Human Resource Management: Employee Retention Analysis Report

This report, submitted by Shivam Pandey, Shreya Srivastava, and Tushar Jain, delves into the critical aspects of employee retention within human resource management. It emphasizes the shift in viewing employees as vital assets, analyzing the financial implications of employee turnover, including hiring costs, onboarding expenses, and knowledge gaps. The report highlights challenges such as remuneration dissatisfaction, competitive pressures, role mismatches, job monotony, and unrealistic expectations. It then outlines effective strategies, including aligning employees with appropriate roles, recognizing and rewarding contributions, conducting transparent performance appraisals, clearly communicating remuneration terms, delegating responsibilities to foster challenge and growth, providing continuous training and development, fostering a positive workplace environment to mitigate disputes, and conducting thorough exit interviews. The report offers a comprehensive overview of employee retention strategies and challenges.

HUMAN RESOURCE MANAGEMENT
Submitted by:
Shivam Pandey
Shreya Srivastava
Tushar Jain

IMPORTANCE AND CHALLENGES OF
EMPLOYEE RETENTION
Gone are the days when employees of an organization were considered to be a mere source of
manpower. For decades now, Human Resources are being increasingly recognized as the living
organism of the workforce. It is because of this reason that it becomes imperative to understand
the importance of not only acquiring, but also, retaining workforce in the organization. We look
at the need for customer retention, related problems and challenges, and finally, strategies and
solutions to facilitate the process:
THE NEED FOR EMPLOYEE RETENTION
1. Cost of hiring: Considerable financial and time resources are involved in the hiring
process- constantly updating job specifications and job descriptions, screening resumes,
interviews and selections, facilitation of training, et al. When an employee leaves the
organization, these substantial investments by the organization in its workforce are lost.
2. Turnover expenses: The onboarding of a new employee costs 50-200% of the
remuneration designated for the position. The cost and effort involved in familiarizing the
employees with the company rules, norms and culture as well as training and
developments costs contribute towards such figures.
3. Knowledge gap: The knowledge accumulated through the course of day-to-day
functioning in an organization, when not transferred, creates a gap in understanding.

When employees leave the organization, they take important information about the
enterprise with them.
4. Reduced Teamwork: With a high rate of turnover, it is hard to create teamwork and
bonding among the teams. As a result, productivity and efficiency suffers, also ruining
the grapevine. It is also a burden on the existing employees to train the newly selected
candidates.
5. Competitor dilemma: An organization always runs the risk of losing employees to
competitors who may benefit from the skills and acumen of the said employee.
6. Loyalty: Employees involved with an organization for a long time begin to feel a sense
of ownership towards the organization, as well as better understand the guidelines and
policies associated with it. Hence, they are more likely to adjust to the changes and
challenges of the job.
CHALLENGES OF EMPLOYEE RETENTION
The contemporary scenario is characterized by a ‘switch’ culture when it comes to jobs. This,
along with several other factors, poses a risk to the practice of workforce retention.

1. Remuneration dissatisfaction: Every employee has certain expectations associated with
his role. When his financial expectations aren’t met, it becomes a looming contributor to
turnover. The organization may find itself helpless because these expectations exceed the
budgetary allocations.
2. Competition: There is cut-throat competition among organizations to attract the best
talent. They may be willing to offer lucrative benefits that the said company cannot
afford. This gives an incentive to an employee to quit the organization for the coveted
benefits.
3. Mismatch of roles: There may be a difference between the initial expectations an
employee had about a job, and the job he ended up doing. It is to be noted that
sometimes, candidates may end up in a role, despite not being fit for it.
4. Job rotation: Jobs suffer from the threat of getting monotonous over time. Repetition of
any kind of work, no matter how interesting, becomes workaday after a certain point. If
the organization doesn’t provide opportunities for job rotation, employees may seek the
thrill outside the organization.
5. Unrealistic expectations: Sometimes, employees may have unrealistic expectations
regarding their roles or remunerations, while it is not possible for organizations to cater to
all their needs. In such cases, the employees may look for opportunities outside.

STRATEGIES FOR EMPLOYEE RETENTION
1. Right person for the right job: Candidates should be matched closely with job
descriptions and specifications, which, in turn, should also be crafted very carefully.
Matching of jobs and employees will ensure there is no turnover. The track record of
employees regarding turnover should also be taken into consideration.
2. Employee recognition: Employees should be recognized for their hard work, and their
contributions should be acknowledged and appreciated. Incentives, rewards, and cash
prizes are ways to reward efforts. Bonus shares and Employee Stock Options could be
provided to instill a sense of ownership towards the organization.
3. Performance appraisals: Performance of the employees should be done from time-to-
time. Their remuneration should be proportionate to the efforts of the job, and the process
should be transparent and fair to avoid allegations of nepotism, favoritism and partiality.
4. Discussions of remuneration: The terms of remuneration and perquisites should be
thoroughly discussed and communicated to the employees at the time of hiring to avoid
any problems or confusions.
5. Delegation: The responsibilities should be delegated in a way that the employee has
something challenging to work with, at all times. The team leader/senior manager should
make sure that projects are allocated in a way that suits the specialization of the employee
and makes work enjoyable and interesting for him.
6. Training and Development: It is important to consider the training and development
needs of the employees. They shouldn’t feel obsolete in the face of ever-dynamic work
environments, and their skills should be brought up to date, periodically and
continuously.
7. Workplace disputes: Conflicts in the workplace bring about negativity and reduce
productivity. Opportunities should be provided to the employees to come together as an
amiable group, both in an official as well as an unofficial capacity.
8. Background research: When an employee resigns, HR must find out the reason behind
it. This would give them an insight into what went wrong, and hence, opportunities to
make changes.