Employee Retention Programs Examples – Understanding the risks of employee retention and implementing strategies to reduce attrition rates are fundamental aspects of human resource management – and for good reason. The cost of employee turnover is extremely high and affects not only operational costs, but also revenue, productivity, company culture, user experience and more.
Despite the detrimental impact that high turnover can have on an organization, many companies still do not prioritize employee retention. Those who have invested in improving it, however, have seen significant results in many critical areas.
Employee Retention Programs Examples
Employee retention refers to the strategies and processes an organization develops to retain its best talent and reduce the risk of employee turnover.
Effective Employee Retention Strategies For 2023
Managing the workforce management challenge for many organizations and human resources (HR) professionals, creating significant operational costs for employers and threatening their growth and profits.
According to the U.S. Bureau of Labor Statistics, average employee turnover rates vary by industry, from less than 20% in public sector roles to more than 60% in professional services and construction. Certain sectors that typically employ large numbers of entry-level workers, part-timers, seasonal workers and students, such as retail, restaurants and hotels, are particularly vulnerable to extreme cutbacks.
Individuals leave their employers for a variety of reasons, including finding another or better job, moving, going back to school, or retiring. Some were fired or laid off. While these are all examples of turnover, focus on employee retention
America’s big business loses at least $1 trillion a year to voluntary layoffs, which most of the workers who leave say their managers or organizations can prevent.
Human Resources Manager Job Description [updated For 2023]
A comprehensive human resource management strategy includes a well-thought-out plan to retain the valuable employees your organization needs to recruit, hire and train. It makes business sense: the cost of replacing an employee can range from half to twice the employee’s annual salary. Company culture, employee satisfaction and other soft costs also add up.
Companies that do not prioritize employee retention are clearly paying a high price. However, those who invest in improving employee retention and addressing the risks of turnover will reap significant returns. Sales growth, increased productivity and quality of work, and higher employee morale were reported.
Employee retention initiatives and related data can be managed most effectively with a Human Resource Management System (HRMS). A suite of HR software applications help with every step of the employee lifecycle, from candidate management to employee onboarding and engagement. The tool will help you understand your turnover rate and track the progress of any actions you take to address potential issues.
Employee retention is not just about minimizing the damage to the organization when employees leave. It also offers opportunities to improve the company’s performance across a number of key metrics. Here are 10 ways effective employee retention strategies and processes benefit organizations.
What Drives Employee Turnover? Part 2
Building a financially sound organization involves developing a structure that retains your best employees. Companies that do this reap significant rewards, including better business performance, increased productivity, better quality of work, greater employee satisfaction, and a better user experience.
Employee turnover costs—including recruiting, hiring, and training new workers—can amount to 50% to 60% of workers’ lost wages. Company culture, employee satisfaction and other soft costs also add up.
Positive employee experiences can increase employee engagement and satisfaction. Employees who feel respected and trusted, fairly paid and given the opportunity to use their skills are more likely to stay with their organization for the long term. Effective High Performance Work System (HPWS) A systematic set of HR practices that create an environment in which employees have greater involvement and responsibility for the success of the organization. is the name for a systematic set of HR practices that create an environment in which employees have greater involvement and responsibility for the success of the organization. High Performance Work Systems is a strategic approach to much of what we do in HR, including retention. Overall, HPWS keeps employees engaged in building, designing and implementing processes that are better for the business and for the employees, which increases retention. Figure 7.4 “HR Components of HPWS” shows an example of the role of HR in the creation of this system.
With the HPWS in mind, we can begin to develop a containment plan. The first step in this process is to understand some theories about job satisfaction and dissatisfaction. In addition, we may collect data on the current level of satisfaction of our employees. Then we can start implementing specific employee retention strategies.
Effective Employee Retention Strategies
There are several theories that try to explain what makes a satisfied and what makes a dissatisfied employee. Although you may have studied these theories in other classes such as organizational behavior, they are worth reviewing here to help us better understand employee satisfaction from an HR perspective.
The first step to developing a retention plan is to understand some theories about job satisfaction. One of the fundamental theories is the development of the theory of withdrawal from work developed by Dan Farrell and James Petersen. Dan Farrell and James C. Petersen, “Engagement, Absenteeism, and Turnover of New Employees: A Longitudinal Study,” Human Relations 37, no. 8 (August 1984): 681–692, accessed 26 August 2011, http://libres.uncg.edu/ir/uncg/f/J_Petersen_Commitment_1984.pdf. It is said that people develop a series of behaviors in sequence to avoid their work situation. These behaviors include behavioral changes, physical withdrawal, and psychological withdrawal.
In the area of behavior change, the employee will first try to change the situation that causes dissatisfaction. For example, if an employee is not satisfied with the management style, he may consider changing departments. During the physical withdrawal phase, the employee does one of the following:
If an employee cannot leave his work situation, he will experience psychological withdrawal. They will become disengaged and may show little work involvement and commitment to the organization, which can result in significant costs to the organization such as dissatisfied customers.
Employee Retention Strategies Article
Between 1927 and 1932, Elton Mayo conducted a series of experiments at the Western Electric Hawthorne Works in Illinois. Elton Mayo, The Social Problems of Industrial Civilization (1949; repr., New York: Arno Press, 2007). Mayo developed this experiment to determine how physical and environmental factors in the workplace, such as lighting and free time, would affect employee motivation.
These are some of the first studies conducted on human motivation at work. The results were surprising, as he found that worker productivity increased regardless of which experiment was performed. The conclusion and explanation for this is the simple fact that workers are happy to have the attention of researchers who are interested in them. As a result, this experiment, which was supposed to last for one year, was extended for five years in order to add to the knowledge base of human motivation.
The implications of this research still apply to HR professionals and managers today. This tells us that our retention plans must include training and other activities that make employees feel valued.
In 1943, Abraham Maslow developed the so-called theory of human motivation. Abraham Maslow, Toward a Psychology of Being, 3rd ed. (New York: Wiley, 1999). His theory was developed in an attempt to explain human motivation. According to Maslow, there is a hierarchy of five needs and if one level of need is met, it will no longer be a motivator. In other words, people start at the bottom of the hierarchy and work their way up. Maslow’s hierarchy consists of the following:
Pdf) A Study Of Employee Retention
Physiological needs are our most basic needs, including food, water and shelter. Safety needs at work may include a sense of safety in the actual physical environment or job security. As humans, we have a basic need to spend time with other people. The need for esteem refers to the need to feel good about ourselves. Finally, the need for self-actualization is the need to improve.
For example, the results of his research tell us that as long as an employee’s physiological needs are met, a raise may not be a motivation. It is also necessary to motivate employees at work by fulfilling all needs. Needs may include, for example, fair pay, safety standards in the workplace, opportunities to socialize, praise to help boost our self-esteem, and training opportunities for further development.
, Frederick Herzberg, Bernard Mausner, and Barbara Bloch Snyderman, Motivation to Work (New Brunswick, NJ: Transaction Publishers, 1993). which describes his study to determine which aspects of the work environment lead to satisfaction or dissatisfaction. Conducts interviews in which employees are asked what makes them happy and unhappy at work. From his research, he developed a theory of motivation and hygiene to explain these results.
Things that satisfy employees are motivators, while dissatisfaction is a hygiene factor. He also said that hygiene factors are not necessarily a motivator, but if they are not present in the work environment, they actually cause demotivation. In other words, hygiene factors are expected and assumed, while these factors are not necessarily motivational.
How Workplace Design Strategy Impacts Employee Retention
His research lists the following six main motivational factors: Part of the theory developed by Herzberg, which states that certain things motivate an employee, such as taking responsibility. :
The following are the six most important hygiene factors. Part of the theory he developed
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