Employee Retention vs. Turnover

Employee Retention vs. Turnover

K S VENKATARAMAN

Introduction

The days, when as a rule the employees stayed in the same company till retirement and superannuation, are gone. In past it was normal that a person joined a company and did not even think of leaving it till last. The idea of loyalty to the employer or to the institution was so strong that even difficult working conditions could not goad the employees to leave the company on their own. Only if the company was closed, seeking employment somewhere else was thought of as unavoidable, unpleasant necessity.

Apart from the loyalty factor, the employment market conditions also did not favor horizontal mobility of the employees. The differences in service conditions, including salary among the organizations were not very marked. They were there but were not so powerful to disturb the ‘settled’ and ‘contented’ attitude of the employees in general.

Days have changed. In all professions specialization has spread; this has increased the worth and bargaining capacity of the employees who have acquired special talents. There are facilities for the employees to develop talents and improve their chances. For example, let us assume that there is a DTP operator who knows only English; he may be one among 100000 DTP operators in the city. If he learns Tamil typewriting and can complete Tamil jobs, he is no longer one among 100000; he becomes one among 5000. If he takes some extra efforts and learns handling mathematical symbols, he becomes one among 1000. How can we expect him to stay in the first company that employed him as one among 100000 candidates? Here is a case in which the employee outgrows the company and has to leave in the interests of his self development.

Employee Retention is often spoken of as a barometer of an organization. The prohibitive cost of turnover is cited as a major reason for the special attention to be paid to Employee Retention. It is so far so good. Sometimes this factor receives so much emphasis making Employee Retention the touchstone of the efficiency of HRD of the organization. As a corollary, Employee Turnover is regarded a reflection upon the human resources management of the organization. There is a need to moderate this approach.

Employee Retention

I always refer to the steps an organization is bound to take for Employee Retention as five Cs. They are:

Camaraderie: This includes the employee-superior relationship as well as the interpersonal relationship with colleagues and subordinates.

Compensation plus: This includes salary and perquisites.

Culture: This includes the rigidity or flexibility of rules and regulations, the style of managing day-to-day affairs, chances for mingling, sports, club activities and so on.

Communication: This includes accuracy, decency, promptness, efficiency, and pleasantness.

Corporate Identity: The recognition and respect the employment gives to the employee is a major factor that would make him to stick on.

Conditions of Work-environment: The work, the load, existing credit system for achievement, guidance available, opportunities to learn and specialize, etc. are some of the decisive factors. Providing excellent environment, facilities, freedom of movement, pleasant, friendly and prosperous atmosphere, etc. matter a lot to the employees and make them think twice before deciding to leave the organization.

The same five Cs if not up to the expectation of the employee, become the reasons for Employee Turnover as well.

A down-to-earth analysis of all these factors would easily reveal that all of them have monetary implications; most of them directly and a few of them indirectly. So, there is a limit for any organization in stretching itself to achieve higher standards in this regard. No organization can allot infinite sums to its HRD wing to spend in these areas. The levels may differ but there is a level beyond which organizations could not go.

Employee Turnover

While all the possible steps could be taken to retain talented employees in the organization, the Employee Turnover cannot be completely avoided. Even at the higher echelons, the personnel may decide to move for considerations of money or prestige.

One of the basic tenets of Organizational Development is, ‘Ship is more than the crew’. Too much dependence on individual employees should not be allowed in any organization. It should always be a team work. It is true, all individuals would not be the same and some of them may display exceptional talents; they may contribute substantially. It is also true that if one of them decides to go away, the organization may have to find it difficult to straighten it out. But under no circumstance the organization should surrender its prestige.

The fact remains that the person now moving to a greener pasture, is able to do so only because he was part of the present organization so long.

This does not mean that the person leaving should be considered black sheep. I am only insisting that his departure should be taken in strides. Employee Turnover may cause some inconvenience but the organization should meet the challenge successfully and progress with confidence.

Usually, only the splashy cases in which the departure of an employee or executive caused some inconvenience to the parent organization are given prominence. For each case like this, there are dozens of cases in which the wanderer becomes disillusioned soon and have had to lick his wounds. Unfortunately, such cases are not taken for discussion. There are also cases where the departure of such persons turns out to be a blessing in disguise.

Employee turnover is a normal part of human resources management. There is nothing to feel so awkward about it. When it happens, exit interviews should be conducted properly and it has to be studied in detail; if any corrective measure needs to be taken up it should be done without delay. There it should end.

If adequate attention is given to Knowledge Management in the organization, the inconvenience caused by the departure of any employee could be minimized.

Employee Turnover: Employees Point of View

The improvements in science and technology have changed the concept of employment very much for the better. The world has become a global village. In view of the tremendous growth of IT and Communication, the work that waits to be done in the world could be shared more equitably among the various countries. This has also widened the scope of vertical and horizontal mobility.

The medieval loyalty that expected life-long binding with one’s employer is no longer relevant. So when a better opportunity presents itself, there is absolutely nothing wrong in moving to another organization. But in doing this, certain standards have to be observed.

The right to leave the present organization and join some other one cannot be disputed. But if the employees resort to this on vague considerations, they may have to feel bad afterwards. It is also important to give due notice to the present organization and cooperate in making the change smooth and less inconvenient. It would be a great help if the real reasons for leaving are communicated during the exit interviews.

If the movement to a new organization should be a milestone in a growing career, the employee should not speak ill of the organization he left; or work against its interests using the contacts and special knowledge gained while working there. Doing so may not be legally actionable but it is against the principles of Natural Justice.

K S Venkataraman is the Associate Editor, Dynamic Youth Online Magazine. He may be reached through e-mail: dynamicyouth_development@yahoo.com

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