Components of Employee Retention
The inability to retain quality employees costs employees money in terms of time, lost productivity and the effort to recruit and train a new employee. However, company management can take a proactive approach to make the organization a better place to work. Effective retention practices don't just apply to existing employees. They typically begin even before a new employee walks in the door for her first day of work.
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Hiring Practices
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High retention often starts with effective hiring practices. According to The Rainmaker Group, a human resources consulting firm, a "Harvard Business Review" study indicates that 80 percent of employee turnover results from improper hiring practices. Therefore, companies that focus on improving their screening, interviewing and background-checking procedures may be able to drastically reduce employee turnover. Employers need to ensure that a new employee not only possesses the skills to perform a job, but also the personal attributes that allow him to fit into the organizational culture.
Growth Opportunities
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Employees want to feel that growth opportunities within the company are available. Growth opportunities may come in the form of advancement to positions offering more responsibility or the chance to manage others. Opportunities may also mean the ability to enrich an employee's present position by allowing her to take a more creative approach to the job or by adding more meaningful duties. Companies can encourage growth by offering additional training or educational opportunities, such as tuition reimbursement programs.
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Positive Culture
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A positive work culture makes employees feel they are appreciated by the organization and fosters an atmosphere of cooperation and teamwork. Appreciation can take the form of formal recognition, such as an award from management or even an occasional pat on the back from a supervisor. A positive work culture may result in a sense of community that may make employees feel they are part of a "family" and not an employee who is identifiable only by a number.
Compensation
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Employees want to receive competitive compensation that is in line with that offered by other companies in the same industry or that provide similar jobs. A regular employee appraisal system accompanied by appropriate wage increases provide employees with the opportunity to improve compensation based on their job performance. Strong fringe benefit programs that include items such as health insurance and retirement vehicles may also keep employees from jumping to another organization.
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