Employee Retention - Importance


Retention of a positive and motivated employee is very important for the organization's success. High employee turnover increases the expenses and also has a negative impact on the organization’s morale. Implementation of an employee retention program is an effective way of making sure that the pivotal workers remain employed while balancing and maintaining job performance and productivity.

  • Recruitment Enhancement − Effective retention strategies often begin during the employee recruitment process.

  • Employee Turnover Management − Employers implement retention strategies to manage employee turnover and attract quality employees.

  • Performance and Productivity Maintenance − Employee retention practices help support an organization’s productivity.

  • Cost Effective − An organization can significantly get benefit from employee retention programs because of a direct effect on an employer’s strategies.

  • Increases Morale − Employees who enjoy what they do and the atmosphere in which they work are more likely to remain employed with their organization over a longer period of time.

Increasing Morale

Retaining a Valuable Employee is Essential

The organization and management should understand the difference between a valuable employee and an employee who does not contribute much to the organization. Sincere efforts must be made to encourage the employees so that they stay happy in the current organization and do not look for a change.

  • An organization invests time and money in grooming an individual and make him ready to work and understand the corporate culture.

  • An employee, who resigns from the present organization, may join the competitor.

  • It is essential for the organization to retain the valuable employees showing potential.

  • The employees working for a longer period of time are more familiar with the company’s policies, guidelines and thus they adjust better.

  • Hiring is not an easy process.

  • It has been observed that individuals staying in an organization for a longer time are more loyal towards the management and the organization.

Adverse Effects of Poor Employee Retention

Following are some of the adverse effects of poor employee retention −

  • Loss of Company Knowledge − When an employee leaves, he takes with him valuable knowledge about the company, customers, current projects and past history.

  • Interruption of Customer Service − Customers and clients do business with a company in part because of the people. Relationships are developed that encourage continued sponsorship of the business.

  • Regaining efficiency − If an employee resigns, then a good amount of time is lost in hiring a new employee and then training him. It is expensive and leads to a temporary loss in efficiency.

When a senior member decides to leave the organization, its effect can be felt throughout the organization, which in some cases, leads to more resignations.

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