - can help HR identify issues early on and rectify them.
33. 33. "The fact that the employees are being heard, that they are being listened to, is
important and can improve retention, even if there's no way the company can address
their challenges at the moment," says Niu. SOMETIMES GOOD EMPLOYEES LEAVE
Of course, sometimes turnover is inevitable. People move. They change careers. They
get a better offer someplace else. "It's difficult when we lose someone who's a rock star,
but that's one of the things you have to be prepared for," says Pickett. "Especially in the
IT industry, which is so competitive. But it's also healthy," he says. "You don't want
someone who doesn't want to be there anymore." RETENTION AND THE BOTTOM
LINE If your employees feel valued and excited about working at your organization, and
fairly compensated, they will not want to go elsewhere. Moreover, their commitment and
enthusiasm will be evident to your customers, says Pickett "That enthusiasm, that
excitement and that investment comes through in every interaction." THE CHALLENGE
OF RETAINING TOP TALENT: THE WORKFORCE ATTRITION CRISIS It is no wonder
that in today's aggressive business environment, the challenge of sustaining a
competitive advantage preoccupies the minds of many business leaders. Corporate
customers and individual consumers have more providers to choose from than ever
before. Furthermore, they often perceive that what they are purchasing is, for all practical
purposes, a commodity that can be easily obtained from other companies if need be. So
how does a corporation distinguish itself in a highly commoditized and competitive
market? Today's businesses are more dependent than ever before on their top
performers to innovate and provide services that differentiate a company from its fierce
competitors. In other words, corporations are reliant upon their human assets to survive
and thrive. However, with unemployment now running at less than 6%, many
corporations and government agencies are struggling to find and keep these valued
employees. Changing work force demographics, such as the shrinking of the most
desirable labor pool (25-34 year olds) and the negative impact downsizing has had on
employee loyalty, have led corporate America to search for answers to recruiting and
retaining the strategic asset of the twenty-first century: talented people. Retaining top
talent was less of an issue in the past, but the shifting tides of the unspoken
employee/employer contract have created new currents in the workplace. The old
contract asked employees to:
34. 34.  work hard  be loyal  give their all In return, they would have:  a job for life  a
home away from home  regular salary increases  a good chance for a promotion The
new contract is substantially different. It states that employees must now work harder,
doing not only their jobs, but the jobs of their former co-workers who were "right-sized." In
return, job security is extinct, promotions are scarce, salary increases are modest at best,
and the constant uncertainty of change is almost guaranteed. Is it any wonder that
employee loyalty is on the demise and talented individual contributors and managers feel
less bonded to their organizations.Because the increased flow of defecting employees
plagued our clients, Integral Talent Systems, Inc., a national consulting and training firm
and Bruce Fern, an expert in the field of retention, engaged in an aggressive endeavor to
tackle the attrition dilemma. As part of this project, we conducted attrition and retention
research with our clients (1), and substantiated our findings by reviewing industry
practices and the behavioral science literature. We uncovered a number of critical
findings, seven of which are described in this article. 1. THE COSTS OF ATTRITION
CAN BE STAGGERING, BUT OFTEN UNSEEN What does it cost an organization when
a talented employee defects to the competition? Some of the cost factors are obvious,
such as productivity losses due to a vacant position. However, there are often unseen
costs, like the reduced productivity from thedeparting employee who is inevitably
distracted during his or her job search and therefore contributes less during this time
period (sometimes called "short-timer’s disease"). Using conservative calculations, one
 technical company in California's Silicon Valley estimates that it costs them an average of
$125,000 when just one employee leaves. Other companies calculate that attrition costs
them annual productivity losses of 65-75%in the position the employee departs. Another
of our clients with a national sales force of hundreds estimates that they have to
scramble to make up for over a million dollars of potentially lost sales when just one
salesperson leaves. To add insult to injury, this does not even take into consideration the
departed employee's attempts to woo his or her past customers over to his or her new
employer. Multiply these costs by the number of employees who leave in one year, and
the financial impact is dramatic.
35. 35. 2. THE REASONS EMPLOYEESSTAYARE NOT THE SAME AS WHY THEY LEAVE
Most organizations do not have a handle on the actual reasons why employees stay, as
well as the actual reasons why they depart. Many organizations attempt to capture the
causes of attrition through exit interviews. Unfortunately, traditional exit interviews just
scratch the surface of the causes for attrition. They inevitably fail to differentiate between
factors that make the new job attractive to the departing employee, versus the reasons
why the employee was prompted to consider leaving his or her current job in the first
place. For example, many employees report "better compensation" as one of their main
reasons for leaving. In many cases, our research revealed that these same employees
were not, in fact, originally dissatisfied with their compensation. Instead, other reasons
prompted them to consider leaving their current job, such as the absence of professional
development opportunities. However, they often do not report these negative reasons
associated with their old job (possibly from fear of retribution), but instead report what is
attractive in thenew job. Because of this phenomenon, organizational data from typical
exit interviews fails to surface the real causes of an organization's attrition problems. This
is just as true when an employee is actively recruited by the competition. Our work in
retention shows that attractive candidates receive calls from recruiters all the time! What
causes the sudden shift that makes an employee act on a recruiter's call at a particular
point in time? We consistently found in these circumstances that something deteriorated
in their work situations that caused them to take the current recruiter's call more
seriously. Obviously, when organizations unknowingly misdiagnose the situation and fail
to surface the most critical factors that contribute to attrition, their solutions to correct the
problem fall short of the mark. The result is a bad diagnosis leading to improper
prescriptions. 3. THE MANAGER'S ROLE IN ATTRITION IS PARAMOUNT BUT
UNDERPLAYED Most managers we interviewed as part of our research in retention
lamented the loss of talented contributors. However, when asked to diagnose the
reasons for an employee's departure, the average manager pointed to a variety of
external organizational factors as the causes of attrition, failing to take any personal
responsibility for the situation. They typically did not acknowledge any factors within their
control that contributed to the employee's departure. For example, managers often
attributed attrition problems to such factors as compensation. Certain factors that are the
responsibility of "the overall corporation" can certainly aggravate attrition if they are not in
order, such as inequitable pay scales or excessively rigid policies that dilute employee
autonomy. However, we discovered that a large number of factors contributing to
employee retention are within the manager's circle of influence.
36. 36. Therefore, the results of any attrition intervention are dependent upon the
organization's ability to provide managers with an awareness of those factors, as well as
tools to help them meet their personal accountability in retaining top talent. Furthermore,
managers need this guidance more than ever before. Managers' span of control has
been widening in most companies over the past several years, and the number of times
the manager "touches" the employee is therefore less frequent. Each contact must
maximize any opportunity to influence employee motivation and commitment. 4.
PREVENTION IS THE BEST MEDICINE The loss of key employees, even in small
numbers, can be devastating to a company. (This points to the importance of tracking not
just overall attrition ratios, but also tracking the level of performers leaving.)
Consequently, we were interested in determining the degree to which managers rank
retention as a high on-going priority. Not surprisingly, we found that the only time the
average manager thinks about retention is when she or he receives a resignation from an
 employee. We also found that most managers predictably attempt to talk departing
employees out of leaving, trying to convince them that they are making a mistake.
However, also predictably, we found that the vast majority of the time, these employees
leave their resignations on the table, resisting attempts to persuade them to stay. And, in
the infrequent situation when a manager successfully persuades the employee to remain,
he or she often leaves within six to nine months anyway. (The exception is when there is
a clear salary inequity which is remedied, and the employee is satisfied with everything
else about the work situation.) Clearly, the solution lies in tying retention to critical
business activities so that managers do not think about retention after the fact, when it is
too late, but rather see it as integral to business success and survival. Treating retention
as an on-going priority enables the manager to focus on proactive measures to sustain
long term employee commitment, rather than on reactive attempts to reverse surprise
resignations. 5. RETENTION HAS AN OFTEN UNRECOGNIZED IMPACT ON THE
CUSTOMER Managers are well aware of the impact on their function when a valued
employee leaves. However, even managers of customer contact functions, such as sales
or customer service, often fail to demonstrate a sensitivity to the impact attrition has on
customers. When key employees leave customer contact functions, customers often
experience:  a discontinuity in the relationship
37. 37.  a negative impact on their own productivity  time wasted reorienting the new
employee to their operation and the way they work When the relationship represents a
value-added partnership, the change in account managers or service providers can set
the relationship back months and give competitors a weighty advantage. This is
especially true if the transition to new account personnel is not well managed. At a
certain point, regular changes in account personnel can send a message of
organizational instability and create the impression that the organization does not care
about the account relationship. In the case of development or support functions, we also
found a general lack of awareness on the manager's part of the negative impact the
departing employee has on internal customers. The departure of a top performing
employee can therefore have a "ripple effect" on the organization and its clients that
creates problems for months. 6. MISGUIDED THINKING: "ATTRITION IS INEVITABLE"
It is true that some level of attrition is unavoidable. In fact, a certain degree of attrition is
desirable in order to compensate for poor hiring decisions. However, human resource
and senior line managers often question whether they can really increase their retention
ratios. The answer is definitively yes, with evidence to support it. In one of our client
organizations, the attrition rate for one of their divisions in 1995 prior to our intervention
was 18.5%, with 25% attrition in one of the most critical occupation groups. After working
with us in 1996 and making retention a priority for every manager, the attrition rate
dropped to 11.7% overall and 15% in the critical group. One might predict that other
factors contributed to this outcome. In fact, it should be noted that there were actually
reductions in employee compensation during this time, which should have increased
attrition. Nevertheless, we still saw an increase in retention rates. Another of our clients
asked that we conduct a retention risk analysis and intervention in a critical technical
division because the organization feared that attrition would rise in the near future. Two
interesting findings emerged from our research with this group. The first was that this
division was already following a number of the retention prescriptions we provide our
clients (one of the few divisions in the entire company to do so). More striking, however,
was the fact that as a result of following these prescriptions, this group's retention rates
were over 10% higher than the rest of the company's, thus validating the efficacy of our
model. Another company in the Northwest began with an attrition rate of 17%. After
following the same prescriptions (2), they reduced their attrition rate to 3%, bringing their
retention rate up to 97%. As the evidence suggests, attrition is not an unbeatable foe.
Instead, it is a challenge that can be overcome with the right strategies and tools.
38. 38. 7. WORLD CLASS RETENTION REFLECTS A MULTI-FACTORED SOLUTION The
scenario in many organizations is the same. Someone, such as a senior line manager or
HR professional who is tied to the business, raises the red flag of attrition, recognizing its
potentially devastating impact on the company's strategic position. Then, someone
scrambles to pull some sort of training or tools together which focuses on only a few (but
 not all) of the factors that are required to reduce attrition. The result is the organization
experiences mediocre results, or no results at all. This multi-factored retention solution is
like the story of the blind men and the elephant. Never having seen an elephant, three
blind men were brought over to a young elephant to let them experience it. Each man
touched a part of the elephant. The first one touched a leg and said, "Now I understand.
An elephant is like a tree trunk." The second man touched the tail and said, "No. You are
wrong. An elephant is like a snake." The third man touched an ear and said, "You are
both quite mistaken. An elephant is like the leaf of a big palm tree." If any of the men
wanted to control the elephant, they would have found themselves incapable of doing so,
because their understanding of the elephant was only partial. This is also true of many
organizations that try to tackle only one factor of the attrition dilemma. One piece of
anecdotal evidence comes from a report made by one of the nation's leading financial
services companies. In an attempt to stem the outflow of critical managers and individual
contributors, they contracted with a reputable training firm with whom they had worked
successfully in the past. While the firm admitted they were not experts in employee
retention, they nevertheless conducted sessions for senior managers, hoping to help
their client to deal effectively with the problem. Unfortunately, but also predictably, the
firm addressed only a fragment of the retention solution. The kick-back from the
managers was strong, since they intuitively sensed this was only a partial solution and it
would not effectively address their issues. Therefore, one litmus test for a retention
solution is to assess its scope and depth. Any solution that is unidimensional is bound to
fail. RETENTION STRATEGIES Our research surfaced six dimensions that are most
critical to influencing retention. These dimensions must be infused into three major
components that must be in place and aligned for an organization to achieve world class
retention: 1. MANAGER RETENTION PRACTICES Our research consistently validated
the reality that the manager plays a significant role in influencing the employee's
commitment level and retention. There are a number of manager
39. 39. retention practices which increase the probability that an employee will remain
committed to an organization over time. These retention practices represent the
manager's actual behaviors on the job. This often has little to do with the amount of
classroom training they have received. Furthermore, the best retention practices are not
the same as the standard menu for good organizational management. Most
organizations ask their managers to place productivity as the highest priority,
underscored by pressures to fulfill "our obligations to our investors." Good retention
practices focus not only on what the employee is contributing to the company, but also
focus on how the manager can create a climate so that the employee is retained and
committed on a long term basis. While enlightened leaders balance the needs of the
organization with the needs of the employee, the truth is that these leaders are rare.
Though managers play a very crucial role in retention, they do not control all of the
factors that can affect attrition. Therefore, the second component represents the
organization's responsibility in the retention equation. 2. ORGANIZATIONAL
RETENTION SYSTEMS There are a number of organizational systems and processes
that influence retention. Some of them are evident, such as equity of pay scales. Other
systems are less obvious, and their impact on retention is often unrecognized. For
example, there is evidence that an organization's recruiting systems and processes can
significantly impact retention ratios. These systems support the Manager Retention
Practices, but they also increase the likelihood that employees are committed on a long
term basis and are performing at their best. 3. MEASUREMENT AND
ACCOUNTABILITY Closely linked to the other components, this component ensures that
retention becomes an on-going priority. Many organizations do not even know what their
attrition rates are. And those that do often lack enough data to pinpoint where the
problem is most severe, or to uncover the specific causes of attrition. For example, those
organizations that measure attrition sometimes do not track it by length of service. The
tenure patterns of the departing employees can reveal valuable information concerning
the potential causes for attrition. Additionally, many organizations do not track attrition by
occupational group other than by "manager" or "non-manager." This simple segmentation
is often a crude one that does not provide the organization the refined information it
 needs. Measurement goes hand in hand with accountability. Organizations must hold
their managers personally accountable for retention. Likewise, they must hold their
corporate staff accountable for developing, maintaining, and upgrading their retention
systems. When retention is relegated the status of being a "HR issue," it often falls to the
bottom of the
40. 40. priority list for managers. When it becomes one of their business goals, it takes on a
new perspective. One example comes from one of the world's top hardware
manufacturers. In a recent meeting, the new director of the telephone technical support
group presented the following four new business goals to his management team. The
first three were: 1. Fulfill Technical Support Contract Obligations 2. Maintain the Highest
Level of Customer Satisfaction 3. Manage Costs Aggressively The fourth goal was to
retain employees! After some discussion, the entire management team observed that
they would not achieve the other goals if they could not achieve their retention goals. In
another division of the same company, the senior managers' personal bonuses are
calculated on the basis of their success at retaining their best people. When managers
are held accountable in this fashion, it ensures that the motivation to examine and
enhance their personal retention practices is ever present.
41. 41. CONCLUSION Foster an environment of teamwork. It takes effort to build an
effective team, but the result is greater productivity, better use of resources, imporved
customer service and increased morale. Here are a few ideas to foster a team
environment in your department:  Make sure everyone understands the department’s
purpose, mission or goal.  Encourage discussion, participation and the sharing of ideas.
 Rotate leadership responsibilities depending on employees abilities and the needs of
the team.  Involve employees in decisions; ask them to help make decisions through
consensus and collaboration.  Make room for fun. Celebrate successes and recognize
when milestones are reached.  Write a mission statement every department. Everyone
wants to feel that they are working toward a meaningful, worthwhile goal. Work with staff
to develop a departmental mission statement, and then publicly post it for everyone to
see.