Human Resource Planning and Retention
The employer-employee relationship is a mutual relation where both equally need each other. Therefore, where employees compete for certain jobs, employers also compete to retain certain type of employees. Employee retention is the part of human resource that may be defined as the ability of the organization to retain employees for maximum period of time. After years of ignoring it as an important issue, organizations have now realized its importance and are working to understand its pros and cons.
Why is retention important?
All the company stakeholders including HR has underestimated employee turnover since the beginning and this is the reason that it has become an issue in past decade for every type and size of organization.
1. Hiring the new recruit or the replacement is a time consuming process and the organization has to reinvest the time and money in new employee’s grooming.
2. Studies have also shown that people who have remained for longer in the organization develop a sense of belongingness with the organization and become loyal to it.
3. Employees with high potential ultimately help in meeting organizational goals and increasing profits and hence should be retained by the organization.
4. Employees working with the organization for some time have better understanding of the terms and policies of the organization and thus also adjust better.
Role of HR in retention
Human resource department of an organization plays an important role in employee retention:
● HR must conduct exit interview every time an employee leaves. Sometime there are reasons which are directly related to the profile of the employee, the atmosphere of the organization, behavior of the seniors or other team members or the work culture. The inputs may be used to improve situation for the current employees.
● A good recruitment process is also a part of employee retention. This may be the tricky part of HR’s job but finding the right employee who not only perfectly fits the organization but also enjoys what he does has increased possibilities of staying in the organization for long.
● In case an employee is leaving for better remuneration, then HR must try to negotiate better salary and other benefits to retain the employee. Hiring is not an easy process and is conducted by HR only.
● HR’s doesn’t completes at recruiting and negotiating with leaving employee; creating a healthy work environment and keeping employees motivated is also the part of their roles and responsibilities. Skill development trainings and extracurricular activities break the monotony of work and improve the employees’ comfort level.
● Performance analysis and rewarding the high performers not only improves the position of the rewarding employee but motivates others to perform better. Employees definitely stay longer where they are appreciated.
Challenges in employee retention
Human resource management assignment given to students in management schools at the end of the course aims at preparing students for various professional aspects. Although there are certain challenges that they face and resolve only after they actually start working in an organization. One such example is challenges in employee retention.
● Competition in market and the availability of number of other options sometimes makes it difficult for the organization to stop employees from exploring better opportunity which employee does not have with the current employer.
● Every organization has a budget for employees’ salaries at various grades and profiles. Negotiating the leaving employee sometimes become impossible if the employee demands too much of hike.
● There are some profiles that people opt seldom or they either require certain professional qualification which is again uncommon. These people tend to bargain more than their counterparts taking advantage of the exclusivity of their profile or degree.
● An organization also suffers a bad phase during which it is not in a position to pay the employees but need their support and loyalty. The organization cannot offer hikes, incentives and appraisals in this situation and ended up losing employees.
Effects of not retaining the employees
Even though employee turnover is underrated, it has some bad effects on the organization:
● Employees who join the competitors tend to take all the strategies, policies and ideas with them. This may also include important data, information and statistics.
● Every employee need some time to understand and absorb the new working environment which often interrupts the ongoing work flow for a while.
● Like frequently changing jobs puts question on the dedication and sincerity of the employee, increased employee turnover puts a question make on the stability and work culture of the organization. New people hesitate joining such organization as everyone looks for the job stability.
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