Literature Review On Employee Retention

Introduction: The most important asset of any business is its employees. Employee retention involves a systematic effort by the organization to create a climate that addresses diverse employee needs so employees will remain with the company. It is not only important to have the most talented employees but it is equally necessary to be able to retain them for long term future benefits. Talent retention is critically important for all organizations for two main reasons. Firstly, turnover is expensive. Secondly, top performers drive business performance. Estimated financial impacts from turnover fluctuate depending on industry, position, and location, estimates range from 30% to 250% of annual salary.1 The impact of quality performers was crystallized

The following are some of the key factors that are to be considered in order to develop an effective retention strategy and ensure employee retention.

1) Picking the Right Talent: One way to cut turnover is to hire the right people. Begin with a thorough analysis of what the different roles in an organization require with regard to knowledge, skills and abilities (KSA’s). Assess the prospective employees to find whether the job, team and corporate culture your organization is offering meet their needs and tap into their strengths.

2) On boarding and Orientation: Induction plays a key role in employee retention and increases loyalty towards the organization. Mostly employees leave within first three months of joining so it is clear that if proper induction is not done they will tend to leave the organization.

3) Training: There is a direct relation between training and employee retention. Employees undergoing training believe that their employer is interested in them and wants them to do a better job. That the employer cares enough about them to make an investment in their

Rewards can be monetary as well as non monetary. Similarly the recognition they receive from bosses, team members, coworkers and customer enhance the job satisfaction thereby reducing turnover. Reward and recognition gives the employees an impression that they are valued in the organization.

9) Leadership: The most critical idea for staff retention and commitment depends on an effective leadership setup in the company. Leaders help in keeping the culture and team building of the organization intact. Employee’s perception regarding an organization is also strongly influenced by their relationship with the supervisor.

10) Image and Culture of the organization: Image of the company and culture plays a major role in employee retention and commitment in the organization.

11) Communication and Participation: Organizations should have open and good communications in place so that if any grievances can be acted upon immediately. Open communication process and negotiation instills in the employees a sense of belief and confidence in the organization. Similarly collaborating in problem solving and decision making also help in reducing