EMPLOYEE RETENTION STRATEGY

Introduction

One of the most important drivers of productivity and sustainable economic growth in developed economies is the quality and stability of its workforce (Chiboiwa et al., 2010). The failure to maintain a reasonably stable workforce through an effective employee retention strategy will result in a very high employee turnover, low productivity and poor company image.
The ability of any organisation to perform optimally varies directly with the knowledge, skills and attitudes of its employees or manpower. It’s a well known fact that 80% of the outputs in majority of business organisations are the outcome of the efforts of about 20% of all employees. These 20% are referred to as the high flyers. The present and future success of any organisation therefore depends on its ability to retain a reasonable proportion of its high flyers over a long period of time.

Employee Retention Defined

Retention is a voluntary move by an organisation to create an environment which engages employees for a long term (Chaminade, 2007). The main purpose of retention is to prevent the loss of competent employees from leaving the organisation as this could have adverse effect on productivity and profitability (Samuel and Chipunza, 2009). A well designed and purposeful executed employee retention strategy will result in a very low employee turnover.

The way a business organisation reward, treat, develop and motivate its workforce will determine whether these employees will stay with the organisation well enough or not. All organisational activities geared towards the employees should be designed towards encouraging them to remain committed to the organisation and its long term goals and objectives.

Employee Retention Strategies

There are so many strategies that organisations can utilize to retain good and committed employees for as long as desired. Some of these time tested strategies are identified below.

1. Competitive reward system: Reward means what employees receive in exchange for their contributions to the organisation. This reward could be in form of salary, promotions, benefits and incentives. When the reward are perceived by the employees as fair, just and equitable in comparison with what obtains in other similar organisations, they are motivated to stay with the organisation for a reasonable period of time. To retain quality talents the reward system must be competitive.
2. Becoming an employer of choice: An employer of choice is one for whom people want to work (Armstrong, 2003). To become an employer of choice you have to develop the reputation of your company as a company that meets the need of all its stakeholders through excellent result. This is achievable through quality goods and services, ethical behaviour, excellent employment conditions, opportunities for career growth and development, job security, learning opportunities and highly competitive pay and benefits.
3. Improved work-life balance: An employer that will retain talent is the one that recognise the fact that employees also have a life of their own outside work. Such an organisation tends to structure its activities in such a way that does not affect employee’s personal time for their family, leisure, personal growth and development. This strategy has the potential for improving employees’ work-life balance. To retain good employees at work, their needs outside work must be met through quality work-life balance.
4. Develop internal social ties: There should be excellent social interaction and ties among employees. Company policies should encourage internal social relationship among employees by encouraging interpersonal relationship that goes beyond work among employees. Employees should be encouraged to get personal with one another. Superiors should also be encouraged to be concerned about the personal life and welfare of their subordinates and vice versa. Loyalty to companies may be disappearing but loyalty to colleagues is not (Cappelli, 2000).
5. Learning opportunities: Special priority should be given to the provision of learning opportunities aimed at developing the skills, knowledge and capabilities of employees at work. There should also be room for career growth and advancement within the organisation so as to encourage employees’ retention. Employees can only stay with an organisation that provides them with opportunities for learning, growth and development.

Conclusion

Investment in employee retention is good but the reality about employee retention strategy is that ‘the market’ and not ‘the company’ will ultimately determine the movement of employees. No matter how sophisticated an organisation’s retention strategy is, it may still be unable to prevent its employees from attractive opportunities and aggressive recruiters in the market place. Therefore the employers long term retention strategy should focus on influencing who leaves and when.



References:

Armstrong, M (2003): A Handbook of Human Resource Management Practice, 9th edn, Kogan Page, London.

Bevan S, Barber, I and Robinson, D (1997) Keeping the best: A practical guide to retaining key employees, Institute of Employment Studies, Brighton.

Capelli, P (2000): A market-driven approach to retaining talent, Harvard Business Review, Jan-Feb, pp 103-111.

Chaminade B (2007). A retention checklist: how do you rate?

Malvern W. Chiboiwa, Michael O. Samuel and Crispen Chipunza (2010): An examination of employee retention strategy in a private organisation in Zimbabwe, African Journal of Business Management Vol. 4(10), pp. 2103-2109, 18 August, 2010.

Samuel MO, Chipunza C (2009). Employee retention & turnover: using motivational variables as a panacea, Afr. J. Bus. Manage. 3(8): 410-415.


About the author
Ajiboro Ayodeji is a Chartered HR Practitioner based in Lagos, Nigeria. Tel: 2348027807452. Email: jibdej@gmail.com.