Employee Retention Definition
What Is Employee Retention
For any company or organization to succeed, they need to be able to retain their best employees by keeping them focused and motivated enough. Given the tight talent market that exists these days, a serious concern among most business executives and HR professionals is retaining talent.
This is the ultimate goal of employee retention, whereby companies employ certain practices and policies to keep their best employees on board which also helps reduce the turnover rate.
Understanding Employee Retention
Companies and organizations generally spend a lot of resources to attract top-notch talent to join their team. Over time, these employees become an integral part of the company, given their skills and the kind of value they add to their job.
Such team members are hard to replace, so naturally, companies would want to hold on to them, and therefore, they employ certain strategies to make sure that they don’t leave and that they always remain motivated at the job.
These strategies could be anything from unique policies, compensation, office perks, an upgrade in position, and several other such benefits. The primary purpose here is to minimize employee turnover, which is described as the number of people or employees that leave a company in a year during a specific time period.
When businesses focus on employee retention, they can expect a plethora of benefits for both the employee and the entire organization, such as:
- It reduces employee turnover and prevents a large number of employees from leaving or switching to another job.
- It increases overall employee morale because when businesses retain their employees, they are actually building a strong team that has dedicated, motivated and satisfied employees. Eventually, these individuals become more comfortable, are less stressed out, have a stronger sense of community and belonging, develop better and strong relationships with people around them, and also make bigger and better contributions to the overall company culture.
- It reduces training time because when you keep your existing employees, you don’t necessarily have to find and hire new people. This saves a lot of time, money and efforts since you don’t have to invest anything in conducting interviews, training new employees, and bringing them on board. In other words, you can cut down the time spent on these long and tedious tasks.
- It boosts overall productivity and performance because employee retention also focuses on keeping current employees motivated and at their best.
- It helps save a great deal of money because turnover is super expensive and brings costs with it in the form of exit packages, loss of productivity, talent acquisition, recruitment, onboarding and training, loss of revenue, and overall downgraded customer experience to name a few. Employee retention, on the other hand, saves all these costs, saves time and gives businesses a chance to focus on other important things.
- It creates a sustained flow of productivity since professionals working for longer time periods in a company, or an organization have a thorough understanding of the company’s vision and mission, and they are able to add significant value as well.
In order to be able to achieve and enjoy all these benefits, organizations must employ the best strategies of employee retention, such as:
- Offering competitive salaries and proper basic benefits such as health insurance, wellness program discounts, paid time off, reimbursement accounts and life insurance, to name a few.
- A solid working environment where employees are comfortable, at peace and have zero issues.
- Career and training development, where organizations offer excellent training and learning opportunities to their employees, is very important for employee retention.
- A good retirement plan is often considered the second most vital thing after healthcare for employee retention. Retirement benefits are undoubtedly key to developing high levels of trust and loyalty in your employees.