Retention is Better than New Recruitments

 

[Figure 1: Dreamstime]

Hom and Griffeth (1995) as cited by (Kamalaveni at al, 2019) “the process of encouraging employees to stay for a long period or till the project completion is termed as retention”. In current marketplace labor turnover becomes significant impact for companies to run the business smoothly.

Cost of Losing an employee

There are positive and negative impacts of new recruitments & let us discuss of negative impacts, which are crucial to company performance & growth.

Loss Productivity

Losing of a key person of operation will directly impact to the productivity of operation. It may take two years to reach existing productivity level to new employee (Smith, 2021). Also, it takes average four to six month to get settle new employee in position. This impacts to company efficiency and profitability.

Loss Engagement

When the turnover is high as well as leave of key person, impacts other employee’s feelings & they might get demotivate, which will impact to productivity.

Customer Service Drops & Errors

Losing of experienced person will impact to process of company & and, they have better idea and knowledge of customer requirements and what they are expect & losing of such employee will impact to customer service & make errors, which may lead to losing the customer even.

Cost of Recruitment

This is the cost of hiring include advertising, interviewing & hiring a person.

Fail to Find the Right Person

Even though the higher unemployment in country, recruit of right person has become a major challenge for organization. There are people who has enough & enough paper qualifications for job requirements, but when it comes to practical scenario have seen lot of people fail to perform their jobs even, they have enough academic qualifications. Especially the young generation commitment to work, understand of work, adjust to different work conditions & manage the pressure.

Training & Onboard Cost

Company needs to train new employees on job requirements as well as management time, which is costly. “Over two to three years, a business likely invests 10% to 20% of an employee's salary or more in training” (Smith, 2021).

Conclusion

[Figure 2: Dreamstime]

When consider above impacts it is always better to improve employee satisfaction and reduce labor turnover. Companies do lot of implementations to make loyal workforce & that would be the key to retention, such as,

• Offer attractive remuneration packages
• Introduced incentive schemes, bonuses
• Provide extra benefits, such as

Ø  Insurance

Ø  Transport

Ø  Meals

Ø  Welfare shops to purchase goods at low cost

• Arrange events to keep people motivate, such as,

Ø  Training programs

Ø  Development programs

Ø  Inhouse and out bound fun activities

Ø  Motivation programs

• Improve workplace environment
• Building and maintaining close relationship with employees
• Operates with open management process, such employees can reach hierarchy without barrier & share their ideas, suggestions

It is always better to offers extra benefits and keep employees satisfied on job & by doing create loyal workforce, which will benefitted company & also helps to reach its targets & goals with provide better customer service. 

References

Anon., 2022. DreamStime. [Online]
Available at: https://www.dreamstime.com/photos-images/employee-turnover.html
[Accessed 4 April 2022].

Kamalaveni at al, 2019. A REVIEW OF LITERATURE ON EMPLOYEE RETENTION. A REVIEW OF LITERATURE ON EMPLOYEE RETENTION, May, 4(4), p. 10.

Singh, S., 2016. Review of Literature on Influence of Job Satisfaction, Employee Compensation, working environment on Employee Retention. review_of_literature_on_employee_retention-with-cover-page-v2, 2(1), p. 1608.

Smith, G., 2021. Employee retention: The real cost of losing an employee. [Online]
Available at: https://www.peoplekeep.com/blog/employee-retention-the-real-cost-of-losing-an-employee
[Accessed 14 April 2022].