Employee retention and organizational performance
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Employee retention has a positive and negative impact on an organization's performance, productivity, culture, profitability, and customer satisfaction. With a high turnover rate, retention becomes vital to an organization's future development, but maintaining the wrong workers might stymie success. For good reason, most businesses strive for high retention rates. Kabir, A. N. M. J. (2011)Employee turnover has a financial influence on an organization's performance and long-term profitability. However, when layoffs account for a considerable fraction of the total retention workforce, high retention rates can have unfavorable effects for firms.
Engagement strategy geared at assisting firms in retaining their best employees necessitates a thorough grasp of the benefits and drawbacks of employee retention as well as their influence on the organization.
Benefits of Retention of Employees
High retention rates show greater customer service, organization, and efficiency on the team. Employees who care more about the organization's mission experience a sense of purpose in their employment and exhibit passion for their work, which makes engagement particularly crucial.Kabir, A. N. M. J. (2011)
Turnover rates can have a significant impact on a company's bottom line, hence it is crucial that high retention rates translate into low turnover rates. To prevent the costs associated with wear, the majority of businesses try to minimize it.
Organizations need strong retention rates for a variety of reasons, not the least of which is the high financial cost of change.
In addition to the expenses, managers must divert time and resources from other tasks in order to combat fraud. Managers invest less time and energy in the hiring process when there is less turnover. High circulation might sometimes irritate workers to the point of violence. Employees may be overworked as a result of the growing workload and obligations. even new hires may become discouraged due to the difficulty of learning a new job rapidly.
Retention's Drawbacks
While we frequently hear about the benefits of high turnover, there are also drawbacks to high retention rates. While pricing adjustments can have a detrimental impact on a company's performance and profitability, not all price changes are bad.
In other situations, it may appear absurd to believe that insurance is detrimental, because most of us have heard of changes harming a company's bottom line. However, insurance might be a concern for teams that grow over time.Batt, R., Colvin, A.J.S. and Keefe, J. (2002)
Overstaffing has the potential to terminate people, keep them on the job, reduce productivity, underperform, and eliminate good employees. Organizations keep a high level of control when this occurs, but work efficiency and employee morale decrease.
References
Batt, R., Colvin, A.J.S. and Keefe, J. (2002) 'Employee Voice, Human Resource Practices, and Quit Rates: Evidence from the Telecommunications industry', Industrial and Labor Relations Review, vol. 55, no. 4, pp. 573-594.
Kabir, A. N. M. J. (2011). Factors Influencing the Employee Job Satisfaction and Organizational Commitment : A Study of Selected Commercial Banks in Bangladesh. 2613, 97–104.
Employee retention is most important topic nowadays most This underused practice can be a powerful tool for retention.
ReplyDeleteAgree with you Malsha. Employee retention affect to organization's performance,Productivity,Profitability and customenr satisfaction in positive and negative ways.
DeleteVery insightful details
ReplyDeleteAppreciate Hansi. While the high costs of turnover make retention essential for an organization future success.
DeleteMost of the company has face the high level of the employee turnover in this article has giving insights for the how to retain their employees
ReplyDeleteThank you for have comment, Employee turnover can significantly affect an organization's operations and long-term success due to its financial impact.
ReplyDeleteWell done Dulanjalee! I completely agree with you because it's crucial to keep employees because retaining employees helps the company remain healthy and successful. Hiring and training new staff takes a lot of time, effort, and money, and turnover can hurt the company's performance. Numerous issues are exacerbated by frequent personnel turnover, including high expenses, knowledge loss, and low productivity.
ReplyDeleteThank you for the comment Charani, employee retention rate is a critical business metric. It highlights how many employees choose to stay at your organization.
DeleteThis is an excellent topic and evaluation. Employee retention strategies should be understood by all employers. Not only because of the cost of employee turnover is incredibly high, but also it has a major impact on revenue, productivity, company culture, customer experience and more.
ReplyDeleteAppreciate and agree with your comment Isanka. Modern professional especially those in younger generation wants to work for a company with values that align with their own.
ReplyDelete