One of the biggest challenges facing employers is employee retention. This is because increasing competition requires personnel to become involved in activities which are stressful and must continually meet the demands of cliental. These problems require staff members to work more and engage in a variety of activities. This creates higher levels of burnt out with many often leaving for better opportunities elsewhere. (Robinson, 2014)
A good example of this can be seen with a study that was conducted by Robinson (2014). He found that employee turnover averages between: 30% to 60% annually. In the case of managers, the median turnover rate is 25% yearly. This is problematic, as firms will often spend tremendous amounts of money, time and resources training personnel to perform a variety of tasks. Once someone leaves, is when they must go through these expenses all over again. The challenge is to reduce turnover rates and decreases the losses a firm is taking. This hurts their fiscal position and it increases liabilities exponentially. The purpose of this report is to examine what other companies are doing to improve employee retention. (Robinson, 2014)
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What is forcing employees to leave?
Employee retention programs are an important part in helping to keep valuable staff members and reduce costs. To achieve these objectives firms must utilize unique practices to reach out to cliental. According to Howard (2009), there are several different strategies which the most successful companies are utilizing to connect with employees and offer them something more. The most notable include: extrinsic rewards, constituent attachments, advancement opportunities, organizational prestige and commitment. These areas are showing how firms must offer staff members with something more in order to show how they care about them. When this happens, employees will feel a sense of satisfaction by having their basic needs met. At the same time, they are treated with respect versus as a tool to achieve the organization’s overall objectives. (Howard, 2009)
Moreover, Zhao (2009) conducted a study of 24 different Canadian companies. His main focus was on understanding which variables influence the way employees looked at the firm and their ability to connect with executives inside the organization. He determined that there were several variables which were most common in all employees. These include: having strong corporate culture and effective hiring / promotions / training practices. (Zhao, 2009)
At the same time, those companies with the lowest amounts of turnover will have an organizational mission, goals / direction, employee recognition, rewards and compensation packages. This helps to provide staff members with something more which is not available at competitors. When this happens, they are able to effectively reach out to them and connect with everyone. (Zhao, 2009)
These insights are illustrating how firms need to take a different approach when it comes to employee rewards. Once this occurs, is the point they can more effectively connect with each person and deal with critical issues. That is leading to higher levels of employee turnover in those firms who do not reach out to their employees. (Zhao, 2009)
What are the most effective companies doing to retain employees?
The most successful firms will utilize a number of strategies in conjunction with each other. The most notable include: Maslow’s Theory of Needs and Hertzberg’s Theory of Motivation. Maslow’s Theory of needs is focusing deprivation and growth. Deprivation occurs at the lower ends of the spectrum under this model. The most notable include: psychological, social, esteem and self actualization. Growth takes place when the basic needs are met and the individual wants to have something that will help them to be more fulfilled as a person. Addressing the most basic requirements (i.e. psychological) will lead to the individual wanting to have a sense of accomplishment in their lives. (Dawson, 2011)
Hertzberg’s Theory of Motivation is concentrating on two areas to include: hygiene and motivation factors. Hygiene is the most basic level of motivating someone by addressing their basic requirements. While motivation, is seeking to have a greater sense of empowerment. This is similar to Maslow’s theory by showing, how their basic needs must be met to have greater levels of empowerment. While at the same time, it is different from Maslow’s concepts through having more levels to experience in order to have greater levels of fulfillment. As a result, the culture of the organization will have an impact on how employees see the firm and the attitudes that are embraced. This is because they will often associate with others and share their opinions of the firm. For new employees, they will learn what the company is like and the way they are treating staff members. Over the course of time, this influences how someone will perform their job and if they think the work environment is conducive for them. (Dawson, 2011)
Summary
Clearly, the best firms will focus on offering employees with something more. This is achieved by understanding what their basic needs are and then addressing them through an effective rewards / compensation program. At the same time, they will establish practices which are supporting higher ethical standards and ensuring they are treated fairly. This reduces the chances of someone leaving the firm, as they will feel respected.
These activities will have a positive impact on staff members by shaping how they see the firm and the quality of products / services it is providing. In this case, everyone plays a central role in meeting these objectives in the longer term. At the same time, they can reduce their costs and improve productivity. This will help the firm to become more profitable by reducing their turnover rates. In many ways, one could argue that these are the keys the most successful corporations will use to attract and retain employees.
- Dawson, M. (2011). The Hospitality Culture Scale. International Journal of Hospitality Management, 30 (2), 290 – 300.
- Howard, M. (2009). Targeted Employee Retention. Human Resource Management, 48 (2), 269 – 288.
- Robinson, R. (2014). Thinking Job Embeddedness Not Turnover. International Journal of Hospitality Management, 36, 101 – 109.
- Zhao, J. (2009). An Exploratory Study of Canadian Lodging Properties. International Journal of Contemporary Hospitality Management, 21 (4), 437 – 458.
