HR Challenge of Employee Retention

 Introduction   

Employee retention is one of the most valuable responsibilities of the human resource management. According to Martocchio (2019), employee retention is considered as various practices and policies that enable employees to stick and remain loyal to an organization for a longer period of time. Many organizations invest a significant amount of time and resources to groom employees and make them ready to handle corporate responsibilities. Retention of productive and talented employees is a major concern for many HR professionals and businesses today. It is an issue that is presenting HR professionals with a lot of challenges today. It is often more efficient to retain a productive and quality employee than recruiting, training, and orienting a replacement employee of similar quality. Finding an exceptional employee is one thing but keeping them is another great challenge that HR managers must deal with every day. Today, most employees are mobile, particularly due to the increasing rate of globalization and social media platforms where they can easily access various information regarding job opportunities. It is very challenging for a business to survive if its most productive employees quit. It is the responsibility of the HR management to retain more productive employees who always think and act in favor of the company and significantly provide their level best performance. Every organization requires loyal and hardworking employees with full dedication to help achieve its objectives. However, with the current work dynamics, the process of employee retention presents a lot of challenges to HR managers. 

Impacts of Employee Turnover

    The role that employees play in an organization cannot be overemphasized; they are the backbone of the success of any business initiative. Bratton and Jeff (2017) states that the quality of a company’s workforce is a reflection of the overall performance of such organizations in areas of sales, productivity, quality of services offered, and the overall management of the business. The challenges of dealing with the complex aspects of employee turnover would mean that many more productive and skilled employees will leave. This could translate into a huge problem for an organization. Quitting of an employee from his/her job responsibilities negatively impact organizations in terms of cost and the capacity to deliver the minimum required services. HR managers face the challenge of having to hire and train new employees every time to settle into the job before becoming effectively productive. In the past decade, the rate of employee turnover has presented challenging situations for HR managers as employees are continuously looking for better work opportunities to meet their needs. 

Employee turnover is often a very costly process for an organization, particularly if it is voluntary resignation and the subsequent process of replacing them. When an employee quits, the HR management must undertake a search of the labor market for a suitable substitute, choose between the available substitutes, induct, and undertake formal and informal training for the new recruits until the employee attains a reasonable performance level needed to drive the organization forward. This is normally an expensive process that an organization must incur. 

Additionally, turnover causes the loss of experienced employees. Marticchio (2019) states that fostering a culture that promotes the transfer of knowledge and succession is an important strategy for organizational growth and sustainability. Whenever an employee, particularly the experienced ones, leaves an organization, there is always unavoidable disruption in the productivity. The average cost of replacing an employee is one-third of the new employee’s yearly salary (Aruna & Anitha, 2015, p. 94). The HR will need to pay for ads, spend time on interviewing the job applicants, and training the new hires. Additionally, losing an experienced worker would also mean a loss of certain amount of knowledge regarding how the organization works. This means that the new hires who will take the responsibility of the departed employees may likely make more mistakes, costing the company even more. 

The challenge of employee retention impacts the maximum ability of the HR to achieve competitive advantage for the organization. In a customer service organization, customers will most likely be unhappy to be served by new individuals every time. Experienced employees often know the customers by name or understand their purchase preferences and history – details that the new hires will take some time to discover. Keeping the experienced workers would mean that that the HR keeps familiar contacts for clients. 

When a worker departs, the HR may be forced to pull other workers off their works or increase their work hours to cover part of the departed employee. Often, this increases workload resulting in stress and reduced workplace morale (Martocchio, 2019). The uncertainty regarding who will replace the departed employee may also have a negative impact on the other employees. 

Challenges in Employee Retention

 In the current labor market, retaining valuable and talented workers is a great challenge for many HR managers. There are various aspects that make this task even more challenging. First of all, HR managers consider monetary dissatisfaction as one of the primary reasons why workers seek for a change. According to Martocchio (2019), every organization has a wage budget for each employee. Even though the HR can raise the budget to some extent, it cannot be done beyond a given limit. It therefore becomes difficult for the HR to retain talented and valuable employees when they quote exceptionally high figures beyond the organization’s budget and is not ready to compromise. The HR has the responsibility of taking care of the interest of all employees and cannot afford to treat others extraordinarily. To minimize major disputes among employees, the HR must ensure that the wages of those working at the same level should be within the required limit. A highly potential employee is normally the center of attention of many HR managers but the limitations of management should not be overstretched with high salary demand. HR managers in this case may find it difficult to convince the employee to remain in the organization. 

In the current labor market, it is also important to note that the presence of social media and other internet platforms has made it easier for employees to access many job opportunities outside their company which may meet their demands and it is difficult to stop people from looking for a change. Every organization today is trying to hire employees from their rivals and offer lucrative opportunities to attract them. When promised money and rank, convincing employees to stay becomes an uphill task for the HR team. Some employees also have a tendency of getting bored within a short period of time. An employee may find a job very interesting at the start but later consider it monotonous and opt to look for a change. It therefore becomes challenging for the HR to convince such kind of employees to stay (Kumar & Balaji, 2017). 

Unrealistic expectations from job can also make employees to look for a change in employment. Employees may find it difficult to understand that you cannot get all the comforts at the workplace. When people from different backgrounds come together in a company, minor misunderstandings may occur but some employees tend to make a big issue out of them. 

Recommendations

    In order to understand how HR managers can deal with the challenge of retaining talented and valuable employees, it is first important to understand the causes of employee turnover. One of the common reasons why retaining employees may prove a challenging initiative is the presence of a toxic culture or a poor culture-fit. And this does not refer to an employee not fitting in with the workplace culture but a culture that is not fitting its people. Storey (2007) refers to it as a form of corporate culture that disrupts employee morale, scares away new talents, and actively pushes away its most valuable employees. Organizations exhibiting tell-tale signs of a toxic culture often give HR professionals the difficulty of persuading employees to stay. If such a company has the best possible talents for the job, they will always find themselves running away immediately they connect with high stress levels, tanking mental and physical health, and the eroding motivation with an inappropriate culture. Dealing with a negative workplace culture is one of the most difficult steps that HR can take to enhance employee retention. Contrary to what many people believes, a toxic culture does not result from a few bad individuals but as a result of a leadership that ignores or refuses to acknowledge and act on the signs that something is amiss (Bratton & Jeff, 2017). It is important for HR managers to perform a comprehensive culture audit on a regular basis to help identify common issues, track their causes, and ensure that they are dealt with before they escalate into a big concern. Lack of feedback and recognition may also push employees away. Feedback is the initial step to ensuring that employees concerns are heard; therefore, averting this process can prove damaging to their success. If a worker is struggling, giving them an honest feedback and a helping hand may enable them refocus and manage the workload. The HR should listen to the employees at each level of the organization because they are the best assets that they have to help diagnose what is happening within the organization. Effective HR managers know when to help the workers to improve their performance and constantly coach and offer feedback to all of them (Kim et al., 2017). 

Employee dissatisfaction with the work environment is another key aspect that makes them to leave. According to Cho et al. (2017, p. 61), employees normally want to work in an organization with a sense of direction. It is very common for a job to meaningfully differ from the initial description and what an employee was promised before being hired. 

Work overload and the subsequent too much stress also plays key role in an employee’s decision to quit your workplace to find a suitable environment elsewhere. According to DeCenzo, Stephen & Susan (2016), around 53% of American workers are overworked and experiences burnout. And furthermore, overworked employees are not good for a company’s bottom line. They are prone to high levels of stress, illnesses, absenteeism, and in certain cases, depression and burnout. To deal with this issue, the HR managers should use flexible work arrangements to ensure that employees work at their convenient times. This will also enable them balance their work and personal life. When employees have some control over their work schedule, they have higher chances of experiencing improved job satisfaction. Using flexi time will help reduce work related stress, improve employee morale and performance, and give employees the time and freedom to attend to other aspects of their personal lives (Groen et al., 2018). As a HR manager, if you notice people staying far late than they should, coming to work on weekends or working all hours of the day, it is an indication of something amiss. You should actively investigate the problem behind why employees are spending too much time on work or overwork. In most cases, this may be caused by lack of enough resources, presence of unrealistic deadlines, too much work volumes or lack of proper training to efficiently handle the job. Therefore, it is important for the HR to pinpoint the main cause of the problem and effectively address it. This will translate into a culture that fosters and values a conducive working environment. 

Boredom can also be a cause for employee turnovers. This results from a lack of an engaging or challenging work. An employee may become bored with his/her work if they feel that their potential is not fully utilized or their jobs lack meaning. This is a result of mismatch between their interest and the company they work for or the kind of work they do. (Groen et al., 2018) states that bored employees may be more stressed than the overworked ones. Boredom may also result from being undervalued. Everyone wants to be rewarded and recognized for a job excellently done; and recognition does not have to be in monetary form. Martocchio (2019) believes that sincere appreciation is the most effective recognition. It is not just an essential thing to do as a manager but also a strategic way of communicating appreciation for good effort and at the same time, reinforcing those behaviors and actions. Dealing with the issue of boredom, and valuing and recognizing employee contribution will make them feel “at home.” HR managers should ensure that employees get new challenges to prevent them from feeling like stagnating at the same place. Providing workers with new training and education opportunities enhances their career development. Opportunities for growth and development are very crucial for retaining valuable workers. If one feels like stuck in a dead-end role, they will most likely look at other organizations for the opportunity to improve their status and income. Good managers find ways of helping employees acquire new skills and duties in the roles and put them in line for future promotion. Employee who sees a potential for growth and better compensation will most likely be motivated to stay within a company (Martocchio, 2019). Again, HR managers should ensure that they involve their employees in decision making and problem solving. Micromanaging workers normally stamp out the culture of innovation, which is what an organization wants to be competitive in the market. Stifled and over-managed workers will most likely grow irritated with the lack of freedom and ability to contribute to decision making, resulting in high turnover. Employees who are empowered to make decisions that affects the organization accepts their responsibility and adopt trust with passion and pride of owning up for the organization’s failure or success. 

Armstrong (2006) states that employees do not often quit their jobs but they run away from their managers. Bad bosses are one of the common reasons why retaining employees is difficult. Organizations experiencing brain drain will most likely be a target to an incompetent, ineffective or ill-intentioned managers. Reports indicate that employees who do not trust their bosses often leave their jobs to seek more promising workplaces. If top performers are leaving an organization because of one person in particular, it is essential to take active measures to re- evaluate the value of the manager to the organization and if it is a no-brainer, get rid of him/her. Improving employee retention is all about listening to workers and understanding why they play an essential part in the company’s success. 

Conclusion

    Employee retention is a challenge that many HR professionals face today. The rate at which employees leave their places of work in search of other opportunities has significantly increased in the past 10 years. Employees play an essential role in the success of an organization, therefore, losing the most productive and valuable one is a huge loss for an organization that has to spend a lot to hire a replacement. With the current and continuously changing labor market, employees have access to various employment ads through social media and the Internet of Things. Organizations also want to hire individuals from their rivals to increase their competitive advantage by offering them more lucrative offers, making it difficult for HR managers to convince them to remain with the organization. Even though employee retention is a complex issue for HR managers, they can still adopt the recommendations mentioned above to foster a workplace that would drive the organization forward and enhance its competitive advantage. 

Work Cited

Bratton, John, and Jeff Gold. Human resource management: theory and practice. Palgrave, 2017. 

Martocchio, Joseph J. Strategic Compensation: A human resource management approach  (Fifteenth Edition). 

Pearson Education, Inc., 2019. Groen, B. A., van Triest, S. P., Coers, M., & Wtenweerde, N. (2018). Managing flexible work arrangements: Teleworking and output controls. European Management Journal, 36(6), 727-735. 

Storey, John, ed. Human resource management: A critical text. Cengage Learning EMEA, 2007. 

DeCenzo, David A., Stephen P. Robbins, and Susan L. Verhulst. Fundamentals of human resource management. 

John Wiley & Sons, 2016. Armstrong, Michael. A handbook of human resource management practice. Kogan Page Publishers, 2006. 

Kumar, A. Ananda, and K. Balaji Mathimaran. "Employee Retention Strategies –An Empirical Research." Global Journal of Management and Business Research (2017). 

Aruna, M., and J. Anitha. "Employee retention enablers: Generation Y employees." SCMS Journal of Indian Management 12.3 (2015): 94. 

Kim, Soojin, et al. "Determinants of employee turnover intention." Corporate Communications: An International Journal (2017). 

Cho, Yoon-Na, et al. "The role of emotions on frontline employee turnover intentions." Journal of Marketing Theory and Practice 25.1 (2017): 57-68.