Human resource management (HRM) is the strategic and coherent approach to the of management an organization’s most valued assets – the people working there who individually and collectively contribute to the achievement of the objectives of the business. The terms “human resource management” and “human resources” (HR) have largely replaced the term “personnel management” as a description of the processes involved in managing people in organizations. Human Resource management is evolving rapidly. Human resource management is both an academic theory and a business practice that addresses the theoretical and practical techniques of managing a workforce.
The Human Resources Management (HRM) function includes a variety of activities, and key among them is deciding what staffing needs you have and whether to use independent contractors or hire employees to fill these needs, recruiting and training the best employees, ensuring they are high performers, dealing with performance issues, and ensuring your personnel and management practices conform to various regulations.
Activities also include managing your approach to employee benefits and compensation, employee records and personnel policies. Usually small businesses (for-profit or nonprofit) have to carry out these activities themselves because they can’t yet afford part- or full-time help. However, they should always ensure that employees have — and are aware of — personnel policies which conform to current regulations. These policies are often in the form of employee manuals, which all employees have.
Effective employee retention is a systematic effort by employers to create and foster an environment that encourages current employees to remain employed by having policies and practices in place that address their diverse needs. A strong retention strategy becomes a powerful recruitment tool. Retention of key employees is critical to the long-term health and success of any organization.
It is a known fact that retaining your best employees ensures customer satisfaction, increased product sales, satisfied colleagues and reporting staff, effective succession planning and deeply imbedded organizational knowledge and learning. Employee retention matters as organizational issues such as training time and investment; lost knowledge; insecure employees and a costly candidate search are involved. Hence failing to retain a key employee is a costly proposition for an organization. Various estimates suggest that losing a middle manager in most organizations costs up to five times of his salary.
Intelligent employers always realise the importance of retaining the best talent. Retaining talent has never been so important in the Indian scenario; however, things have changed in recent years. In prominent Indian metros at least, there is no dearth of opportunities for the best in the business, or even for the second or the third best. Retention of key employees and treating attrition troubles has never been so important to companies.
The Importance of Retaining Employee
The challenge of keeping employees: Its changing face has stumped managers and business owners alike. How do you manage this challenge? How do you build a workplace that employees want to remain with … and outsiders want to be hired into?
Successful managers and business owners ask themselves these and other questions because—simply put—employee retention matters: High turnover often leaves customers and employees in the lurch; departing employees take a great deal of knowledge with them. This lack of continuity makes it hard to meet your organization’s goals and serve customers well. Replacing employees costs money. The cost of replacing an employee is estimated as up to twice the individual’s annual salary (or higher for some positions, such as middle management), and this doesn’t even include the cost of lost knowledge.
Recruiting employees consumes a great deal of time and effort, much of it futile. You’re not the only one out there vying for qualified employees, and job searchers make decisions based on more than the sum of salary and benefits. Bringing employees up to speed takes even more time. And when you’re short-staffed, you often need to put in extra time to get the work done.
A steadfast philosophy that sets Employee Retention Strategies apart:
- Uses only research-based, theory-supported approaches to improving employee engagement. Avoided are gimmicks such as employee of the month, suggestion boxes, prizes or other “carrots.” While commonly used, these short-term fixes fail to produce genuine employee loyalty (more than 60 years’ of research tells us so!).
- Employs an easy-to-understand systems approach to ensure the root causes of turnover are addressed and the potential for lasting change unleashed.
- Customizes all activities to your organization’s unique history, current practices and strategic objectives. Also considered are challenges unique to your industry sector, competitive marketplace issues and talent shortages.
- Involves those responsible for implementing change in actually creating the change, ensuring input and improved shared understanding and support of all initiatives.
- Integrates hands-on, action-oriented approaches that enable organizations to move forward quickly and effectively
- Recognizes the research-proven role of no-cost strategies in developing the “glue” that builds employee loyalty and commitment.
- Brings to your organization leading-edge organization-development best practices to effectively and quickly build a retention-rich culture.
KEi’s EMPLOYEE RETENTION WHEEL
The first step to improving your employee retention is to understand why employees stay with their current employer. Many “experts” dwell on the reasons employees leave, which is not as important or revealing as the reasons they stay. Companies have tried many different programs and perks to hold onto good employees. However, studies show that these efforts are not enough to retain good employees when the support that is needed to achieve job success is not adequate.
Among the countless inducements offered, only those identified in the center of KEi’s Employee Retention Wheel™ are truly what give employees a consistent reason for saying “no thank you” when tempted with a “sweeter offer.” After years of study and experience, KEi has determined, and presented in the Retention Wheel, what factors do have the greatest impact on keeping employees. KEi has used this information to give employers the tools to meet the core needs that keep employees successful at their jobs, thus reducing the high costs associated with unwanted employee turnover.