Organizationally committed employees will usually have good attendance records, demonstrate a willing adherence to company policies, and have lower turnover rates. In particular, their broader base of job knowledge often translates into loyal customers and even pay premium price.
Employee retention is an issue since the turnover levels from various industries are rising. Statistics show different percentages related to turnover rates as well as the reasons for the increasing turnover.
"Turnover levels vary very considerably from industry to industry. The highest levels of turnover (22.6%) are found in private sector organisations. Successive surveys of labour turnover show that the highest levelsare found in retailing, hotels, cateringand leisure,and among other lower paid private sector services groups. The public sector has an average turnover rate of 13.7%." (Stone, 2007)
Almost a quarterof employees in the UK have been in their current jobs forfive years.As a proportion of aggregate turnover, the percentage of people leaving organisations through redundancy remains small. There was a slight decreasefrom 28% to 24%of organisations making more than ten people redundant during 2006 and in those operating a recruitment freeze from 24% to 22%in the course of the year.
The cost of high staff turnover can be substantial. ...
irect financial costs of replacing staff but also other repercussions such as the potential loss of key skills, knowledge and experience, disruption to operations and the negative effect on workforce morale. In addition, high turnover represents a considerable burden both on HR and line managers as they are constantly recruiting and training new staff.
When seeking to resolve the problems associated with high turnover, companies must first investigate the underlying causes. They need to have in mind an appropriate level of attrition by benchmarking against similar organisations and taking into account the real costs of turnover to the company.
Different theories of employee retention
People are vital components for the effective operation of the organisation; as a matter of fact, managers often say that people are their most important assets. The human assets are never shown on the balance sheets as a distinct category, although a big amount of money is invested in the recruitment, selection, training of personnel. Rensis Likert suggested maintaining accounts of the valuable human assets through human resource accounting. The importance of the employees cannot be over emphasized because it can determine the success or failure of the organisation.
Make-You-Happy Action Teams (MAT) plays a critical role in managing employee retention. This is Z-Theory management. To briefly sate, Z-Theory management means everyone that is effected by a decision for the company gets a "say" or a "vote" in the decision (tons more on Z-Theory Management in another article). This means employees are directly involved in decision making that affects them. When then make decisions that directly affect them, they stay around longer. This theory can help in managing employee retention due