Employee Retention - Challenges


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There is a huge competition in the market for labor/employees. Businesses everywhere are looking to expand and are open for new positions. This means that, from an HR perspective, there’s a great deal of pressure for the organization to keep their most talented resources and provide them the best benefits to them for the benefit of the organization in a long run.

The challenging role of a HR is to keep the right resources in the right jobs while also acknowledging that employees are also capitalists. According to a research/survey, keeping people around is more important in HR now than ever. In today’s market there are many great opportunities and people are sure to shift from their current jobs if they think they can find something better.

Challenges in Employee Retention

In the current scenario, a major challenge for an organization is to retain its valuable and talented employees. The management can control the problem of employees quitting the organization within no time to a great extent but can’t put a complete full stop to it. There are several challenges to it.

Following are the challenges in Employee Retention −

  • Salary Dissatisfaction − Every employee has high salary expectations and this is one of the major reason, why an employee quits the organization. Retention becomes a problem when an employee quotes for an exceptionally high salary, which is beyond the budget of the organization. Every organization has a salary budget for every employee which can be raised to some extent but not beyond a certain limit.

  • Job Opportunities are high − There is a cut-throat competition to attract the best talent in the market. Companies go a long way to lure talented resources from their competitors. Availability of such lucrative offers make it difficult to retain good resources for long.

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  • Hiring the Wrong Candidate − Recruitment plays an important role, which is the future of any organization. A right candidate hiring will give a good future and a wrong candidate hiring will give a bad future. Candidates speak all kind of lies at the time of interviews for getting a job. It is only later doing people realize that there has been a mismatch and thus look for a change. And problems arise whenever a right candidate is into a wrong job.

  • No Job Rotation − Any employee gets bored, if he/she does the same job for years together. The job might be good and interesting in the starting phase, but soon, it could become monotonous. In this scenario, the management must go for a job rotation and provide such employees the opportunity to do something new. And if there is no job rotation, then such employees might look for other avenues.

  • Unrealistic Expectations of Employees − It is not possible for an organization to meet the expectations of all the employees. An employee must be mature enough to understand that one can’t get all the comforts at the workplace. Sometimes, when the unrealistic expectations of the employees are not met, they look for a job change.

Factors that Affect Employee Retention

Following factors affect Employee Retention −

  • Employees expect a well-defined Career Path which defines whether they will stay with the organization for a longer duration.

  • Every employee wants a good compensation and benefits from his job. Day by day, these expectations are going higher and higher. So, compensation is one of the major for affecting employee retention in any organization.

  • Employees gradually develop a cordial rapport with their employers over a period of time. It is like a comfort factor. This professional relationship is critical to ensure employee retention.

  • Almost 80 to 90 percent of the employees in any organization come from middle-class background and they seek job security. But in the present scenario, there are layoffs, downsizing and organizational re-structuring, which are affecting the employee retention and loyalty, which in turn makes the employees look for other opportunities.

  • Work environment should be good and healthy, which will create a beautiful place to work for. Workplace or work environment will affect in retaining employees. Employee, who are treated as the assets to the organization, continue to stick with the company for a long time.

  • Every employee should be recognized and appreciated for his/her great work performance. This will pamper the employee and he/she gets motivated. If not, the employee gets demotivated and look for another job, which affect the employee retention.

  • Every employee should be treated equal and the information should be transparent. This will build a trust among the employees in the organization. If there is no transparency and no fair reviews about the performance of the employee, then this could lead to employee dissatisfaction and for quitting the job.

Effective HR functions can help ensure that every employee establishes a long-term association with the company beyond the paycheck. And while offering a good paycheck is important, companies need to go that extra mile to make sure their attrition rate is low.

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