Retention

Defining retention as the percentage of the total workforce who leave the organization every year can create misleading conclusions about an organization. For some time, the objective was to aim for the lowest possible turnover. Then came the movement to eliminate the bottom 20 percent of performers. However, in today’s tight labor market, the concern has shifted to retaining employees as long as possible.

Like quality, retention is best understood in the context of an organization, since measuring retention out of context is of little value. If an organization reported that its 1999 retention rate was 85 percent for all employees, what does that mean? Is 85 percent good, bad, or indifferent? There is simply no way to tell without further insight into the organization’s goals and business strategies. If the 1998 retention rate was 80 percent, did this organization improve or worsen in 1999? Again, without more information, it is impossible to know. The following questions must be addressed to place retention into a useable context:

•Who is leaving? Are clusters of employees accounting for your turnover? What is the level of employees who are leaving? Are they long-term or short-term employees? Do particular sections of your organization produce disproportionate turnover? Are those leaving among the employees you want to leave or vice versa?
•Why are they leaving? “More money” and “an exciting opportunity” are the most common answers when employees are asked the reason for their departure. Not only are these answers predictable, they are also safe. Who cannot understand the attraction of a higher income or increased opportunity? Because these answers are difficult to contradict, they are seldom challenged, and therefore may conceal the more relevant reasons that motivate employees to leave an organization.

Because the simultaneous change of both a job and an employer is a major life-altering event, people seldom undertake such a course of action lightly. How likely is it that someone would seriously disrupt his or her life for a 5 or 10 percent increase in income? Unfortunately, behind these standard answers lie the alienation, feelings of disenfranchisement, a sense of betrayal, perceived lack of appreciation and recognition, and physiological injuries that drive most employee turnover. To understand retention, you must first know the reasons behind why employees are leaving.

•Where are they going? Do your employees routinely benefit by leaving your organization? Are you training your competitors’ workforce? Why do the people who fail in your organization succeed in another? Answering these questions requires clarity about business goals and strategies and the expected role of HR management in implementing these business strategies.

The answers to these questions lead to a viable definition of retention:

Retention is the degree to which an organization keeps the workers it wants to keep and loses the workers it does not want to keep.

Using this definition, percentages alone are meaningless. Instead, their meaning lies in their relationship to predetermined goals, whose definition requires advanced planning and close involvement of staffing and HR with business management.

..................Content has been hidden....................

You can't read the all page of ebook, please click here login for view all page.
Reset
3.15.31.22