Why Employee Retention is Important

Figure 1:work; source: (Vonnegut., 2009)

Employee retention refers to an employee's decision to stay with their current employer rather than seek out other employment. A company's turnover rate is the rate at which its employees leave for whatever reason. In the simplest terms, retention is an organization's strategy for preventing employee turnover. Retention rates, defined as the percentage of an organization's workforce that remains with the company after some period of time, are highly variable among industries and companies (BasuMallick , 2020).

Why employee retention matters to HR?

A complete human resource management strategy involves a plan to retain people your company recruited, onboarded, and trained. Business sense: Replacing an employee might cost half to double their annual income. Soft costs include company culture, employee satisfaction, and more. Companies that neglect staff retention pay dearly. Investing in staff retention and turnover risks pays off. They report greater sales, productivity, and morale. HR management systems efficiently handle employee retention strategies and data (HRMS). HR software assists with applicant management, onboarding, and employee engagement. The tools let you understand your turnover rate and follow the progress of any fixes ( Holliday, 2021).

Benefits of employee retention

Retaining employees involves more than just reducing the negative effects of turnover. As an added bonus, it provides avenues for enhancing the company's performance across a variety of important indices. Here are seven ways in which businesses may profit from developing and implementing staff retention strategies and practices ( Holliday, 2021).

What ultimately determines whether or not a business is successful in retaining its best employees is the policies and practices it puts in place to foster an environment where employees want to stay. According to (paulsen,2021)  Below are some of the advantages of retaining employees,

1.Reduced expenses

2. Improved morale.

3. increased efficiency

4.Increased customer satisfaction

5.Less time spent recruiting and training employees

6. Improved company culture.

7. Higher employee involvement.

8.Enhanced revenue and ROI

9. More employee expertise.


Figure 2: Benefits; Source : (Finn, 2021)


Strategies to improve employee retention

 1. Hire the right people.

2. Optimize the onboarding experience. 

3. Create a culture of recognition and feedback.

4. Develop your employees.

5. Act on insights from exit surveys.


Conclusion

Ghosh , P. (2021) What Is HRIS? System, Model, and Application |, What Is HRIS? System, Model, and Application | Spiceworks 1. Available at: https://www.spiceworks.com/hr/performance-management/articles/what-is-hris/ (Accessed: December 4, 2022).

Ankrah, E. and Sokro, E. (2012) “HUMAN RESOURCE INFORMATION SYSTEM AS A STRATEGIC TOOL IN HUMAN RESOURCE MANAGEMENT,” Problems of Management in the 21st Century, 5, pp. 6–7. doi: 10.33225/pmc/12.05.06.

Yasar, K. (2022) What is an HRIS (Human Resource Information System)?, HR Software. Available at: https://www.techtarget.com/searchhrsoftware/definition/HRIS (Accessed: December 4, 2022).

Mankin,  Nicole  (2022) What is the role of HRIS software in the strategic HRM? | Firmbee, Firmbee. Available at: https://firmbee.com/strategic-hrm (Accessed: December 4, 2022).

Hirsch, S. (2022) The 10 Best Human Resource Management Systems in 2022, Connecteam. Available at: https://connecteam.com/best-human-resource-management-systems/ (Accessed: December 4, 2022).

Paulsen, E. (2021) Why Employee Retention is Important, Why Employee Retention is Important. Available at: https://www.quantumworkplace.com/future-of-work/why-employee-retention-is-important (Accessed: December 5, 2022).


Comments

  1. W.M Dananjaya Jayaweera BandaraDecember 5, 2022 at 9:06 PM

    They encourage higher levels of engagement and productivity, which ultimately leads to a rise in income. They also encourage employees to stay with your business. Any retention strategy's primary objective is to reduce turnover as much as feasible.

    ReplyDelete
  2. Chamara RanasingheDecember 6, 2022 at 3:12 AM

    Good Article.in addition to that Other factors like emotional safety, team bonding, and mental wellness have equal weight in the employee retention , in addition to factors like salary, bonuses, and work-life balance.

    ReplyDelete

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