Retention Strategies

Employee retention is a form of savings in two senses: saving jobs and saving expenses-specifically, expenses associated with replacing an employee. Hence, retention strategies can be considered to be savings strategies. As such, they also represent an investment in retained employees. Retention strategies are, therefore, the plans that an organization has for investing in employees to ensure that they stay.

These retention investment strategies can take multifarious forms: investing in physical infrastructure (in the form of creating an attractive and safe work environment); policy deliberations and implementations that meet or surpass employee expectations; compensation packages; programs, e.g., educational, recreational, health, that address employee needs and desires, to name but a few.

Without a farsighted retention strategy, an organization may have to scramble after the loss of valued employees to find ways of preventing a recurrence. Like corps of civil construction engineers and holistic physicians, organizational managers should be tasked with the responsibility of preventing disasters (including retention problems) before they can happen, rather than adapting to them after the fact.
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Retention strategies are the plans that are enacted to increase employee retention, i.e., the percentage of employees who remain with an organization at the end of a specified period. Many organizations contract an outside entity, including retention consultants, to help them choose and implement these strategies; however, some organizations may choose to research, develop and implement strategies themselves.

Employee retention begins with the human resources department. By setting up rigorous hiring practices, the organization can help ensure that new hires will be a better fit for the organization. The human resources department should also properly train the new employees to palliate any frustration in being expected to perform above their current level. Managers should be proactive in keeping employees within the organization not only through compensation and incentives but also by creating a pleasant work environment.

Organizations should have plans for employee retention just as they would for finances, marketing, or succession. Having no plan is tantamount to inviting failure. Retention strategies keep an organization profitable by preventing a high turnover rate.

There are many strategies that an organization can implement. The organization should first review its hiring practices to see that they are bringing in the proper candidates. Then they should see whether the employees are adequately trained before taking the full responsibilities of their position. Managers should attend managerial classes, listen to employees, provide feedback, get to know their employees, allow employees to share in decision-making, resolve conflicts between employees, and institute traditions that help unify members of the organization. But above all, managers should treat employees equitably and respectfully.

Retention strategies should be reviewed and tested for consistency and completeness. For example, salary increases as a retention tactic may be nullified if the organization's accounting office urges cuts in employee support services or benefits, such as closing the company gym. In fact, the net consequence may be negative, since employees are, for psychological and mathematical reasons, very likely to respond more strongly to a loss of benefits than to a gain, if the two are comparable in perceived value (e.g., as a loss of $1,000 may register as "more important" than a gain of the same amount).

Completeness of retention strategies involves consideration of as many feasible employee incentives as budget, infrastructure, etc. allow for a given organization, although, in some instances, a single, outstanding incentive, e.g., extremely high wages, may be sufficient to ensure retention.
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