employee retension

8/7/2019 Employee Retension

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Employee retention is a process in which the employees are encouraged to remain with the organization for or until the completion of the project. Employee retention is beneficial for the organiz

Employees today are different. They are not the ones who dont have good opportunities in hand. As soon ascurrent employer or the job, they switch over to the next job. It is the responsibility of the employer to rethey dont, they

would be left with no good employees. A good employer should know how to attract and retain its employees.

things:

Employee retention would require a lot of efforts, energy, and resources but the results are worth it.

CompensationCompensation constitutes the largest part of the employee retention process. The employees alwaysregarding their compensation packages. Compensation packages vary from industry to industry. So anpackage plays a critical role in retaining

Compensation includes salary and wages, bonuses, benefits, prerequisites, stock options, bonuses, vacup 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 thecomparison among employees. It includes

o Basic wageo House rent allowanceo Dearness allowanceo City compensatory allowance


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Salary and wages represent the level of skill and experience an individual has. Time to time increase in temployees should be done. And this increase should be based on the employees performance andorganization.

Bonus: Bonuses are usually given to the employees at the end of the year Economic benefits: It includes paid holidays, leave travel

Long-term incentives: Long term incentives include stock options or stock grants. These incentives helporganization's startup

Health insurance:Health insurance is a great benefit to the employees. It saves employees money as weof mind that they have somebody to take care of them in bad times. It also shows the employee that the the employee and its

After retirement: It includes payments that an Employee gets after he retires like EPF (EmployeMiscellaneous compensation: It may include employee assistance programs (like psychological counseldiscounts on company products, use of a company cars, etc.

Growth And CareerGrowth and development are the integral part of every individuals career. If an employee can not fo

development in his current organization, there are chances that hell leave the organization as soon as

The important factors in employee growth that an employee looks

Work profile: The work profile on which the employee is working should be in sync with his capabilitiebe too low or too high.

Personal growth and dreams: Employees responsibilities in the organization should help him achieveOrganizations can not keep aside the individual goals of employees and foster organizations goals. Emplfor themselves and later on comes the organization. If hes not satisfied with his growth, hell not organization

Training and development: Employees should be trained and given chance to improve and enhance thefear that if the employees are well rained, theyll leave the organization for better jobs. Organization shouon which organizations success depends. These trainings can be given to improve many skills like:

y Communications skillsy Technical skillsy In-house processes and procedures improvement related skillsy C or customer satisfaction related skills


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y Special project related skillsNeed for such trainings can be recognized from individual performance reviews, individual meetings, empland by being in constant touch with the employees.

Support

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 difficulttimes 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 theorganization.

The feedback from supervisor helps the employee to feel more responsible, confident andempowered. Top management can also support its employees in their personal crisis byproviding personal loans during emergencies, childcare services, employee assistance

programs, counseling services, et al.

Employers can also support their employees by creating an environment of trust and inculcatingthe organizational values into employees. Thus employers can support their employees in anumber of ways as follows:

y By providing feedback

y By giving recognition and rewards

y By counseling them

y By providing emotional support

Importance of Relationship in Employee Retention Program

Sometimes the relationship with the management and the peers becomes the reason foran employee to leave the organization. The management is sometimes not able to providean employee a supportive work culture and environment in terms of personal orprofessional relationships. There are times when an employee starts feeling bitternesstowards the management or peers. This bitterness could be due to many reasons. Thisdecreases employees interest and he becomes de-motivated. It leads to less satisfactionand eventually attrition.

A supportive work culture helps grow employee professionally and boosts employeesatisfaction. To enhance good professional relationships at work, the management should

keep the following points in mind.

Respect for the individual: Respect for the individual is the must in the organization.

Relationship with the immediate manager: A manger plays the role of a mentor and a

coach. He designs ands plans work for each employee. It is his duty to involve the employeein the processes of the organization. So an organization should hire managers who can make


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and maintain good relations with their subordinates.

Relationship with colleagues: Promote team work, not only among teams but in differentdepartments as well. This will induce competition as well as improve the relationships amongcolleagues.

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. Employeesshould know what the organization expects from them and what their expectation from theorganization 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 hellshow the same for the organization. An employee based culture may include decisionmaking authority, availability of resources, open door policy, etc.

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

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

What Makes Employee Leave?

Employees do not leave an organization without any significant reason. There are certaincircumstances that lead to their leaving the organization. The most common reasons canbe:y Job is not what the employee expected to be: Sometimes the job responsibilities

dont come out to be same as expected by the candidates. Unexpected job responsibilitieslead to job dissatisfaction.

y Job and person mismatch: A candidate may be fit to do a certain type of job which

matches his personality. If he is given a jobwhich mismatches his personality, then he wont be able to perform it well and will try tofind out reasons to leave the job.

y No growth opportunities: No or less learning and growth opportunities in thecurrent job will make candidates job and career stagnant.

y Lack of appreciation: If the work is not appreciated by the supervisor, theemployee feels de-motivated and loses interest in job.

y Lack of trust and support in coworkers, seniors and management: Trust isthe most important factor that is required for an individual to stay in the job. Non-supportive coworkers, seniors and management can make office environmentunfriendly and difficult to work in.

y Stress from overwork and work life imbalance: Job stress can lead to work lifeimbalance which ultimately many times lead to employee leaving the organization.

y Compensation:Better compensation packages being offered by other companiesmay attract employees towards themselves.

y New job offer: An attractive job offer which an employee thinks is good for himwith respect to job responsibility, compensation, growth and learning etc. can lead


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an employee to leave the organization.

Employee Retention Strategies

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.

These practices can be categorized in 3 levels: Low, medium and high level.


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Retention Myths

The process of retention is not as easy at it seems. There are so many tactics andstrategies used in retention of employees by the organizations. The basic purpose of thesestrategies should be to increase employee satisfaction, boost employee morale hence

achieve retention. But some times these strategies are not used properly or even worse,wrong strategies are used. Because of which these strategies fail to achieve the desired

results.There are many myths related to the employee retention process. These mythsexist because the strategies being used are either wrong or are being used from a long

time. These mythsprevent the employer from successfully implementing the retention strategies. Let us learn

about some of these myths.

1. Employees leave an organization for more pay: Money may be the motivating factorfor some but for many people it is not the most important factor. Money mattersmore to the low-income-employees for whom its a survival issue. Money can makean employee stay in an organization but not for long. The factors more importantthan money are job satisfaction, job responsibilities, and individuals skilldevelopment. The employers should understand this and work out some other ways

to make employees feel satisfied. When employees leave, management tries toretain them by offering more money. But instead they should try to figure out the


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main reason behind it. Issues that are mainly the cause of dissatisfaction areorganizations policies and procedures, working conditions, relationship with the

supervisor and salary, etc. For such employees, achievement, growth, respect,recognition, is the main concern.

2. Incentives can increase productivity: Incentives can surely increase productivity butnot for long term. Cash incentives, volume work targets and speed awards are old

management beliefs. They can generate work speedily and in volumes but cantboost employee commitment. Rather speed can hamper the quality of workproduced. What really glues employees to their work and organization is qualitywork, meaningful responsibilities, recognition, respect, growth opportunities andfriendly supervisors.

3. Employees run away from responsibilities: It is a myth that employees run fromresponsibilities. In-fact employees feel more responsible if they are given extraresponsibilities apart from their regular job. Employees look for variety, greatercontrol on the processes and authority to take decisions in their present job. Theywant opportunities to learn and grow. Management can assign extra responsibilitiesto their employees and appreciate them on the completion of these tasks. This willinduce a sense of pride in the employee and will improve the relationship betweenthe management and the employee.

4. Loyalty is a thing of the past: Employees can be loyal but what they need is anemployer for whom they can be loyal. There is no reason for the employee to hop

jobs if hes satisfied with the employer.

5. Taking measures to increase employee satisfaction will be expensive for theorganizations: The things actually required to improve employee satisfaction likerespect, career growth and development, appreciation, etc. cant be bought. Theyare free of cost. An employer or management that reacts well to the employeesideas and suggestions is enough for the employees to be retained.

Benefits Of Attrition

Attrition is not bad always if it happens in a controlled manner. Some attrition is alwaysdesirable and necessary for organizational growth and development. The only concern ishow organizations differentiate good attrition from bad attrition. The term healthyattrition or good attrition signifies the importance of less productive employeesvoluntarily leaving the organization. This means if the ones who have left fall in thecategory of low performers, the attrition in considered being healthy.

Attrition rates are considered to be beneficial in some ways:

y If all employees stay in the same organization for a very long time, most of themwill be at the top of their pay scale which will result in excessive manpower costs.

y When certain employees leave, whose continuation of service would have negativelyimpacted productivity and profitability of the company, the company is benefited.

y New employees bring new ideas, approaches, abilities & attitudes which can keepthe organization from becoming stagnant.

y There are also some people in the organization who have a negative anddemoralizing influence on the work culture and team spirit. This, in the long-term, is


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detrimental to organizational health.

y Desirable attrition also includes termination of employees with whom theorganization does not want to continue a relationship. It benefits the organization inthe following ways:

o It removes bottleneck in the progress of the companyo It creates space for the entry of new talentso It assists in evolving high performance teams

y There are people who are not able to balance their performance as perexpectations, lack potential for future or need disciplinary action. Furthermore, asthe rewards are limited, business pressures do not allow the management to over-reward the performers, but when undesirable employees leave the company, thegood employees can be given the share that they deserve.

Some companies believe attrition in any form is bad for an organization for it means that a

wrong choice was made at the beginning while recruiting. Even good attrition indicates lossas recruitment is a time consuming and costly affair. The only positive point is that therealization has initiated action that will lead to cutting loss.

Retension Success Mantras

Retention Success Mantras

Transparent Work Culture

In todays fast paced business environments where employees are constantly striving to

achieve business goals under time restrictions; open minded and transparent work cultureplays a vital role in employee retention.

Companies invest very many hours and monies in training and educating employees.These companies are severely affected when employees check out, especially in the middleof some big company project or venture. Although employees most often prefer to stay

with the same company and use their time and experience for personal growthand development, they leave mainly because of work related stress and dissatisfactions.

More and more companies have now realized the importance of a healthy work culture andhave a gamut of people management good practices for employees to have that ideal freshwork-life. Closed doors work culture can serve as a deterrent to communication and trustwithin employees which are potential causes for work-related apathy and frenzy.

A transparent work environment can serve as one of the primary triggers to facilitateaccountability, trust, communication, responsibility, pride and so on. It is believed that in atransparent work culture employees rigorously communicate with their peers and exchangeideas and thoughts before they are finally matured in to full-blown concepts. It inducesresponsibility among employees and accountability towards other peers, which graduallybuilds up trust and pride. More importantly, transparency in work environment discourageswork-politics which often hinders company goals as employees start to advance theirpersonal objectives at the expense of development of the company as a single entity.

Employees comprise the most vital assets of the company. In a work place where employeesare not able to use their full potential and not heard and valued, they are likely to leave


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because of stress and frustration. In a transparent environment while employees get a senseof achievement and belongingness from a healthy work environment, the company is

benefited with a stronger, reliable work-force harboring bright new ideas for its growth.

Quality OfWork

The success of any organization depends on how it attracts, recruits, motivates, andretains its workforce. Organizations need to be more flexible so that they develop their

talented workforce and gain their commitment. Thus, organizations are required to retainemployees by addressing their work life issues.

The elements that are relevant to an individuals quality of work life include the task, thephysical work environment, social environment within the organization, administrative

system and relationship between life on and off the job.The basic objectives of a QWL program are improved working conditions for the employeeand increase organizational effectiveness.

Providing quality work life involves taking care of the following aspects:

Occupational health care: The safe work environment provides the basis for the person toenjoy working. The work should not pose a health hazard for the person. The employer andemployee, aware of their risks and rights, could achieve a lot in their mutually beneficialdialogue.

Suitable working time: Organizations are offering flexible work options to their employeeswherein employees enjoy flexi-timings for dedicating their efforts at work.

Appropriate salary: The appropriate as well as attractive salary has always been animportant factor in retaining employees. Providing employees salary at par with the othercounterparts of above that what competitors are paying motivates them to stick with thecompany for long.

QWL consists of opportunities for active involvement in group working arrangements orproblem solving that are of mutual benefit to employees or employers, based on labormanagement cooperation. People also conceive of QWL as a set of methods, such asautonomous work groups, job enrichment, and high-involvement aimed at boosting thesatisfaction and productivity of workers. It requires employee commitment to the

organization and an environment in which this commitment can flourish.

Providing quality at work not only reduces attrition but also helps in reduced absenteeismand improved job satisfaction. Not only does QWL contribute to a company's ability to recruitquality people, but also it enhances a company's competitiveness. Common beliefs supportthe contention that QWL will positively nurture amore flexible, loyal, and motivatedworkforce, which are essential in determining the company's competitiveness.

Supporting Employees

Organizations these days want to protect their biggest and most valuable asset and theywant to do this in a way that best suits their organizational culture. Retaining employees isa difficult task. Providing support to the employees acts as a mantra for retraining them.

Employers can also support their employees by creating an environment of trust andinculcating the organizational values into employees.


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The management can support employees directly or indirectly. Directly, they provide supportin terms of personal crises, managing stress and personal development. Management can

support employees, indirectly, in a number of ways as follows:

y Manage employee turnover: Employee turnover affects the whole organization interms of productivity. Managing the turnover, hence, becomes an important task. Aproactive approach can be adopted to reduce attrition. Strategies should be framed

in advance and implemented when the times arrives. Turnover costs should also betaken into consideration while framing these strategies.

y Become employer of choice: What makes a company an employer of choice? Isthe benefit it offers or the compensation packages it gives away to its employees?Or is it measured in terms of how they value their employees or in terms ofcustomer satisfaction? Becoming an employer of choice involves following a roadmap which tells where to go as a brand.

y Engage the new recruits: The newly hired employees are said to be leastengaged in the organization. Keeping them engaged is an important task. The freshtalent should be utilized to maximum before they start feeling bored in theorganization.

y Optimize employee engagement: An organizations productivity is measured notin terms of employee satisfaction but by employee engagement. Employees are saidto be engaged when they show a positive attitude toward the organization andexpress a commitment to remain with the organization. Employee satisfaction alsocomes with high engagement levels. So, organizations should aim to maximize the

engagement among employees.

y Coaching and mentoring: Employees whose work performance suffers due topoor interpersonal relationships or because of lack of interpersonal skills should be

provided proper coaching by their superiors. Planed coaching sessions help anindividual to work through issues, maximize his potential and return to peak


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performance.

Feedback

Feedback acts as a channel of communication between the employee and his manager.The amount of information employees receive about how well or how poorly they haveperformed is what we call feedback. It is a dialog between a manager and an employeewhich acts as a way of sharing information about the performance. It suggests where theemployee performance is effective and where performance has to improve.

Managers can provide either positive feedback or negative feedback to employees. Thisfeedback helps the employee

assess his performance and identify the improvement areas.

Positive feedback communicates managerial satisfaction. Positive recognition for goodperformance boosts up morale of employees and results in performance improvement to a

higher productivity level. It is believed that positive feedback is the only type of feedbackthat generates performance above the minimum acceptable level.

Negative feedback obviously communicates managers dissatisfaction. However, negativefeedback sometimes make employee to put more efforts to improve his performance. But

such times are very rare. Moreover this improvement is short term.

Some managers do not provide any kind of feedback to their employees. Due to nofeedback, employees may assume that they are performing productively or they may feelthat the manager is satisfied with their performance. Studies reveal the performance tendsbe same or even decreases if no feedback is provided.

Thus, feedback is necessary because:

y It builds trust and enhances communication between manager and employee.y It gives managers and employees a way to identify and discuss skills and strengths.y Positive feedback leads to employee retention and motivation.y It helps in identifying performance areas that need improvement and specific ways

to improve them.

y It acts as an opportunity to enhance performance by identifying resources for skilldevelopment.

y It is an opportunity for managers and employees to assess and identify career andadvancement opportunities.

y It helps employees to understand the effectiveness of their performance andcontributes to their overall knowledge about the work

Managers have tendency to ignore good performances of their employees. Providing nofeedback may demotivate employees and may lead to employee absenteeism. Input from


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managers side is necessary as it help employees to improve their performance and increaseproductivity.

Communication Between Employee andEmployer

Communication is a process in which a message is conveyed to the receiver by the sender.The message may be or may not be in a common format or language that both the sender

and receiver understand. So there is a need to encode and decode the message in theprocess. Encoding and decoding also helps in the security of the message. The process ofcommunication is incomplete without the feedback.

Communication is the solution to almost everything in this world. Same applies toemployee retention also.

Straight-from-the-shoulder communication is what the employees need from theiremployers. Employees look for organizations where communication and process are

transparent. Nothing is hidden and shared with the employees.

There are 3 categories of employees:


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y A: Who will leave their current employer in 3 years of their employmenty B: Who have a probability of leaving their current employer in next 3 yearsy C: Who will stay with their current employer in the next 3 years

Category A: These are the employees who lack communication with their employers.

Category C: These are the employees who have proper, well structured communication withtheir employers.

Communication is also the way to win the employees trust in the organization. Employeestrust the employers who are friendly and open to them. This trust leads to employee loyaltyand finally retention. Employers also feel that the immediate supervisors are the mostauthenticated and trusted source of information for them. So the organizations should hiremanagers who are active communicators.

Communication mediums

y Open door policy: Organizations should support open door policies so that theemployees feel comfortable and are able to express their doubts and feeling to their

employers.

y Frequent meetings and Social gatheringsy Emails, Newsletters, Intranet and many more

So there should be effective communication across the organization and this communicationshould be two-way. Communication alone can lead to unimaginable heights of employeeretention.

Managing Employee Retention

The task of managing employees can be understood as a three stage process:

1. Identify the cost of employee turnover2. Understand why employee leave3. Implement retention strategies

Identify the cost of employee turnover:The organizations should start with identifying the employee turnover rates within aparticular time period and benchmark it with the competitor organizations. This will help inassessing the whether the employee retention rates

are healthy in the company. Secondly, the cost of employee turnover can be calculated.According to a survey, on an average, attrition costs companies 18 months salary for eachmanager or professional who leaves, and 6 months pay for each hourly employee wholeaves. This amounts to major organizational and financial stress, considering that one outof every three employees plans to leave his or her job in the next two years.

Understand why employees leave:Why employees leave often puzzles top management. Exit interviews are an ideal way ofrecording and analyzing the factors that have led employees to leave the organization. Theyallow an organization to understand the reasons for leaving and underlying issues. Howeveremployees never provide appropriate response to the asked questions. So an impartial


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person should be appointed with whom the employees feel comfortable in expressing theiropinions.

Implement retention strategy:Once the causes of attrition are found, a strategy is to be implemented so as to reduceemployee turnover. The most effective strategy is to adopt a holistic approach to dealingwith attrition. An effective retention strategy will seek to ensure:

y Attraction and recruitment strategies enable selection of the right candidate foreach role/organization

y New employees initial experiences of the organization are positivey Appropriate development opportunities are available to employees, and that they

are kept aware of their likely career path with the organization

y The organizations reward strategy reflects the employee driversy The leaving process is managed effectively

How To Increase Employee Retention

Companies have now realized the importance of retaining their quality workforce. Retainingquality performers contributes to productivity of the organization and increases morale amongemployees.

Four basic factors that play an important role in increasing employee retention include salaryand remuneration, providing recognition, benefits and opportunities for individual growth. Butare they really positively contributing to the retention rates of a company? Basic salary, thesedays, hardly reduces turnover. Today, employees look beyond the money factor.


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employee retention can be increase by inculcating the following practices:

1. Open Communication: A culture of open communication enforces loyalty amongemployees. Open communication tends to keep employees informed on key issues.

Most importantly, they need to know that their opinions matter and thatmanagement is 100% interested in their input.

2. Employee Reward Program: A positive recognition for work boosts themotivational levels of employees. Recognition can be made explicit by providing

awards like best employee of the month or punctuality award. Project basedrecognition also has great significance. The award can be in terms of gifts ormoney.

3. Career Development Program: Every individual is worried about his/her career.He is always keen to know his career path in the company. Organizations can offervarious technical certification courses which will help employee in enhancing hisknowledge.

4. Performance Based Bonus: A provision of performance linked bonus can be madewherein an employee is able to relate his performance with the company profits andhence will work hard. This bonus should strictly be productivity based.

5. Recreation facilities: Recreational facilities help in keeping employees away fromstress factors. Various recreational programs should be arranged. They may includetaking employees to trips annually or bi-annually, celebrating anniversaries, sportsactivities, et al.

6. Gifts at Some Occasions:Giving out some gifts at the time of one or two festivals


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to the employees making them feel good and understand that the management isconcerned about them.

Employers And Their Key Drivers To Attract

And Retain Talent

The Following table describes the Key Drivers to Attract And Retain Talent.

Employers Key Drives To Attract And Retain Talent

Procter and Gamble India

o Early responsibilities in careero Flexible and transparent organizational cultureo Global opportunities through a variety of

exposure and diverse experienceso Performance Recognition

American Express (India)

o Strong global brando Value-based environmento Pioneer in many people practices

NTPC

o Learning and growth opportunitieso Competitive rewardso Opportunity to grow, learn and implemento Strong social security and employee welfare

performance- oriented culture

Johnson & Johnson

o Strong values of trust, caring fairness, andrespect within the organization

o Freedom to operate at worko Early responsibility in careero Training and learning opportunitieso Visible, transparent and accessible leaderso Competitive rewardso Innovative HR programs and practices

Glaxo Smith KlineConsumer Healthcare

o Performance-driven Rewardso Its belief in Growing our own timbero Comprehensive development and learning

programso Flat organization, where performance could lead

to very quick progressiono Challenging work context


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o Competitive rewardso Exhaustive induction and orientation program

Tata Steel

o Organization philosophy and cultureo Job stabilityo Freedom to work and innovate

Colgate Palmolive India

o Company brando Open , transparent, and caring organizationo Management according to the managing with

respect to guiding principles

o Training ad development programso Structured career planning processo Global career opportunities

Wipro

o Companys brand as an employero Early opportunities for growtho High degree of autonomyo Value compatibilityo Innovative people program

Indian Oil Corporation

o Company brand imageo Work ethicso Learning and growth opportunitieso Challenging work assignmentso Growing organization

TCS

o The group brand equityo Strong corporate governance and citizenshipo Commitment to learning and developmento Best in people practiceso Challenging assignmentso Opportunity to work with fortune 500 clients

Retention Bonus

Higher attrition rates within a particular industry have forced companies to use someinnovative strategies to retain employees. Retention Bonus is one of the important toolsthat are being used to retain employees. Retention bonus is an incentive paid to anemployee to retain them through a critical business cycle. Retention bonuses are becomingmore common in the corporate world because companies are going through moretransitions like mergers and acquisitions. They need to give key people an attractiveincentive to stay on through these transitions to ensure productivity.

Retention bonuses have proven to be a useful tool in persuading employees to stay.


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A retention bonus plan is not a panacea. According to a survey, non-management

employees generally receive about 10 percent of their annual salaries in bonuses, whilemanagement and top-level supervisors earn an additional 50 percent of their annualsalaries. While bonuses based on salary percentages are the generally used, somecompanies choose to pay a flat figure. In some companies, bonuses range from 25 percentto 50 percent of annual salary, depending on position, tenure and other factors. Employees

are chosen for retention bonuses based on their contributions to management and thegeneration of revenue. Retention bonuses are generally vary from position to position andare paid in one lump sum at the time of termination. However, some companies pay ininstallments as on when the business cycle completes. A retention period can runsomewhere between six months to three years. It can also run for a particular project. A

project has its own life span. As long as the project gets completed, the employees whohave worked hard on it are entitled to receive the retention bonus. For example, theimplementation of a system may take 18 months, so a retention bonus will be offered after20 months.

Although retention bonuses are becoming more common everywhere, some industries aremore likely than others to offer them. Retail/wholesale companies are the most appropriateto implement stay-pay bonuses, followed by financial service providers and manufacturingfirms. Companies of all sizes use retention bonus plans to keep knowledge employeesretained in the company. To retain its key senior employees post merger with EDS

Corporation, Mphasis is providing cash component based retention bonus plan for itsemployees. This is mainly to retain good employees and provide them a cash incentive tokeep them motivated.

Hire Right Talent

employee retention starts with recruitment. Early departures arise from the wrongrecruitment process. Here are a few ways to ensure how to hire the right talent for aparticular job.

y Hire appropriate candidates.Hire candidates who are actually suitable for the job.For this the employer should understand the job requirements clearly. Dont hire underqualified or clearly overqualified candidates.

y Provide realistic job preview at the time of hiring: Mostly employees leave an

organization becausethey are given the real picture of their job responsibilities at the time of joining. Attritionrate can be reduced if a right person is hired for a right job.

Realistic preview of the job responsibilities can be given to the employment seekers byvarious methods like discussions, trial periods, internships etc.

y Clearly discuss what is expected from the employee:Before joining the organization,

tell the candidate what is expected from him. Setting wrong expectations or hidingexpectations will result in early leaving of employees.

y Discuss what the expectations of the employees are: Ask employees what they

expect from the organization. Be realistic. If their requirements can be fulfilled only then

promise them. Or tell them before hand that their requirements can not be fulfilled. Dontshow them an unrealistic picture.

y Culture fit: Try to judge individuals capability to adapt to the organizations culture. A

drastic change in the culture may give a culture shock to the candidate.

y Referrals: According to the research, referred candidates stay longer with the


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organization. There is a fear of hampering the image and reputation of the person whoreferred the candidate.

BPO Employee Retention

Attrition is the biggest problem faced by BPOs these days. Attrition rate in BPOs is morethan the attrition rate in any other sector. It is very important to control this attrition rate.Many retention schemes are applied in BPOs for retention.

A single tool like training alone is not sufficient for employee retention. The best results foremployee retention can be achieved by applying different tools strategically. Let us nowlearn about various strategies which can boost successful employee retention in BPOs.

1. First know the cost. This is the most basic and initial part of the retention process. Agood retention plan needs all the facts. The turnover cost includes cost of selectionprocess, hiring, induction, training, lost productivity, etc.

2. Hire from known sources like employee referrals through trustworthy employees.3. Hire the right people. Retention starts with recruitment itself. Identify the

characteristics of the people you want to hire who fit in organizations culture. Toretain employees, the people who are productive and are likely to stay for a longer

time should be hired.

4. Focus on employee orientation. It is the first impression that the employee takeshome with him. A proper welcome form the management will encourage theemployee to stay with the organization.

5. Individual development. Develop career plans for employees. Initiate mentorshipand higher education programs to keep the learning and development moving.

6. Training for managers. An important factor that keeps the employee in theorganization is the manager. Employees need a manager who manages them well. Amanager should be a good listener and motivator. Proper training should be given tothe managers.

7. Find the reason why employees are leaving. Conduct exit interviews with theemployees after 3-4 months of leaving the job. This is because most of theemployees would not like to reveal the true reason of quitting the job as long asthey are in the organization and are associated with the job. The exit interviews canbe conducted online. Then the employees can talk straight-from-the-shoulder.

8. Employee recognition. Star of the month, top performer, picture on bulletin boards,appreciation cards and certificates, etc, increase employee moral and confidence.This is a great way to retain employees of a call center.

Manager Role in Retention

When asked about why employees leave, low salary comes out to be a common excuse.However, research has shown that people join companies, but leave because of what their


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managers do or dont do. It is seen that managers who respect and value employeescompetency, pay attention to their aspirations, assure challenging work, value the quality

of work life and provided chances for learning have loyal and engaged employees.Therefore, managers and team leaders play an active and vital role in employee retention.

Managers and team leaders can reduce the attrition levels considerably by creating amotivating team culture and improving the relationships with team members. This can be

done in a following way:

y Creating a Motivating Environment: Team leaders who create motivatingenvironments are likely to keep their team members together for a longer period oftime. Motivation does not necessarily have to come through fun events such asparties, celebrations, team outings etc. They can also come through serious eventse.g. arranging a talk by the VP of Quality on career opportunities in the field ofquality. Employees who look forward to these events and are likely to remain moreengaged.

y Standing up for the Team: Team leaders are closest to their team members.While they need to ensure smooth functioning of their teams by implementingmanagement decisions, they also need to educate their managers about the realitieson the ground. When agents see the team leader standing up for them, they will

have one more reason to stay in the team.

y Providing coaching: Everyone wants to be successful in his or her current job.However, not everyone knows how. Therefore, one of the key responsibilities will beproviding coaching that is intended to improve the performance of employees.Managers often tend to escape this role by just coaching their employees. However,coaching is followed by monitoring performance and providing feedback on the

same.

y Delegation: Many team leaders and managers feel that they are the only peoplewho can do a particular task or job. Therefore, they do not delegate their jobs asmuch as they should. Delegation is a great way to develop competencies.

y Extra Responsibility:Giving extra responsibility to employees is another way toget them engaged with the company. However, just giving the extra responsibilitydoes not help. The manager must spend good time teaching the employees of howto manage responsibilities given to them so that they dont feel over burdened.

y Focus on future career: Employees are always concerned about their futurecareer. A manager should focus on showing employees his career ladder. If an

employee sees that his current job offers a path towards their future careeraspirations, then they are likely to stay longer in the company. Therefore, managersshould play the role of career counselors as well.

employee retension

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