Employees play a very important role in every organization. Employees are considered to be the most valuable asset of the organization. It is important to protect this vital resource because the talented and motivated employees play a very important role in the overall growth and development of the organization, but the biggest problem faced by the BPO sector is the problem of attrition in this modern era. Attrition rate in BPO sector is much higher than the attrition rate in any other sector so it is very important to control this attrition rate. To control this attrition rate many retention schemes are applied in BPOs to retain the employees. A single method of training and development alone is not sufficient for employee retention. The best …show more content…
MEANING OF EMPLOYEE RETENTION
Employee retention refers to the various policies and practices which let the employees stick to an organization for a longer period of time. To retain the employees every organization invests a lot of time and money to groom a new joinee, make him a corporate ready material and bring him at par with the existing employees. So when a fully trained employee leaves the organization it brings a great loss to the employer. Employee retention takes into account the various measures so that an individual stays in an organization for the maximum period of time.
IV IMPORTANCE OF RETENTION
Employee Retention refers to the techniques employed by the management to help the employees stay with the organization for a longer period of time. Employee retention strategies go a long way in motivating the employees so that they stick to the organization for the maximum time and contribute effectively. Sincere efforts must be taken to ensure growth and learning for the employees in their current assignments and for them to enjoy their
…show more content…
Individuals once being trained have a tendency to move to other organizations for better salary and growth. Lucrative salary, better ambience, comfortable timings, growth prospects are some of the factors which prompt an employee to look for a change. Whenever a talented employee expresses his willingness to move on to other job, it is the responsibility of the employer and the human resource team to intervene immediately and find out the exact reasons leading to this decision.
1.The Cost of Turnover:
The cost of employee turnover adds thousands of money to a company's expenses. While it is difficult to fully calculate the cost of turnover (including hiring costs, training costs and productivity loss), industry experts often quote 25% of the average employee salary as a conservative estimate.
2.Loss of Company Knowledge:
When an employee leaves, he takes with him valuable knowledge about the company, current projects, customers, and even past history (sometimes to competitors). Much time and money has been spent on the employee in expectation of a future return. When the employee leaves, the investment is totally
Low wages means high turnover. That is a reality often discussed too little when analyzing the economic cost surrounding employees. When salaries are increased, employees show increased loyalty and turnover costs are reduced. In a 2006 paper published by the Harvard Business Review, Wayne Cascio a professor of Management at the University of Colorado demonstrates this effect using big chain retail stores.
For my second recommendation, in order to help with the problem with business having trouble with keeping employees motivated to work for them for longer, businesses should reward employees with bonuses if they stay for x amount of year(s). This will keep employees motivated to continue working at their place of employment and decrease turnover.
Employee retention strategies help organizations. They provide effective employee communication to improve commitment and enhance workforce support for key organization initiatives. Retention strategies build customer loyalty by distinguishing and positioning an organization’s unique products and services in today’s crowded marketplace.
Employee turnover costs are very costly to a company. Turnover not only affects the bottom line but also affects the company’s morale. We are analyzing the problems within our company that are causing our employees to become unsatisfied with their job. Then we are going to find solutions. And then do the cost estimates of the turnover costs and the turnover savings after our solutions are implemented.
Direct turnover costs are only the tip of the iceberg. In addition, the hidden cost of lost productivity for departing employees.
These people that remain are now the same people responsible for improving the profitability of the organization. Left to work in an environment where an employee feels they have no control over their future, none the less their day-to-day employment status. They are asked to continue to work, not knowing if they or one of their associates or colleagues will be in the next round of layoffs. They have to carry the guilt of being able to continue working while their friends and coworkers are now seeking employment elsewhere. This can have a dramatic negative effect on teamwork and one can see how a metaphor can be drawn between this and troops that go to war do not want to make friends with someone who may die the next day.
Employee satisfaction, employee turnover, and workplace environment are inseparably linked. Workplace environments heavily influence employee satisfaction, which directly affects employee turnover rates. When employees feel they are not being supported within their first months of hire, they will inevitably leave the company. Employees want to have the security that if they need assistance, someone will be there to guide them. Therefore, it is imperative for organizations to develop a thorough onboarding program and a long-term retention plan.
They include such things as loss in coaching. once worker leaves, he takes with them all the talents and information that were nonheritable at the value of nice time and expense to the corporate. additionally, once departments running understaffed; whereas management searches for replacements, the loss of productivity comes at an enormous value. If the corporate chooses to rent consultants to assist with the work within the interim, there's a hefty value concerned moreover. If employee's departure is caused by a serious management issue, there could also be prices related to the decline of the opposite team members' morale, or maybe worse, the corporate could lose multiple staff
Voluntary and involuntary turnover have an effect on organizations. Rapid changes in job descriptions, organizational structures, and inter-organizational competitiveness increase the importance of studying turnover and its relationship with organizational change. According to Leana and Van Buren (1999), "the loss of key network members can severely damage an organization 's social fabric and perhaps eradicate its social capital altogether." When businesses lose a high number of employees, problems can occur, costing the company time and money. Some of the costs incurred are associated with training, drug testing, physicals, and orientations to hire replacements that may take several months to learn the job and to achieve competency. There is a saying, “Good help is hard to find---and harder to keep”. This saying refers to good organizations trying to reduce turnover when the competition for retaining good employees is intense.
Davidson, M. C., Timo, N., & Wang, Y. (2010). How much does labour turnover cost? International Journal of Contemporary Hostpitality Management, 22(4), 451-466.
In cultures in which it is quite acceptable to change jobs every few years, employees can build the career they choose for themselves. They can stay with one company as long as it is mutually beneficial to the company and employee. As long as good relationship exists and the employee’s career is advancing at an acceptable pace, the employee can remain with a company. But at any time the employee is free to move to another company, perhaps to achieve a higher position, to move to a new area, or to find anew situation that is more suitable for his or her personality.
Employee satisfaction is undoubtedly the best predictor of employee retention. A job environment consisting of good working relationships usually fosters employee satisfaction. Employees feel motivated as they believe that the company is appreciating their service and commitment. Job satisfaction results in employee retention. Employee retention could be defined as the length of time employees stay with the organization.
673), retention management must be based on three types of turnover, voluntary, discharged, and downsizing. Not all businesses are freighted by turnovers, for some it is the way of life and cost is built into the budget. However, for others any type of high turnover can be detrimental for company profit, employee wage and benefits offered. First, let’s take a look at voluntary and involuntary turnover that affects retention. Voluntary turnovers are caused by many different reasons. Turnover may result from topics such as job dissatisfaction, job mismatching, knowing that job opportunities are plentiful. Two reasons that I will discuss more are micromanagement and employee loyalty. Like stated before in the introduction, when employees are dissatisfied, possibly due to being placed in an area that doesn’t fit with their skill set, one is more likely to seek new employment. Another part of turnover is discharging and downsizing. Discharge is just that, members being discharged due to discipline and job performance. While downsizing turnover is a result of business being overstaffed (Heneman III, Judge, Kammeyer-Mueller, 2015, pg. 675). There are also other reasons for voluntarily employee turnover, such as generation differences when it relates to employment. The current generations are more likely to see a job as one piece in their life puzzle rather than as the first, indispensable anchor piece without
Employee turnover in organization is one of the main issues that extensively affect the overall performance of a workplace (Tariq, Ramzan and Riaz, 2013). Various studies show that employee turnover negatively affect the overall efficiency at the organization (Tariq, Ramzan and Riaz, 2013). Xiancheng, (2013) mentioned the employee turnover is a method of personal issues who decided to stop associate with the company for better advantage. There are two types of turnover which are voluntary and involuntary turnover. Voluntary turnover can be defined as the termination of the official and the psychological contract between the employee and employer (Krausz, 2002; Macdonald, 1999; Mclean Parks et al, 1999; Rousseau, 1995) while involuntary turnover inescapably lead to direct negative results such as current job is insecurity, work difficulty, and status fluctuation (Gowan and Gatewood, 1997). However, other researchers such as Haven-Tang and Jones, (2012) concluded poor management, lack of salary, bad working environment and paucity of job opportunities could be the highest causes of turnover among organization. This statement was support by Kusluvan et al., (2010) where is they had stated that poor management, low payment of salary, work environment and lack of employees’ job opportunities on the organization will make employee want to quit from their job. Turnover intention situation will appear when labour had feeling that they want to quit from current job, so voluntary and involuntary turnover will become final stage for them as their decision (AlBattat and Mat Som, 2013) but it is different for researchers such as Mosadeghrad, Ferlie and Rosbenberg (2013) when they conclude that employee turno...
Because of this, many employees tend to leave when they have found a job with higher pay. This increases the training costs for their employees, as they tend to not stay for too long.