Introduction

If employees are to be products, their shelf-lives are getting shorter

In the best of worlds, employees would love their jobs, like their coworkers, work hard for their employers, get paid well for their work, have ample chances for advancement, and flexible schedules so they could attend to personal or family needs when necessary. And never leave. But then there's the real world. And in the real world, employees, do leave, either because they want more money, hate the working conditions, hate their coworkers, want a change, or because their spouse gets a dream job in another state. So, what does that entire turnover cost? And what employees are likely to have the highest turnover? Who is likely to stay the longest?

Employee turnover is becoming a serious problem in todays corporate environment as the economy continues to expand and the labor market continues to tighten .Retention and turnover are economic issues and corporations have a financial incentive to retain top employees. A major portion of a corporations wealth is invested in its intellectual capital-the knowledge, skills and abilities of their employees. Companies lose money when these employees walk out the door.

Employee Retention refers to policies and practices companies use to prevent valuable employees from leaving their jobs. Nowadays, businesses often find that they spend considerable time, effort and money to train an employee only to have them develop into a valuable commodity. Employee retention involves taking measures to encourage employees to remain in the organization for the maximum period of time.There are different Employee

Retention strategies which companies are using nowadays like including employees in decision-making, allow team members to share their knowledge with others, effective Performance Appraisal system, providing opportunity for career and succession planning and career Development Programs, Quality of supervision and mentorship, Recreational facilities among others.

Perception is understood as the Act of seeing what is there to be seen. But what is seen is influenced by the individual, the object and the situation. Perception of the Employees in the organization can change on the basis of Environment, situation, Perception of employees towards employees may change or influenced by the Employee Retention strategies. An opinion is a subjective belief, and it is the result of emotion or interpretation of facts.

Employee retention refers to the ability of an organization to retain its employees. Employee retention can be represented by a simple statistic (for example, a retention rate of 80% usually indicates that an organisation kept 80% of its employees in a given period). However, many consider employee retention as relating to the efforts by which employers attempt to retain employees in their workforce. In this sense, retention becomes the strategies rather than the outcome.

In a Business setting, the goal of employers is usually to decrease employee turnover, thereby decreasing training costs, recruitment costs and loss of talent and organizational knowledge. By implementing lessons learned from key organizational behavior concepts employers can improve retention rates and decrease the associated costs of high turnover. However, this isn't always the case. Employers can seek "positive turnover" whereby they aim to maintain only those employees who they consider to be high performers.

Needs & Importance of Employee Retention

Hiring is not an easy process: The HR Professional shortlists few individuals from a large pool of talent, conducts preliminary interviews and

eventually forwards it to the respective line managers who further grill them to judge whether they are fit for the organization or not. Recruiting the right candidate is a time consuming process.

An organization invests time and money in grooming an individual and make him ready to work and understand the corporate culture: A new joinee is completely raw and the management really has to work hard to train him for his overall development. It is a complete wastage of time and money when an individual leaves an organization all of a sudden. The HR has to start the recruitment process all over again for the same vacancy; a mere duplication of work. Finding a right employee for an organization is a tedious job and all efforts simply go waste when the employee leaves.

When an individual resigns from his present organization, it is more likely that he would join the competitors: In such cases, employees tend to take all the strategies, policies from the current organization to the new one. Individuals take all the important data, information and statistics to their new organization and in some cases even leak the secrets of the previous organization. To avoid such cases, it is essential that the new joinee is made to sign a document which stops him from passing on any information even if he leaves the organization. Strict policy should be made which prevents the employees to join the competitors. This is an effective way to retain the employees.

The employees working for a longer period of time are more familiar with the companys policies, guidelines and thus they adjust better: They perform better than individuals who change jobs frequently. Employees who spend a considerable time in an organization know the organization in and out and thus are in a position to contribute effectively. Every individual needs time to adjust with others: One needs time to know his team members well, be friendly with them and eventually trust them. Organizations are always benefited when the employees are compatible with each other and discuss things among themselves to come out with something beneficial for all. When a new individual replaces an

existing employee, adjustment problems crop up. Individuals find it really difficult to establish a comfort level with the other person. After striking a rapport with an existing employee, it is a challenge for the employees to adjust with someone new and most importantly trust him. It is a human tendency to compare a new joinee with the previous employees and always find faults in him.

It has been observed that individuals sticking to an organization for a longer span are more loyal towards the management and the organization: They enjoy all kinds of benefits from the organization and as a result are more attached to it. They hardly badmouth their organization and always think in favor of the management. For them the organization comes first and all other things later.

It is essential for the organization to retain the valuable employees showing potential: Every organization needs hardworking and talented employees who can really come out with something creative and different. No organization can survive if all the top performers quit. It is essential for the organization to retain those employees who really work hard and are indispensable for the system.

The management must understand the difference between a valuable employee and an employee who doesnt contribute much to the organization. Sincere efforts must be made to encourage the employees so that they stay happy in the current organization and do not look for a change.

Lack of support from management can sometimes serve as a reason for Employee Retention. Supervisor should support his subordinates in a way so that each one of them is a success. Management should try to focus on its employees and support them not only in their difficult times at work but also through the

times of personal crisis. Management can support employees by providing them recognition and appreciation. Employers can also provide valuable feedback to employees and make them feel valued to the organization.

Lack of support from management can sometimes serve as a reason for employee retention. Supervisor should support his subordinates in a way so that each one of them is a success. Management should try to focus on its employees and support them not only in their difficult times at work but also through the times of personal crisis. Management can support employees by providing them recognition and appreciation. Employers can also provide valuable feedback to employees and make them feel valued to the organization. Employee retention is a process in which the employees are encouraged to remain with the organization for the maximum period of time or until the completion of the project. Employee retention is beneficial for the organization as well as the employee. Employees today are different. They are not the ones who dont have good opportunities in hand. As soon as they feel dissatisfied with the current employer or the job, they switch over to the next job. It is the responsibility of the employer to retain their best employees. If they dont, they would be left with no good employees. A good employer should know how to attract and retain its employees. Retention involves five major things:

Compensation Compensation constitutes the largest part of the employee retention process. The employees always have high expectations regarding their compensation packages. Compensation packages vary from industry to industry. So an attractive compensation package plays a critical role in retaining the employees. Compensation includes salary and wages, bonuses, benefits, prerequisites, stock options, bonuses, vacations, etc. While setting up the packages, the following components should be kept in mind:

Salary and monthly wage: It is the biggest component of the compensation package. It is also the most common factor of comparison among employees. It includes Basic wage House rent allowance Dearness allowance City compensatory allowance

Training and development: Employees should be trained and given chance to improve and enhance their skills. Many employers fear that if the employees are well rained, theyll leave the organization for better jobs. Organization should not limit the resources on which organizations success depends. These trainings can be given to improve many skills like:

Communications skills Technical skills In-house processes and procedures improvement related skills Special project related skills

Need for such trainings can be recognized from individual performance reviews, individual meetings, employee satisfaction surveys and by being in constant touch with the employees.

Support Lack of support from management can sometimes serve as a reason for employee leaving. Supervisor should support his subordinates in a way so that each one of them is a success. Management should try to focus on its employees and support them not only in their difficult times at work but also through the times of personal

crisis. Management can support employees by providing them recognition and appreciation. Employers can also provide valuable feedback to employees and make them feel valued to the organization. The feedback from supervisor helps the employee to feel more responsible, confident and empowered. Top management can also support its employees in their personal crisis by providing personal loans during emergencies, childcare services, employee assistance programs, counseling services, etc.Employers can also support their employees by creating an environment of trust and inculcating the organizational values into employees. Thus employers can support their employees in a number of ways as follows: By providing feedback By giving recognition and rewards By counseling them By providing emotional support

Relationship Sometimes the relationship with the management and the peers becomes the reason for an employee to leave the organization. The management is sometimes not able to provide an employee a supportive work culture and environment in terms of personal or professional relationships. There are times when an employee starts feeling bitterness towards the management or peers. This bitterness could be due to many reasons. This decreases employees interest and he becomes de-motivated. It leads to less satisfaction and eventually attrition. A supportive work culture helps an employee grow professionally and boosts employee satisfaction. To enhance good professional relationships at work, the management should kept the following point in mind:

Respect for the individual: Respect for the individual is the must in the organization. Relationship with the immediate manager: A manager plays the role of a mentor and a coach. He designs ands plans work for each employee. It is his duty to involve the employee in the processes of the organization. So an organization should hire managers who can make and maintain good relations with their subordinates.

Relationship with colleagues Promote team work, not only among teams but in different departments as well. This will induce competition as well as improve the relationships among colleagues. Recruit whole heartedly: An employee should be recruited if there is a proper place and duties for him to perform. Otherwise hell feel useless and will be dissatisfied. Employees should know what the organization expects from them and what their expectation from the organization is. Deliver what is promised.

Promote an employee based culture: The employee should know that the organization is there to support him at the time of need. Show them that the organization cares and hell show the same for the organization. An employee based culture may include decision making authority, availability of resources.

Individual development: Taking proper care of employees includes acknowledgement to the employees dreams and personal goals. Create opportunities for their career growth by providing mentorship programs, certifications, educational courses, etc.

Induce loyalty: Organizations should be loyal as well as they should promote loyalty in the employees too. Try to make the current employees stay instead of recruiting new ones.

Organization Environment It is not about managing retention. It is about managing people. If an organization manages people well, employee retention will take care of itself. Organizations should focus on managing the work environment to make better use of the available human asset in the organisation which helps organization to achieve the goal. People want to work for an organization which provides Appreciation for the work done Ample opportunities to grow A friendly and cooperative environment Organization environment includes Culture Values Company reputation Quality of people in the organization Employee development and career growth Risk taking Leading technologies Trust

Types of environment the employee needs in an organization Learning environment: It includes continuous learning and improvement of the individual, certifications and provision for higher studies, etc. Support environment: Organization can provide support in the form of work-life balance. Work life balance includes:

Flexible hours Telecommuting Dependent care Alternate work schedules Vacations Wellness

Work environment It includes efficient managers, supportive co-workers, challenging work, involvement in decision-making, clarity of work and responsibilities, and recognition. Lack or absence of such environment pushes employees to look for new opportunities. The environment should be such that the employee feels connected to the organization in every respect. Now that so much is being done by organizations to retain its employees, why is retention so important? Is it just to reduce the turnover costs? Well, the answer is a definite no. Its not only the cost incurred by a company that emphasizes the need of retaining employees but also the need to retain talented employees from getting poached.

The process of employee retention will benefit an organization in the following ways:-

The Cost of Turnover: The cost of employee turnover adds hundreds of 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.

Loss of Company Knowledge: When an employee leaves, he takes with him

valuable knowledge about the company, customers, current projects and past history (sometimes to competitors). Often much time and money has been spent on the employee in expectation of a future return. When the employee leaves, the investment is not realized.

Interruption of Customer Service: Customers and clients do business with a company in part because of the people. Relationships are developed that encourage continued sponsorship of the business. When an employee leaves, the relationships that employee built for the company are severed, which could lead to potential customer loss.

Turnover leads to more turnovers: When an employee terminates, the effect is felt throughout the organization. Co-workers are often required to pick up the slack. The unspoken negativity often intensifies for the remaining staff.

Goodwill of the company: The goodwill of a company is maintained when the attrition rates are low. Higher retention rates motivate potential employees to join the organization.

Regaining efficiency: If an employee resigns, then good amount of time is lost in hiring a new employee and then training him/her and this goes to the loss of the company directly which many a times goes unnoticed. And even after this you cannot assure us of the same efficiency from the new employee

The basic practices which should be kept in mind in the employee retention strategies are: 1) Hire the right people in the first place.

2) Empower the employees: Give the employees the authority to get things done. 3) Make employees realize that they are the most valuable asset of the organization. 4) Have faith in them, trust them and respect them. 5) Provide them information and knowledge. 6) Keep providing them feedback on their performance. 7) Recognize and appreciate their achievements. 8) Keep their morale high. 9) Create an environment where the employees want to work and have fun.

Reasons for attrition

It is not easy to find out as to who contributes and who has the control on the attrition of employees. Various studies/survey conducted indicates that every one is contributing to the prevailing attrition. Attrition does not happen for one or two reasons. The way the industry is projected and speed at which the companies are expanding has a major part in attrition.

The specific reasons for attrition are varied in nature and it is interesting to know why the people change jobs so quickly. Even today, the main reason for changing jobs is for higher salary and better benefits. While attrition cannot be attributed to employees alone, let us look at some of the possible reasons:

1.Organizational matters The employees always assess the management values, work culture, work practices and credibility of the organization. The Indian companies do have difficulties in getting the businesses and retain it for a long time. There are always ups and downs in the business. When there is no focus and in the absence of business plans, non-availability of the campaigns makes people to quickly move out of the organization.

2.Working environment Working environment is the most important cause of attrition. Todays Gen Next employees expect a professional approach and an international style working environment. They expect a friendly and learning environment. Employees look for freedom, good treatment from the superiors, good encouragement, friendly approach from one and all, and good motivation.

3.Job matters No doubt the jobs today bring lots of pressure and stress is high. The employees often switch jobs if there is too much pressure on performance or any work related pressure. It is quite common that employees are moved from one process to another. They take time to get adjusted with the new processes while few employees find it difficult to adjust and consequently leave. Monotony sets in very quickly and this is one of the main reasons for attrition. Job hopping is very common among youngsters who look at jobs as being temporary. Another commonly looked option is to move to such other process where there is little or no pressure of sales and meeting service level

agreements (SLA). The employees move out if there are strained relations with the superiors or with the subordinates or any slightest discontent.

4.Salary and other benefits Moving from one job to another for higher salary, better positions and better benefits are the most important reasons for attrition. The salaries and benefits offered by MNCs are generally higher than their Indian counterparts. The employees expect salary revision once in 4-6 months and if not they move to other organizations. Moving from one job to another for higher salary, better positions and better benefits are the most important reasons for attrition. The salaries and benefits offered by MNCs are generally higher than their Indian counterparts. The employees expect salary revision once in 4-6 months and if not they move to other organizations.

5.Personal reasons The personal reasons are many and only few are visible to us. They vary widely from getting married to relocating for health/family reasons. The next important personal reason is going for higher education. Health is another aspect, which contributes for attrition.The personal reasons are many and only few are visible to us. They vary widely from getting married to relocating for health/family reasons. The next important personal reason is going for higher education. Health is another aspect, which contributes for attrition.

6.Poaching The demand for trained and competent manpower is very high. Poaching has become very common. The rise in the number of placement agencies has led to a boom in poaching. Most of the organizations have employee referral schemes and this makes people to spread message and

refer known candidates from the previous companies and earn too.

7.Employees advocate One of the main reasons why employees leave companies is because of problems with their managers. An HR professional can be termed an employees advocate and a bridge between top management and employees at all levels. There is often a huge gap between HR professionals and employees in terms of understanding challenges and delivering requirements. HR sometimes does not really understand the problems associated with employees careers and jobs. The companys overall plans and strategies also depend on HR professionals as they voice employees problems and requirements. The HR department should have genuine interest in the employees welfare; it is responsible for making sure that their expectations are met. By doing this it is easier to meet the companys business targets. Employee Retention Connection Retention Model Employee Retention Connection's decades of applied organizational experience indicate three primary drivers of employee retention: 1: Stimulating Work

Variety of assignments Autonomy to make decisions Resources and support provided to do good work Opportunity to learn Feedback on results Understanding the significance of one's personal contributions

2: Motivational Leadership

Champion change and are open to new ideas Inspire a share vision of organization direction

Motivate and recognize contributions Develop the capabilities of others Model behavior that reflects organization values

3: Recognition & Reward

Say "Thank you" for a job well done Reinforce desired behaviors Create an emphasis and focus on recognition Celebrate successes Build self-esteem Enhance camaraderie and teamwork

Integrated System for Retaining Employees The Employee Retention Connection transforms your organization culture and enhances your competitive edge through the following five-phased approach: Phase 1: ERC begins by analyzing your organization's motivation and retention culture through surveys and focus groups. What are the motivating and demotivating aspects of your culture? Phase 2: ERC next designs highinvolvement job and work assignments that include:

Wide variety of tasks and skills Opportunities to learn

Authority to make decisions Feedback on results Resources and support to be successful

Phase 3: ERC trains supervisors and managers in proven methods of motivational leadership:

Inspiring a shared vision and direction Developing the capabilities of others

Promoting organizational change Recognizing and appreciating employee contributions Serving as a role model

Phase 4: ERC delivers a plan for employee career paths and skill building:

Designing career paths, not necessarily up the organizational chart Identifying core competencies for different career paths Planning training and other opportunities to build competencies Mentoring for employee direction

Phase 5: ERC builds a tailored reward and recognition system to fit your organization's culture:

Identifying activities, attitudes and contributions to be recognized and rewarded Matching reward and recognition options to performance contributions Establishing specific motivational approaches for retaining employees

An organization cant survive if the top performers quit. It needs employees who are loyal and work hard with full dedication to achieve the organizations objective. It is essential for the management to retain its valuable employees who think in favour of the organization and contribute their level best. An employee who spends a longer duration at any particular organization is familiar with the rules, guidelines and policies of the organization and thus can adjust better.

The Human Resource team plays an important role in employee retention. Let us find out their role in the same:

Whenever an employee resigns from his current assignments, it is the responsibility of the HR to intervene immediately to find out the reasons which prompted the employee to resign. No one leaves an organization without a reason. There has to be one and the human resource team must probe into it. There can be innumerable reasons for

an employee to leave his current job. The major ones being conflict with the superiors, lesser salary, lack of growth, negative ambience and so on.

It is the duty of the HR to sit with the employee and discuss the various issues face to face. Understand his problems and listen to his side of the story as well. Remember the HR should not focus on conducting exit interviews, rather more emphasis should be laid on retaining the employees.

Try to provide a solution to his problem. Hiring is a tedious process and it is really very difficult to recruit the right candidate and train him once again. Do check the track record of the employee who wishes to move on. It is really essential for the management to retain those employees who have the potential and are really indispensable for the organization. If they leave and join the competitors; the organization would be at loss. If one feels that the employee is not very happy with his team leader, try to shift him to a new team. If the employee feels his salary is not justified, try to give him a hike but make sure he is worth it and you dont end up upsetting others.

The HR person must ensure that he is recruiting the right employee who actually fits into the role. A right person doing the wrong job would never find his job interesting and certainly look for a change. Make sure every individual has been assigned responsibilities according to his specialization and interest. The employee must be clear with their KRAs from the very beginning. Every individual works for money and the HR must quote a justified salary acceptable to the other person. Dont compel anyone to join at a lesser salary. He might join at that moment but would most likely quit after sometime. The hike should be on the present salary and must match the market trends and the expectations of the individual.

The human resource department must conduct motivational activities at the workplace. Organize various internal as well as external trainings which help the employees to learn something extra apart from their routine work. Make them participate in extracurricular activities important for their overall development. Encourage them to interact with each other so that the comfort level increases.

The HR must launch various incentive schemes for the top performers to motivate them. This way the employees feel important for the organization and strive hard to perform even better the next time. The employees who show promise should be awarded with cash prizes, lucrative perks and certificates to make the individual stand apart from the crowd. Send a mail wishing the employees on their birthdays or congratulating them when they perform exceptionally well or come out with something innovative. Arrange a small bouquet for them as a gift from the organizations side. This way the employees feel attached to the organization and are reluctant to look for a change. A friendly atmosphere is essential for the employees to feel safe and secure. Make them participate in various management decision making.

Performance reviews are a must. The HR along with the respective team leaders must monitor their team members performance to ensure whether they are enjoying the work or not. The employees look for a change only when their job becomes monotonous and does not offer any growth or learning. Job rotation can be one of the effective ways to retain employees.

The HR professional must try his level best to motivate the employees, make them feel special in the organization so that they do not look for a change.