PAGE

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CHAPTER
EMPLOYEE RETENTION SECTION A 01
01

1.1 Introduction to Human Resource Management 02

1.2 Introduction to Employee Retention 03
1.3 Needs for Employee Retention 04
1.4 Employee Retention & Five Keys of Employee Retention 05-07
1.5 Importance of Retaining Employees
08
1.6 the 3r's of Employee Retention
09-10
1.7 Introducing the Rethinking Retention
11
1.8 Principle of Rethinking Retention Model
1.9 the Strategies of Rethinking Retention Model 12
1.10 Mis in Hrm 13-14
1.11 Employee Retention Strategies for Job Satisfaction 15
1.12 Benefits of Employee Retention 16-19
1.13 Employee Turnover 20-21
1.14 Causes of High Employee Turnover 22
1.15 Employee Retention Models
23
1.16 Improve Employee Retention
24
1.17 Measuring & Monitoring Employee Retention
25
1.18 Role of Leaders in Employee Retention
1.19 Herzberg Theory 26-27
1.20 Why Employees Join 28
1.21 Why Do Employees Stay 29
1.22 Why Employee Leave 30
1.23 Best Practices of Employee Retention 31
1.24 Outsourcing Employee Retention Program 32-34
1.25 the Critical Factors of Respective Motivation Theories, How to 35
Develop and Implement Employee Retention Practice.
36-37
1.26Employee Attrition
38
1.27 Employee Attrition Vs Turnover
39
1.28 Different Types of Employee Attrition
1.29 Calculate Employee Attrition Rate 40-41
1.30 How to Control Employee Attrition 42
43
44-45

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 PAGE
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1.31 Customer Retention SECTION B

A) Why is Customer Retention Important?
B) Customer Retention Benefits
C) Key Customer Retention Metrics
46-52
D) Customer Retention Rate
E) Customer Attrition Rate
F) 6 Strategies to Improve Customer Retention

CHAPTER
LITERATURE REVIEW 53-54
02

CHAPTER
RESEARCH METHODOLOGY 55-61
03

CHAPTER
DATA ANALYSIS & DATA INTERPRETATION 62-66
04

CHAPTER
FINDINGS 67-68
05

CHAPTER
CONCLUSION 69-70
06

CHAPTER
SUGGESTION & RECOMMENDATION 71-73
07

CHAPTER
BIBLIOGRAPHY & WEBLIOGRAPHY 74-76
08

CHAPTER
APPENDIX 77-80
09

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 CHAPTER 01

EMPLOYEE
RETENTION SECTION A

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 INTRODUCTION
HUMAN RESOURCE MANAGEMENT

The process of acquiring, training, appraising, and compensating

employees, and of attending to their labour relations, health and safety,
and fairness concerns.
(Dessler, 2020)

"What is human resource management?" by presenting a broad overview of

the issue and exposing the readers to the practice of HRM in current
enterprises. HRM is indeed complicated. HRM is both an art and a science
because it requires precision and thorough application of theory.

Human Resource Management is a formal way of managing people within an

organization. It is concerned with specific work practices and how they affect
the organization's performance.

Human Resource Management focuses on recruiting new employees,

managing employees, providing direction when necessary, and increasing the
morale of workers.
It also helps with increasing the relations between employees and their
employers and constantly striving to make them better.
HRM assesses the productivity and success of every department in an
organization and helps solve problems that might arise.

The objectives of HRM are the goals of an organization. Human resources

must be managed in a way that uses their resources to achieve the
organizational objectives.

The four areas of personnel responsibility and any associated functions share
a common aim: to have enough competent employees with the skills, abilities,
knowledge, and experience needed to achieve further organizational
objectives.

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 EMPLOYEE RETENTION

Employee Retention is defined as an organization’s ability to retain its employees.

The ultimate aim of Employee Retention is to make both the stakeholders, i.e.,
employees and employer happier. It facilitates loyal employees sticking to the
company for a longer duration, which in turn will benefit both the stakeholders.

Employee retention is not just a matter that can be dealt with through records and
reports. It purely depends upon how the employers understand the various
concerns of the employees and how they help them resolve their problems when
they are in need.
Every organization spends time and invests money in grooming new employees
and making them corporate-ready. The organization will be at a complete loss if
such employees quit after they are fully trained. The HR department has to provide
the line managers with the right tools to retain talented employees.

The retain policy should be designed with flexible schemes that can be changed
according to the prevailing conditions. It is the manager who can influence the
employee, but the Human Resources department has to provide the managers with
the required tools and channels to influence the employees effectively.

Finally, the retention program has to be measured. The HR department has to

measure the performance of the retention plan. They should measure the difference
in turnover, the development of attrition and the satisfaction of employees in the
program.

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 NEEDS OF RETENTION

Improvement of Recruitment Successful retention methods frequently

begins during the staff recruitment phase
Employee Retention Strategies Companies use retention methods to
manage employee turnover and attract quality personnel.
Maintenance of Performance and Productivity Employee retention
practices aid in the productivity of a firm.
Employee retention programmes can be very cost-effective for a
business because they have a direct impact on an employer's
strategies.
Workers who appreciate what they do and the environment in which
they work are more likely to stay with their business for a longer
amount of time.

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 EMPLOYEE RETENTION

Employee retention is defined as an organization’s ability to hold on to its

employees. It refers to the strategies an organization develops to mitigate employee
turnover risks and the processes it puts in place to increase retention of top talent.

"Retention is a voluntary move by an organization to create an environment which

engages employees for the long term” Chaminade Cascio (2003) perceived
retention as initiatives which the management takes to prevent employees from
leaving the organization.

FIVE KEYS TO RETENTION

made on canva.com

It is a competitive recruitment market and projected to get even tougher. Therefore,

not only do businesses have to attract the right employees, they also have to
concentrate on keeping the ones they have. This article will present you with 5 keys
to employee retention that go beyond your pay package

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THE 5 KEYS TO RETENTION ARE:

KEY #1: COMPENSATION

1. Compensation refers to any payment given by an employer to an employee during
their period of employment. In return, the employee will provide their time,
labour, and skills.
2. This compensation can be in the form of a salary, wage, benefits, bonuses, paid
leave, pension funds, stock options, and more.
3. Compensation is also sometimes referred to as remuneration

KEY #2: ENVIRONMENT

1. When looking for a job or trying to keep operations running well, it's crucial to
evaluate a company's work environment, which is the collection of situational
aspects that make up the corporate climate.

1. A positive office environment can boost your morale, while a negative one might
demotivate you.
2. Understanding this critical workplace attribute can assist you in identifying a
healthy atmosphere.

KEY #3: GROWTH

1. Employee development is a process of improving employees’ existing
competencies and skills and developing newer ones to support the organization’s
goals.
2. Inherent in this definition are the following finer points of interest:
a. Employee development isn’t just about developing organizational L&D
strategies
b. It’s more than just implementing mandatory employee training
c. It goes way beyond meeting with employees annually to discuss their
shortcomings and highlighting improvement needs

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KEY #4: RELATIONSHIP
’Employee relations (ER) is the term that defines the relationship between
employers and employees.
ER focuses both on individual and collective relationships in the workplace with
an increasing emphasis on the relationship between managers and their team
members.
‘Employee relations’ covers the contractual, practical, as well as physical and
emotional dimensions of the employee-employer relationship.

KEY #5: SUPPORT

This is where leadership comes to the fore. A leader has many responsibilities
and roles, but perhaps the most important thing is to guide, motivate and inspire
his employees.
Ultimately, the involvement of your subordinates depends on four factors –
mastering them will create a more productive and enjoyable work culture.

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 IMPORTANCE OF RETAINING EMPLOYEE

The challenge of keeping employees, and 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 for organizations to meet their goals and serve
customers well. Replacing an employee costs money. The cost of
replacing an employee is estimated at up to twice the individual’s annual
salary (higher for positions based on their level within the inter-
organizational hierarchy, such as middle management) and this does not
even include the cost of lost knowledge.
Recruiting employees consumes a great deal of time and effort, much of it
futile. There is not just one organization 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 an
organization is short-staffed, they often need to put in extra time to get the
work done.

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 The 3 R’s OF EMPLOYEE RETENTION

REWARD

RECOGNIZE

RESPECT

To keep employees and keep their satisfaction levels high, any organization needs to
implement each of the three R’s of employee retention: respect, recognition, and
rewards.

Respect is esteem, special regard, or particular consideration given to people. As

the pyramid shows, respect is the foundation of keeping your employees.
Recognition and rewards will have little effect if you do not respect employees.

Recognition is defined as “special notice or attention” and “the act of perceiving

clearly.” Many problems with retention and morale occur because management is
not paying attention to people’s needs and reactions.

Rewards are the extra perks you offer beyond the basics of respect and
recognition that make it worth people’s while to work hard, to care, and to go
beyond the call of duty. While rewards represent the smallest portion of the
retention equation, they are still an important one.

You determine the precise methods you choose to implement the three R's, but in
general, respect should be the largest component of your efforts.
Without it, recognition and rewards seem hollow and have little effect – or they have
negative effects.

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The magic truly is in the mix of the three. When implemented, the “3 R's” approach
yields reduced turnover and the following benefits:

Increased productivity,
Reduced absenteeism,

A more pleasant work environment (for both employees and management/employer),

Improved profits.
Furthermore, an employer who implements the three R's will create a hard-to-leave
workplace, one known as having more to offer employees than other employers. It
becomes a hard-to-leave workplace – one with a waiting list of applicants for any
position that becomes available – purposefully, one day at a time.

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 INTRODUCING THE RETHINKING RETENTION MODEL

It's time to rethink retention. We all wish turnover solutions were as simple as
tweaking co-pays for employees' health insurance, but unfortunately, retention is
more vexing and much more complex. Rather than pulling on one rope, it
requires pulling many strings.
Here's a graphic representation of an organization-wide model for keeping your
best workers longer. Follow this map and employee retention will improve and
drive all other key metrics in your favour.

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THE PRINCIPLES OF THE RETHINKING RETENTION MODEL

There are three basic principles at the foundation of retention.

Point 1: Employees quit jobs because they can. Workplace demographics leave
employees with too many job choices, even in down economies. Avoid the dead-
end road of basing retention solutions on exit surveys and other reasons you
believe employees leave. Instead, build a proactive solution you can control.

Point 2: Employees stay for things they get uniquely from you. Who are you as an
employer? What does your organization offer that others do not? Identify it and
build hiring, training, and all other processes on the things that are uniquely you.

Point 3: Supervisors build unique relationships that drive retention...or turnover.

Supervisory relationships are unique levers that deeply impact employees'
stay/leave decisions. Some employees stay for supervisors, some leave because of
them, and some just avoid them.

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THE STRATEGIES OF THE RETHINKING RETENTION MODEL

Once you've grasped the principles, the following strategies will help you
improve retention, productivity, and all other important metrics.

Point 1: Hold supervisors accountable for achieving retention goals. Supervisors

won't achieve any other goal you assign them if they lose their best performers, so
make them accountable and give them "skin in the game" for retention.

Point 2: Develop supervisors to build trust with their teams. Communication,

recognition, and development all fall behind trust. Who values information and
praise if you don't believe it?

Point 3: Narrow the front door to close the back door. New hires must align with
who they are—your jobs, values, and standards—and give clear indications they
intend to stay.

Point 4: Script employees' first 90 days. First impressions predict how long
employees stay, so early activities must be scripted to present your company in
positive and truthful ways.

Point 5: Challenge policies to ensure they drive retention. Blow the dust off last
decade's thinking and drive your rules toward retention.

Point 6: Calculate turnover's cost to galvanize retention as a business issue.

Dollars speak louder than numbers and percentages.

Point 7: Drive retention from the top, because executives have the greatest impact
on achieving retention goals. Think about how your company manages sales,
service, quality, and safety and then build those same methods for retention.

The core ingredient of the Rethinking Retention model is the shared responsibility
of operations management and staff support. In most organizations, operations
management drives sales, service, quality, and safety, with various staff
departments providing tracking, training, and other services. With retention,
however, HR tends to manage on its own.

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Making people management work requires organizations to run on all
cylinders, and to involve all who can help. Each company has
developed successful, shared-responsibility models for managing sales
and other key initiatives, so why not replicate these ways with
retention?
Driving retention processes from top to bottom is the key. Savvy
organizations manage retention with the appropriate amount of
accountability and other operations-driven tactics to be fully effective.
We looked at the types of top-down processes our clients usually had in
place before our engagements with them. While a few of these
organizations provided coaching for supervisors who failed to keep
good workers, no retention processes for accountability, recognition,
consequences or skill-specific training were in place. And most of the
retention coaching was provided by HR instead of the supervisor's
manager.
Organizations that manage retention in that way turn to HR to solve it.
The result is usually programming such as career classes or benefits
like vision care.

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 MIS in HRM

Management information systems (MIS) are systems used to collect, store,

process and analyze data from various business activities.

HRMIS is a national system that provides direct access to Human Resource

(HR) information in support of operational activities, via client-server
technology and intranet/Internet technology.

Management Information Systems (MIS) is the study of people, technology,

organizations, and the relationships among them. MIS professionals help firms
realize maximum benefit from investment in personnel, equipment, and business
processes.

As shown in the figure, Management Information Systems (MIS) are responsible

for all the activities associated with Human Resources Management (HRM).

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 EMPLOYEE RETENTION STRATEGIES FOR
JOB SATISFACTION

Despite a very tight job market in some industries and regions, candidates with in-
demand skills will likely find work quickly. In recent months, many companies
have resumed hiring after picking up the pace during the pandemic.

The key to retaining top talent is to move fast if you feel your business is at risk of
losing these people.

These 14 areas can increase employee job satisfaction and help you retain valued
employees:
1. ONBOARDING AND ORIENTATION
Every new hire should be set up for success from the start. Your onboarding process
should teach new employees not only about the job but also about the company
culture and how they can contribute to and thrive in it. Don’t skimp on this critical
first step. The training and support you provide from day one, whether in person or
virtually, can set the tone for the employee’s entire tenure at your firm

2. MENTORSHIP PROGRAMS
Pairing a new employee with a mentor is a great component to add to your extended
onboarding process, especially in a remote work environment. Mentors can welcome
newcomers into the company, offer guidance and be a sounding board. And it’s a
win-win: New team members learn the ropes from experienced employees, and, in
return, they offer a fresh viewpoint to their mentors.
But don’t limit mentorship opportunities to new employees. Your existing staff —
and your overall employee retention outlook and team’s job satisfaction — can
significantly benefit from mentor-mentee relationships.

3. EMPLOYEE COMPENSATION
It’s essential for companies to pay their employee's competitive compensation,
which means employers need to evaluate and adjust salaries regularly. Even if your
business can’t increase pay right now, consider whether you could provide other
forms of compensation, such as bonuses. Don’t forget about improving health care
benefits and retirement plans, which can help raise employees’ job satisfaction, too.

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4. PERKS
Perks can make your work stand out to potential new hires and re-engage current
staff while boosting employee morale. According to research for our Salary Guide,
flexible schedules and remote work options are the perks many professionals value
most. In addition, about a third of the professionals we surveyed said paid parental
leave is a big plus.

5. WELLNESS OFFERINGS
Keeping employees fit — mentally, physically and financially — is just good
business. Many leading employers expanded and improved their wellness offerings
during the pandemic to help employees feel supported and prioritize their well-being.
Stress management programs, retirement planning services and reimbursement for
fitness classes are just some examples of what your business might consider
providing to employees

6. COMMUNICATION
The shift to hybrid and remote work has underscored the importance of good
workplace communication. Your direct reports, whether they work on-site or
remotely, should feel they can come to you with ideas, questions and concerns at any
time. And as a leader, you need to make sure you’re doing your part to help promote
timely, constructive and positive communication across the entire team. Make sure
you proactively connect with each team member on a regular basis, too, to get a
sense of their workload and job satisfaction.

7. CONTINUOUS FEEDBACK ON PERFORMANCE

Many employers are abandoning the annual performance review in favor of more
frequent meetings with team members. In these one-on-one meetings, talk with your
employees about their short- and long-term professional goals and help them
visualize their future with the company. While you should never make promises you
can’t keep, talk through potential career advancement scenarios together and lay out
a realistic plan for reaching those goals.

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8. TRAINING AND DEVELOPMENT
As part of providing continuous feedback on performance, you can help employees
identify areas for professional growth, such as the need to learn new skills. Upskilling
your employees is especially important today as technology continues to change how we
work. When people upskill, they gain new abilities and competencies as business
requirements evolve. Make it a priority to invest in your workers’ professional
development. Give them time to attend virtual conferences, provide tuition
reimbursement or pay for continuing education. Also, don’t forget about succession
planning, which can be a highly effective method for advancing professional
development and building leadership skills.

9. RECOGNITION AND REWARDS SYSTEMS

Every person wants to feel appreciated for the work they do. And in today’s “anywhere
workforce,” an employer’s gratitude can make an especially big impact. So be sure to
thank your direct reports who go the extra mile and explain how their hard work helps
the organization. Some companies set up formal rewards systems to incentivize great
ideas and innovation, but you can institute compelling recognition programs even if you
have a small team or a limited budget.

10. WORK-LIFE BALANCE

What message is your time management sending to employees? Do you expect staff to
be available around the clock? A healthy work-life balance is essential to job
satisfaction. People need to know their managers understand they have lives outside of
work — and recognize that maintaining balance can be even more challenging when
working from home. Encourage employees to set boundaries and take their vacation
time. And if late nights are necessary to wrap up a project, consider giving them extra
time off to compensate.

11. FLEXIBLE WORK HOURS/ WFH

Many companies understand that even though they have reopened their offices, some of
their employees still prefer to work remotely, at least part-time. Not having that option
might even spur employees to resign. A recent survey found that half of the
professionals working from home would look for a new job if they were required to
return to the office full-time.
So think sooner than later about what you can offer employees if remote work on a
permanent basis isn’t an option. A compressed workweek? Flextime? Or maybe a partial
telecommuting option? All of the above can help relieve stress for your team — and
boost employee retention.

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 12. EFFECTIVE CHANGE MANAGEMENT
Beyond all the recent disruption due to the pandemic, every workplace has to deal
with change, good and bad. And employees look to leadership for insight and
reassurance during these times. If your organization is going through a big shift,
keeping your team as informed as possible helps ease anxieties and manage the
rumour mill. Make big announcements either individually or in a group call or
meeting, and allow time for questions.

13. AN EMPHASIS ON TEAMWORK

You should encourage all your employees, not just star players, to contribute ideas
and solutions. Promote teamwork by creating opportunities for collaboration,
accommodating individuals’ work styles and giving everyone the latitude to make
decisions and course corrections if needed.

14. ACKNOWLEDGEMENT OF MILESTONES, BIG AND SMALL

A final tip for promoting employee retention is to shine a light on notable
achievements. Whether your team finishes ahead of the deadline on a major project
or a worker reaches a five-year work anniversary, seize the opportunity to mark the
milestone together. Even if you need to celebrate virtually, it can be a meaningful
and memorable moment for everyone.
The 14 employee retention strategies outlined above are just some ways to help
increase your team members’ job satisfaction

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 BENEFITS OF EMPLOYEE RETENTION

Retaining employees is key for businesses competing for top talent. Despite some
experts' suggestions that a 90% retention rate is a good goal, the reality is that it varies
across different companies and industries. Employee retention, however, is universally
beneficial for many reasons. Nine of the biggest benefits include:

COST REDUCTION:
Employers spend hundreds of millions of dollars every year recruiting and training new
workers. Those costs are sunk if an employee leaves prematurely. Productivity, team
cohesiveness and morale also take a hit — which also has a financial impact. Total
replacement costs for each employee can range from 90% of a worker’s salary for an entry-
level employee to 200% or more for tenured professionals and leaders.

RECRUITMENT AND TRAINING EFFICIENCY:

By focusing on employee retention, companies reduce recruiting costs and enjoy greater
returns on employee training. Recruiting costs to include fees paid to recruiters or to
advertise the position, interview-related travel and possible signing bonuses. Next comes
training, which can also be costly. If the employee leaves prematurely after being hired, that
money is wasted.

INCREASED PRODUCTIVITY:
Employee turnover sets back productivity because it takes time for new workers to get up to
speed and produce at a comparable level as their predecessors. It also takes a toll on the
remaining staff, who have to take on additional work and may produce lower-quality output
as a result. Conversely, high-retention workplaces tend to have more engaged workers who,
as a result, are more productive.

IMPROVED EMPLOYEE MORALE.:

Organizations with successful employee retention programs foster greater connectedness
and engagement, which helps morale and, in turn, boosts retention. Conversely, a steady
stream of departures has a dampening effect on workplace morale, with side effects that
include a decrease in work quality and more workers who decide to leave.

EXPERIENCED EMPLOYEES.
It stands to reason that the longer employees remain at an organization, the more engaged,
knowledgeable and skilful they are. They have also forged valuable relationships with
customers and co-workers. When an employee departs, the company incurs an opportunity
cost in the potential value the employee could have delivered.

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 BETTER CUSTOMER EXPERIENCE:
Inexperienced and less adept new hires may be more prone to missteps that
negatively impact a customer’s experience with the company. Satisfied, longer-
term employees are often more skilled in dealing with customers and may have
strong relationships with them. This is as true during all the stages leading to a
signed contract as it is post-sales when a customer might reach out to customer
service. A better customer experience can also be a key brand differentiator.

IMPROVED EMPLOYEE SATISFACTION AND EXPERIENCE:

A symbiotic relationship exists between retention and both employee satisfaction
— worker happiness and fulfilment — and employee engagement, the level of
commitment workers bring to their roles. Satisfied and engaged employees are
often more likely to stay in an organization, and organizations with high retention
rates often experience greater employee satisfaction and engagement.

STRONGER CORPORATE CULTURE:

Corporate culture develops over time, based on employees’ cumulative traits and
interactions. When engaged employees who are aligned with an organization’s
culture stay, they strengthen the organizational ethos. A strong corporate culture
also improves productivity and performance.

INCREASED REVENUE.
Employee retention is not just about cutting costs; anecdotal evidence shows it can
have a positive impact on revenue as well. Employers with better retention rates
deliver a better customer and employee experience, hold on to experienced top
talent and are more productive — each of which can boost growth.

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 EMPLOYEE TURNOVER

Employee turnover, or employee turnover rate, is the measurement of the number of

employees who leave an organization during a specified time period, typically one
year. While an organization usually measures the total number of employees who
leave, turnover can also apply to subcategories within an organization like individual
departments or demographic groups.

HIGH EMPLOYEE TURNOVER

A certain amount of turnover will always exist in an organization, and some may be
beneficial as it makes way for new talent. Industries that tend to employ many first-time,
part-time, seasonal and student workers are naturally prone to extreme or fluctuating
attrition.

However, high turnover takes a toll. Companies with higher turnover lose what they’ve
invested in recruiting, onboarding and training employees who leave. For those
remaining, morale and quality of work can take a hit. In addition, organizations that
experience higher attrition must focus more attention on replacing talent and addressing
issues related to lost productivity, burnout among employees who pick up the slack and
decreased employee engagement. Those negative effects can lead to even greater
turnover and hinder the company’s overall success.

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 CAUSES HIGH EMPLOYEE TURNOVER

What makes workers want to leave a company? The exact causes of

employee turnover vary, but often fall into the following categories:

PERSONAL REASONS:
There are a number of reasons for leaving a job that has nothing to do with
the employer, such as relocating for a spouse, family issues, a career
change or health reasons.

WORK-LIFE BALANCE:
Issues related to long hours or rigidity about work styles or location can
drive employees to seek more flexible or less demanding alternatives.

INCOMPATIBILITY:
Incompatibilities between employer and employee, which can often be
traced back to poor hiring processes and decisions, are a common and
largely avoidable reason for turnover.

WORK RELATIONSHIPS:
Individuals may have issues or conflicts with their managers, co-workers
or organizational leadership.

LACK OF OPPORTUNITY:
Employees who see a lack of workplace development, career path or
opportunity to gain new experiences may leave for a business with better
mobility.

FINANCIAL REASONS.
Better pay and benefits available elsewhere are always a strong lure for
employees to leave an organization.

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 EMPLOYEE RETENTION MODELS

Over the years, researchers have developed a number of models seeking to

explain job satisfaction. Rooted in psychology, these models have influenced
HR’s approach to employee retention over the years. They include:

THE HIERARCHY OF NEEDS:

Although psychologist Abraham Maslow developed the Hierarchy of Needs to
better understand the essential needs of humans and which must be met first, the
theory can also be used to examine the biggest contributors to job satisfaction.
The five levels of needs, in order of importance, are psychological, safety,
belongingness, esteem and self-actualization.

MOTIVATION-HYGIENE THEORY:
Two primary factors impact job satisfaction, according to psychologist Fredrick
Herzberg: Motivators also called job satisfiers, include recognition, meaningful
work and personal growth. Hygiene, also called job dissatisfiers, include salary,
benefits and job security. Of note, proper management of hygiene factors can
prevent employee dissatisfaction but are not considered sources of satisfaction
or motivation.

HUMAN MOTIVATION THEORY:

In his 1961 book The Achieving Society, psychologist David McClelland built
on Maslow’s work and identified three intrinsic human needs: achievement,
power and affiliation. By understanding which needs an employee prioritizes,
employers can increase their job satisfaction. Some employees, for example,
may be embarrassed by public praise. Some work best with goal-oriented tasks.

JOB CHARACTERISTICS MODEL:

Organizational psychologists Greg R. Oldham and J. Richard Hackman found
the following job characteristics increase job satisfaction: skill variety, task
identity, task significance, autonomy and feedback. Jobs created with these
characteristics in mind lead to more productive and motivated employees.

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 IMPROVE EMPLOYEE RETENTION

Hiring the appropriate individual is the first step towards improving

employee retention. This necessitates identifying the job itself —
responsibilities, requisite skills, work environment — and crafting a
job description that attracts qualified people.

When an organisation hires a new employee, orientation and

onboarding are critical to making them feel at ease. Employee
retention, engagement, and dedication have all been found to increase
with a well-planned and coordinated onboarding programme.

Furthermore, competitive remuneration and employee benefits are

critical not only for attracting but also retaining the best and brightest.
Competitive bonuses, paid time off, health benefits, and retirement
plans are also available.

Finally, employees desire meaningful employment that puts their skills

and abilities to good use. Other important factors of employee
retention include career development and advancement opportunities,
as well as appreciation for their achievements.

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 MEASURING & MONITORING EMPLOYEE RETENTION

Employee retention is measured by measuring turnover and annual retention rates.

Yet, the most effective employee retention programmes collect and analyse a
wide range of data, such as employee satisfaction and engagement, more nuanced
retention and turnover data, and other concerns such as absenteeism.

These metrics provide a more thorough picture of employee retention, which may
be used to influence recruiting and hiring tactics, address cultural and managerial
challenges, and boost employee happiness and engagement.

Analyzing these retention numbers from many perspectives also allows the
company to focus its retention efforts on top people.

Certain firms that see big, expected changes in departures, such as those with
considerable seasonal or contingent workforces, may make adjustments to their
retention calculations to account for those expected employee exoduses.

As with retention rates, HR and business management can study specific elements
of their turnover rates, such as calculating data by manager, tenure, and high and
low performers.

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 ROLE OF LEADERS IN EMPLOYEE RETENTION

Employee retention and leadership practices go hand-in-hand. A leader is more important than
a manager for any organization. It is up to the senior leadership to set the tone for the company
culture, either good or bad leadership practices, which could lead to good or bad culture. A
good culture binds the talented employees, whereas, a lousy culture tends to drive away the
most talented employees.

Employers must understand their workers’ mindset to create effective retention strategies that
will help keep their top talent around year after year.

An effective leader does the following −

Connects the role of employees with the team goals

Helps in building relationships with employees
Helps the employees to come up with ideas
Makes the team open, engaging and cohesive

The role played by a leader in employee retention is very important than the role played by a
manager. Employee retention includes various steps taken to satisfy the employees so that they
stay with the organization for a longer duration.

It is essential to retain talented employees who are loyal towards the organization and can
contribute effectively. Strong measures must be taken to retain the high-potential employees
who have spent a good amount of time in the organization and know it in and out.

It is the responsibility of the team leader to ensure that the team members are contented with
their work and share a good rapport amongst themselves. An employee quits his job whenever
he faces problems at the workplace and is not satisfied with his work. The job must be
challenging enough and the employees should learn something new every day for them to stick
to it for a long time.

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Following are the roles and responsibilities of the leaders in employee retention −

It is the responsibility of the team leader to notice the hard work of the team member and
should be appreciated for their performance. The top performers of the organization must
be motivated with a special treatment and the result obtained will be the same from them
every time.

Every employee should be treated equally. The rules and regulations should be same for
every employee. It is better to avoid partiality and granting special favor to anyone.

The work assignments to the team members must be as per their qualification,
specialization, interests as well as experience. The team members must enjoy their work
and should find their job interesting for achieving the organization goals.

Every employee should have the accessibility to their team leader, whenever they are in
need. The team members get demotivated, if their queries remain unsolved and there is no
one to listen to them. If the team leader does not have time for his/her team members, the
employees crib among themselves and wish to move on to other organizations.

It is the responsibility of the team leader to distribute the work equally among all the
members of the team. The leader of the team, should be always partial to anyone and
equally treat all his/her team members. An employee who is overburdened will never
finds his/her job interesting and would always prefer to change his/her job.

The leader of the team should be a role model for his/her team members. None of the
employee should fear of his/her boss. In the present scenario, Hitler approach will not
work. The team leader should allow the team members to participate in decision making
of any process. Team leaders should never be arrogant and never misuse of their position.

The leaders should maintain transparency in communication with their employees. The
way of communication should satisfy the employees, which will make the employees
remain loyal towards the organization.

It is the responsibility of the team leader to bind his/her team members together. The team
leader must promote healthy competition at the workplace. The work environment should
be good to work for a longer duration of time, which helps in employee retention.

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 HERZBERG'S THEORY

An alternative motivation theory to Maslow's hierarchy of needs is the motivator-

hygiene (Herzberg's) theory. The theories have overlap, but the fundamental
nature of each model differs. While Maslow's hierarchy implies the addition or
removal of the same need stimuli will enhance or detract from the employee's
satisfaction, Herzberg's findings indicate that factors garnering job satisfaction
are separate from factors leading to poor job satisfaction and employee turnover.
Herzberg's system of needs is segmented into motivators and hygiene factors.
Like Maslow's hierarchy, motivators are often unexpected bonuses that foster the
desire to excel. Hygiene factors include expected conditions that if missing will
create dissatisfaction. Examples of hygiene factors include bathrooms, lighting,
and the appropriate tools for a given job. Employers must utilize positive
reinforcement methods while maintaining expected hygiene factors to maximize
employee satisfaction and retention.

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 WHY EMPLOYEES JOIN

Employees are typically drawn to a business because of the attractiveness of the role.
Yet, finding applicants is only half the battle; keeping staff is the other. Knowing what
your employees are searching for in a position while also ensuring that your
expectations are correct are both critical elements to consider during the hiring
process.

When high-performing employees are offered realistic job previews, they are more
likely to be kept. Companies who seek to oversell the position or company are only
hurting themselves when employees discover a discrepancy between the position and
what they were initially told. Employers should mitigate any initial conflicts of
misunderstanding in order to prolong the employee's tenure with the organisation
when assessing and maintaining retention.

New-hire surveys can assist in identifying trust breaches that occur early on when
employees realise that the job is not what they expected.

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 WHY EMPLOYEES STAY

Understanding why employees stay with an organization is equally as important to

understand why employees choose to leave. Recent studies have suggested that as
employees participate in their professional and community life, they develop a web
of connections and relationships. These relationships prompt employees to become
more embedded in their jobs and by leaving a job; this would sever or rearrange
these social networks. The more embedded employees are in an organization, the
more they are likely to stay

Additionally, the extent to which employees experience fit between themselves at

their job, the lesser chance they will search elsewhere. Organizations can ascertain
why employees stay by conducting stay interviews with top performers. A stay
survey can help to take the pulse of an organization's current work environment and
its impact on their high performing employees. Employers that are concerned with
over-using stay interviews can achieve the same result by favoring an ongoing
dialogue with employees and asking them critical questions pertaining to why they
stay and what their goals are

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 WHY EMPLOYEES LEAVE

By understanding the reasons behind why employees leave, organizations can

better cater to their existing workforce and influence these decisions in the future.
Oftentimes, it is low satisfaction and commitment that initiates the withdrawal
process, which includes thoughts of quitting in search of more attractive
alternatives. If administered correctly, exit interviews can provide a great resource
to why employees leave. Typically, employees are stock in their responses because
they fear being reprimanded or jeopardizing any potential future reference.

The most common reasons for why employees leave are better pay, better hours
and better opportunity. These typical answers for leaving, often signal a much
deeper issue that employers should investigate further into. By asking relevant
questions and perhaps utilizing a neutral third party provider to conduct the
interview, employers can obtain more accurate and quantifiable data. Contrary to
what most organizations believe, employees often leave due to relationships with
manager and/or treatment of employees and not compensation, as this is often a
response that employees are uncomfortable expressing to their organization
directly.

Retention Diagnostic is a rapid benchmarking process that identifies the costs and
can help uncover what affects employee loyalty, performance and engagement.

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 BEST PRACTICES OF EMPLOYEE RETENTION

Organizations may go a long way towards creating a high-retention environment by focusing on

the fundamentals. Companies might begin by defining their culture and identifying the types of
people who would thrive in that setting. Companies should follow basic new hire orientation and
onboarding plans. Recruiting and retaining great talent necessitates the investment of time, energy,
and cash. Nevertheless, all of this is for naught if employees are not positioned to flourish inside
the organisation. According to research, an employee's first 10 days are essential since the
individual is still adjusting and acclimating to the organisation. Businesses retain good personnel
by being preferred employers.

Recruitment – Presenting applicants with realistic job previews during the recruitment process
has a positive effect on retaining new hires. Employers that are transparent about the positive and
negative aspects of the job, as well as the challenges and expectations, are positioning themselves
to recruit and retain stronger candidates.

Selection – There are a plethora of selection tools that can help predict job performance and
subsequently retention. These include both subjective and objective methods and while
organizations are accustomed to using more subjective tools such as interviews, application and
resume evaluations, objective methods are increasing in popularity. For example, utilizing
biographical data during selection can be an effective technique. Biodata empirically identifies life
experiences that differentiate those who stay with an organization and those who quit. Life
experiences associated with employees may include tenure on previous jobs, education
experiences, and involvement and leadership in related work experiences.

Socialization – Socialization practices delivered via a strategic onboarding and assimilation

program can help new employees become embedded in the company and thus more likely to stay.
Research has shown that socialization practices can help new hires become embedded in the
company and thus more likely to stay. These practices include shared and individualized learning
experiences, and activities that allow people to get to know one another. Such practices may
include providing employees with a role model, mentor or trainer or providing timely and
adequate feedback.

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Training and development – Providing ample training and development opportunities can
discourage turnover by keeping employees satisfied and well-positioned for future growth
opportunities. In fact, dissatisfaction with potential career development is one of the top three
reasons employees (35%) often feel inclined to look elsewhere. if employees are not given
opportunities to continually update their skills, they are more likely to leave. Those who receive
more training are less likely to quit than those who receive little or no training. Employers that
fear providing training will make their employees more marketable and thus increase turnover
can offer job-specific training, which is less transferable to other contexts. Additionally,
employers can increase retention through development opportunities such as allowing employees
to further their education and reimbursing tuition for employees who remain with the company
for a specified amount of time.

Compensation and rewards – Pay levels and satisfaction are only modest predictors of an
employee's decision to leave the organization; however, organizations can lead the market with a
strong compensation and reward package as 53% of employees often look elsewhere because of
poor compensation and benefits. Organizations can explicitly link rewards to retention (i.e.
vacation hours to seniority, offer retention Bonus payments or Employee stock options, or define
benefit plan payouts to years of services) Research has shown that defined compensation and
rewards as associated with longer tenure. Additionally, organizations can also look to intrinsic
rewards such as increased decision-making autonomy.

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33
Effective leaders – An employee's relationship with his/her immediately ranking supervisor
or manager is equally important to keeping to making an employee feel embedded and valued
within the organization. Supervisors need to know how to motivate their employees and
reduce cost while building loyalty in their key people. Managers need to reinforce employee
productivity and open communication, to coach employees and provide meaningful feedback
and inspire employees to work as an effective team.In order to achieve this, organizations
need to prepare managers and supervisors to lead and develop effective relationships with
their subordinates. Executive Coaching can help increase an individual's effectiveness as a
leader as well as boast a climate of learning, trust and teamwork in an organization. to
encourage supervisors to focus on retention among their teams, organizations can incorporate
a retention metric into their organization's evaluation.

Employee engagement – Employees who are satisfied with their jobs enjoy their work and
the organization, believe their job to be more important, take pride in the company and feel
their contributions are impactful are five times less likely to quit than employees who were not
engaged.[19] Engaged employees give their companies crucial competitive advantages,
including higher productivity and lower employee turnover.

Employee benefits - Benefits are a critical piece of the equation in retaining employees.
Employees are looking for benefits that span more than the core basics. With a robust rewards
and benefits package and an effective benefits communication plan, employee engagement
and retention can improve. Nurturing your employee's understanding of the total value of their
benefits package and how to strategically use it will enhance their experience and total well-
being.

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 OUTSOURCING EMPLOYEE RETENTION PROGRAM

Turnover costs can have a major negative influence on a company's success. Turnover
costs can amount to more than 12% of pre-tax income for the average company and nearly
40% for enterprises in the 75th percentile for turnover rate.

Companies and managers recognise the necessity of developing an effective retention

programme, but they are not proactive in implementing one and frequently postpone it
until another day. The day rarely arrives.

Employee retention programmes might be outsourced to professionals by organisations

that lack the time or resources. Businesses might use third-party consultants to identify the
fundamental reasons for their labour issues.

By understanding the fundamental causes, personalised action plans may be developed to

meet the needs of your firm and construct a retention programme tailored to your needs.
Another advantage of outsourcing is that firms can obtain quantifiable evidence to justify
the measures required to enhance their organisation.

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 THE CRITICAL FACTORS OF RESPECTIVE
MOTIVATION THEORIES
HOW TO DEVELOP AND IMPLEMENT EMPLOYEE
RETENTION PRACTICES

NEED OF THE EMPLOYEE- Employees have multiple needs based on their

individual, family, and cultural values. In addition, these needs depend on the current
and desired economic, political, and social status; career aspiration; the need to balance
career, family, education, community, religion, and other factors; and a general feeling
of one’s satisfaction with the current and desired state of being

• WORK ENVIRONMENT - Employees want to work in an environment that is

productive, respectful, provides a feeling of inclusiveness, and offers a friendly setting

• RESPONSIBILITIES- Given that one feels competent to perform in a more

challenging capacity and has previously demonstrated such competencies, an employee
may feel a need to seek additional responsibilities and be rewarded in a fair and
equitable manner.

• SUPERVISION - Managers and other leaders more frequently than others feel a need
to teach, coach, and develop others. In addition, these individuals would seek to
influence the organization’s goals, objectives and strategies designed to achieve the
mission of the organization.

• FAIRNESS AND EQUITY - Employees want to be treated and rewarded in a fair

and equitable manner regardless of age, gender, ethnicity, disability, sexual orientation,
geographic location, or other similarly defined categories. With increased effort and
higher performances employees also expect to be rewarded more significantly than
counterparts who provide output at or below the norm. The employee’s effort and
performance at a particular level is influenced by her/his individual goals and objectives
and which would vary by each individual. An outcome or reward that is perceived to be
highly significant and important can result in a higher level of effort and performance by
the individual employee.

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• EFFORT - Even though employees may exert higher levels of effort into a position
based on a perceived significant reward, this could be a short-term success if the task
itself does not challenge or provides satisfaction to the employee

• EMPLOYEES DEVELOPMENT- Employees prefer to function in environments

that provide a challenge, offer new learning opportunities, significantly contributes to
the organization’s success, and offer opportunities for advancement and personal
development based on success and demonstrated interest in a particular area.

• FEEDBACK - Individuals prefer to have timely and open feedback from their
supervisors. This feedback should be an ongoing process during the year and not
limited to formal performance reviews once or twice per year. In addition, the
feedback should be from both the employee and the supervisor

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 EMPLOYEE ATTRITION

Employee attrition occurs when the size of your workforce diminishes over time
due to unavoidable factors such as employee resignation for personal or
professional reasons.

Employees are leaving the workforce faster than they are hired, and it is often
outside the employer’s control. For example, let’s say that you have opened a new
office designated as the Sales Hub for your company. Every salesperson must
work out of this office – but a few employees cannot relocate and choose to leave
the company. This is a typical reason for employee attrition.

But there are other reasons for attrition as well, including the lack of professional
growth, a hostile work environment, or declining confidence in the company’s
market value. Weak leadership is another factor that often drives attrition among
employees.

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 EMPLOYEE ATTRITION VS. TURNOVER

Although similar, employee attrition and employee turnover are not the same.

The biggest difference between employee attrition and employee turnover is that
turnover takes into account all terminations. This includes positions that are
refilled.

On the other hand, employee attrition includes all long-term vacancies and
position eliminations.

For this reason, it’s possible to have high employee turnover rates and still have a
growing company. But if your attrition rates are consistently high, your company
is likely shrinking in size.

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 DIFFERENT TYPES OF ATTRITION

1. ATTRITION DUE TO RETIREMENT

If two or three people have retired from your company this year, this is
statistically too small an employee group to count under attrition. However, if a
sizable chunk of your workforce retires at the same time, this can cause
attrition.
Attrition due to retirement shouldn’t be swept under the rug – your senior
professionals may choose to retire early or become independent consultants due
to factors other than age.

2. VOLUNTARY ATTRITION
This is the most common type of attrition, where employees decide to simply
quit their jobs. There can be many reasons for voluntary attrition (more on that
later) and most of them are in your control.
You should proactively try to curb voluntary attrition among high-value talent,
as this can bring down your productivity over time. For example, if a company
sees its marketing experts moving out of different business units, it’s a clear
cause for concern.

3. INVOLUNTARY ATTRITION
In this scenario, it is the company and not the employee that initiates the exit.
For example, the employee may have shown instances of misconduct in the
workplace – a common reason for involuntary attrition. Structural reasons could
also cause attrition. Mergers and acquisitions are often followed by a wave of
involuntary attrition.

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4. INTERNAL ATTRITION
Here, employees are quitting their jobs in one department to join another department. In
some cases, internal attrition is desirable, as it routes talent towards more profitable
areas. It also ensures better employee-job fitment.
But if a specific department has witnessed a high rate of attrition for one year, it merits
an investigation. Is there something missing from the job? Is the manager inadequately
skilled? These are questions that HR needs to ask and find answers to.

5. DEMOGRAPHIC-SPECIFIC ATTRITION
This is a significant concern for progressive companies trying to build an equal-
opportunities workplace. Demographic-specific attrition means that employees from a
single group – women, ethnic minorities, people with disabilities, veterans, or older
professionals – are leaving the company in droves.
You need to immediately deploy employee surveys to identify the root cause of
demographics-based attrition before it affects your workplace culture. A positive culture
can be the antidote to the quitting epidemic.

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 CALCULATE EMPLOYEE ATTRITION RATE

Calculating a company’s employee attrition rate is fairly easy. Below is a practical

example:

1. To start, find the average number of employees. We’ll use 95 people for the
purpose of our example.
2. Next, let’s work on an average by month.
3. Now, consider the number of employees who left unfilled positions over the
course of the particular month. For our example, we will use 8. Now divide 8 by
95 to reach the average headcount: 0.0842.
4. Next, multiply this average by 100 = 8.42%.

It’s important to consider this percentage within the context of your own
organization. Take into consideration how this rate has developed when
compared year-on-year or month-to-month.

You can also consider attrition rates by specific departments. Even though a
company may have a low overall attrition rate, one specific department could be
losing employees while another keeps on growing.

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 HOW TO CONTROL EMPLOYEE ATTRITION

Even the biggest and best companies in the world experience some degree of
employee attrition. It’s a natural evolution that will always be present. It’s estimated
that, on average, a company will lose 18% of its workforce annually.

In the wake of the COVID-19 pandemic and The Great Resignation, record turnover
rates have been reported across a number of sectors.

This doesn’t bode well for businesses, especially in light of the war for talent that’s
starting to emerge. Many employees have recognized their worth and are prepared to
jump ship for better opportunities. They also won’t settle for working conditions that
no longer benefit them.

For businesses, there’s another side to attrition. The phasing out of a job role doesn’t
always have to mean the loss of an employee. Valued, loyal talent with institutional
knowledge might welcome new training opportunities.

The key is to look down the pipeline well in advance and inform employees of
potential opportunities.

Schneider Electric is a great example of a company that looked inward and created
its own talent marketplace for employees. They use their company as a talent
network and focus on retaining staff and reskilling them to fill new roles.

The argument for reducing employee attrition and turnover is multifaceted, but the
cost is a major factor. When an employee leaves, the cost implication can be
enormous.

Below are some of the best ways to control employee attrition:

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1. ENSURE EMPLOYEE RECOGNITION
Employees want to know they’re appreciated and that their hard work is seen and
recognized. Meaningful recognition boosts employee morale and drives employee
engagement. Engaged employees are less likely to look for alternative job opportunities.

2. OFFER TRAINING AND DEVELOPMENT PROGRAMS

Promoting professional growth is important, and employees who feel the company has
invested in them are less likely to leave. It also means that if their jobs become obsolete, the
Schneider Electric model of looking inward and upskilling existing talent is easily
implemented.

3. FOCUS ON EMPLOYEE WELL-BEING

Employee wellness has a major impact on every business. Looking after employees can
transform their lives and make them happier, more productive, and less stressed.

4. ASK FOR AND GIVE FEEDBACK

Employees that feel heard also feel appreciated. Actively asking for feedback and
supplying it (in a positive, constructive way) boosts employee satisfaction.

5. CONTRIBUTE TO CAREER GROWTH AND PLANNING

Investing in employees’ futures and facilitating growth promotes loyalty and reduces
turnover. Creating a career plan that includes the company highlights an employee's
future if they remain on board.

6. ENSURE PROPER EMPLOYEE BENEFITS

Employees want more than just a paycheck. They want benefits and perks that add real
value to their lives. The most sought-after benefits include:
Health insurance
Paid time off
Disability and life insurance
Flexible and remote working options

7. CREATE FLEXIBLE WORK MODELS TO KEEP VALUED TALENT

ENGAGED IN SOME CAPACITY
Remote work has changed how we view working hours, and flexibility is the new
buzzword.
Creating a flexible working model can also reduce attrition if you apply some
creativity. For example, you can keep older workers part-time as mentors or trainers. Or
you can welcome working mothers back with more creative options for on-ramp and
off-ramp.

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8. CONDUCT THOROUGH EXIT SURVEYS
Conducting thorough exit interviews provides greater insight into why an employee is
leaving and what didn’t work. It’s the ultimate way of learning from mistakes and bringing
insights to leaders to rectify the issues so that they don’t reoccur.

9. CREATE AND ENGAGE AN ALUMNI NETWORK

An alumni network creates an extended workforce of contractors and potential return
employees. A thriving alumni network is a great advertisement for your business. Plus,
they’re more likely to refer others to your company as new hires.

10. REDUCE YOUR EMPLOYEE ATTRITION RATE

Reducing your employee attrition rate isn’t always easy, but it is certainly possible.
The trick is to know your employees. Be aware of their personal aspirations and dreams and
run your organization with a human touch. An appreciated and rewarded employee is a
happy one — and is much less likely to leave.

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 CHAPTER 01

CONSUMER
RETENTION
SECTION B

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 CUSTOMER RETENTION DEFINITION

Customer retention refers to a company’s ability to turn customers into

repeat buyers and prevent them from switching to a competitor. It
indicates whether your product and the quality of your service please
your existing customers. It is also the lifeblood of most subscription-
based companies and service providers.

Customer retention strategies are the processes and initiatives businesses

put in place to build customer loyalty and improve customer lifetime
value.

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 WHY IS CUSTOMER RETENTION IMPORTANT?

Keeping your current customers happy is generally more cost-effective

than acquiring first-time customers. According to the Harvard Business
Review, acquiring a new customer can be five to 25 times more expensive
than holding on to an existing one.

ACQUIRING A NEW CUSTOMER CAN BE FIVE TO 25

TIMES MORE EXPENSIVE THAN HOLDING ON TO AN
EXISTING ONE.
__

HARVARD BUSINESS REVIEW

You do not need to spend big on marketing, advertising or sales outreach. It is easier to
turn existing customers into repeat ones since they already trust your brand from
previous purchases. New customers, however, often require more convincing when it
comes to that initial sale. Customer loyalty will not just give you repeat business.

Loyal customers are more likely to give free recommendations to their colleagues,
friends and family. Creating that cycle of retained customers and viral marketing is one
way your company can cultivate customer loyalty for long-term success.

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 CUSTOMER RETENTION BENEFITS

Cost savings: Customer retention is generally more cost-effective than

acquiring first-time customers
Positive word-of-mouth marketing: Loyal customers are more likely
to tell their friends and family about your brand
A better bottom line: Increasing retention rates by just 5 per cent can
increase revenue by 25 percent to 95 percent

KEY CUSTOMER RETENTION METRICS

KEY
CUSTOMER
RETENTION
METRICS

CUSTOMER CUSTOMER CUSTOMER

RETENTION LIFETIME CHURN
RATE VALUE RATE

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 CUSTOMER RETENTION RATE

The customer retention rate is the percentage of previous customers who remained
loyal to your business over a period of time. To calculate it, pick a period of time you
want to measure and then identify the following:

1. Number of customers at the start of a given time period (S)

2. Number of customers at the end of that period (E)
3. Number of new customers added over the duration of that period (N)

Then, you can calculate your customer retention rate (X) with the following formula:

Customer retention formula

((E – N) / S) * 100 = X

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 CUSTOMER ATTRITION RATE

A less direct indicator of customer retention is your attrition rate—the percentage of

customers lost during a period of time. Companies that struggle with customer
retention usually have a high attrition rate.

Customer attrition rate formula

(Y/X) *100 = Z

Low retention rates or high attrition rates could be bad signs. They may signal that
something about your customer experience is not going well. But do not panic—there
are several changes you can make to turn the attrition around.

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6 STRATEGIES TO IMPROVE CUSTOMER RETENTION

1. Deliver fast support

2. Personalize interactions
3. Invest in employees
4. Meet customers where they are
5. Gather customer feedback
6. Incentivise loyalty

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 CHAPTER 02

LITERATURE REVIEW

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Sangita Gorde - SKN Sinhgad School of Business Management,Pune
Employee Retention is a challenging concern for the organization. This study
stressed Employee Retention strategies. Employees are the assets of the
organization. To retain skilful and committed employees in the organization,
management should take care of employee satisfaction. Find out the reasons for
employee turnover and overcome this. The purpose of this study is to prove
how employee retention is essential in this day and age, and if the organizations
are not awake to the situation and immediate actions are not taken to that effect,
what repercussions lay ahead and how they would affect the organization and
the industry.

Glorious Sun School of Business and Management, Donghua University,

Shanghai, China by Ming Xu, Bomboma Kalgora
Employees are the most valuable assets of an organization. Their significance to
organizations calls for not only the need to attract the best talents but also the
necessity to retain them for the long term. This paper focuses on reviewing the
findings of previous studies conducted by various researchers with the aim to
identify determinant factors of employee retention. This research closely looked
at the following broad factors: development opportunities, compensation, work-
life balance, management/leadership, work environment, social support,
autonomy, training and development. The study reached the conclusion that
further investigations need to be conducted regarding employee retention to
better comprehend this complex field of human resource management.

Veera Valtola: Author of the Theseus paper for Consumer Retention

The research motivates why customer retention is a needed practice for
companies to maintain their customer base and increase its value of it. The
results endorse the theoretical framework by justifying the usage of customer
retention management within the company. The confidentiality of the thesis and
its one-company focus limit the research. The thesis is classified and will not be
published.

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 CHAPTER 03

RESEARCH
METHODOLOGY

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 RESEARCH METHODOLOGY

The project was carried out in steps that included the collection of both primary and
secondary data. The secondary data was first gathered. This data was gathered via reading a
variety of publications such as books, journals, periodicals, newspaper stories, and so on, as
well as searching for similar stuff online (i.e., on the Internet).
As a result, the project work was carried out using the data gathered.

This project effort employs Descriptive and Exploratory Research Methods.

The present study is descriptive in nature, as it seeks to discover ideas and insights to bring
out new relationships. Research design is flexible enough to provide opportunity for
considering different aspects of the problem under study. It helps in bringing into focus some
inherent weaknesses in enterprise regarding which in-depth study can be conducted by
management.

DATA COLLECTION-SOURCES AND METHODS

Primary data: Primary data has been collected by the following methods:
1. Questionnaire
Secondary data: Secondary data has been collected by the following methods:
2. Websites
3. HR books

Sample size
20 employees of Reliance Store

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 OBJECTIVES

1. To Offer competitive compensation and benefits packages.

2. To Encourage employee development and growth.
3. To Provide clear and consistent communication.
4. To Foster a positive and collaborative work environment.
5. To Offer flexible work schedules and work-from-home options.
6. To Recognize and reward outstanding performance.
7. To Create career development and succession plans.
8. To Introduce a culture of engagement and motivation.
9. To Support work-life balance initiatives.
10. To Offer meaningful feedback and coaching.

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57
 IMPORTANCE OF EMPLOYEE RETENTION

Retaining top talent is key to promoting organizational growth. Due

to worker shortages, effective retention strategies have become
increasingly prevalent.
When positions remain unfilled, productivity suffers and employees
get burned out.
When valued employees leave, it's a downer for their team members.
Effective retention strategies can boost morale and make the
workplace more positive.
HR leaders can spend more time investing in strategic initiatives by
decreasing the amount of time spent interviewing and onboarding
new hires.
Employee engagement is directly linked to retention. Organizations
that prioritize retention efforts have highly engaged employees.
The longer an employee stays, the more they can develop their
expertise and the more value they provide the company.
Employee feedback drives growth at all levels of your organization.
When leaders are transparent, employees feel less left in the dark.
Exit surveys help you gain valuable insights from departing
employees and improve the employee experience for those who
remain.

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 LIMITATIONS OF THE STUDY

Time is very short for research, so this is very difficult to get knowledge about
everything.
Since the filling of questionnaire and interviews need special attention so maybe
the employees are less interested in entertaining.
The information collected through the questionnaire is subject to the willingness
of the respondent to respond.

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 SECONDARY DATA

CASE STUDY
Meritrust Credit Union Uses Surveys to Understand Employee
Retention Drivers

HR leaders at Meritrust Credit Union were focused on retention and turnover

in 2022. They wanted to take a deeper dive into the reasons employees
leave–and why they stay. Partnering with the People Insights Team at
Quantum Workplace, they were able to uncover key information that shed
light on just how critical company culture is to their retention strategy.
When asked to rate “it would take a lot to get me to leave this organization,”
Meritrust followed up with a logic-based response based on how employees
answered the question.
If they responded favourably, they were asked “what makes you stay at this
organization?”
If they responded unfavourably, they were asked “what would make you
leave this organization.”
Meritrust asked every employee a variation of the question and then turned
the responses into a custom survey demographic. What did they find? The
primary reasons people stay at Meritrust were:
Workplace culture (90%)
Career advancement opportunities (89%)
Relationship with their manager (84%)

This proved that culture and career growth are imperative for retention and
engagement–something leaders at Meritrust had been trying to improve all
along.

susannah william fernandes 60

CASE STUDY
Mutual of Omaha Leverages Pulse Surveys to Uncover
Insights and Retain Talent

A Fortune 500 insurance company, Mutual of Omaha was founded on a

simple but powerful principle: to help people in their time of need and
protect those they love the most.

In recent years, the insurance and financial services industries have become
increasingly competitive for talent. Mutual of Omaha was having a hard time
recruiting for technology roles—and was seeing high turnover within the first
two years of employee tenure.

The company knew that having the right insights would help them
understand and troubleshoot turnover effectively—so they turned to
Quantum Workplace’s employee engagement platform.

Mutual of Omaha utilized a broad range of employee surveys to capture

feedback at various stages of the employee journey. In addition to leveraging
an annual engagement survey, Mutual of Omaha also launches regular pulse
surveys to capture critical feedback on important topics.

In 2021, they launched a pulse to understand employee perceptions and

preferences related to post-pandemic work arrangements.
In 2022, they launched a “War for Talent” pulse to get a feel for how
equipped the company was (or wasn’t) to attract, engage, and retain top
talent.
A strategic employee listening strategy has empowered Mutual of Omaha to
gain clarity around what is driving people to stay, what is driving them to
leave, and what leaders can do to improve retention and engagement. The
company has seen measurable improvements:

94% favorability ratings from new hires after 30 days of employment

93% of associates making progress on a learning and growth plan (a key
magnet in the company’s retention strategy)
86% employee retention rate

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 CHAPTER 04

DATA ANALYSIS
&
DATA INTERPRETATION

susannah william fernandes

62
 RATE THE FOLLOWING

The data represents different segments, which include work culture, workplace
hygiene, compensation, training and development activities, resource management,
diversity and acceptance. The blue colour represents a lower rating, the red colour a
two-star rating, the yellow colour a three-star rating, the green colour a four-star rating
and the dark pink colour a five-star rating. the data evaluation of the different
employers revealed different situations, some found good to best remuneration and
others not, some employees found good resource management and diversity; the few
newcomers received the best training and were not yet acceptance in the company

susannah william fernandes 63

Q. I am able to reach my full potential in this organization

Interpretation: The employees of the organisation have given data where 50%
of employees agree that they reach the potential goal and 25%people yet are
figuring to reach their goal and 25% disagree to reach their potential goal

Q. My opinions are valued and considered

Interpretation: Company employees provided data indicating that 75% of

employees felt that their opinion was valued and 25% gave a neutral verdict,
feeling that their opinion was not valued or taken into account

susannah william fernandes 64

Q.I am comfortable working with my team members

Interpretation: Company employees have provided data indicating that 50% of

employees are neutral about working with their team members and 25%Strongly
Agree that they feel very comfortable working with their team members and
25% agree that they feel very comfortable working with their team members

Q. I have a clear understanding of my career path in this organisation.

Interpretation: Company employees provided data indicating that 50% of

employees have agreed on having a clear understanding of their career path in
the organisation and 50% gave a neutral verdict, of having a clear understanding
of their career path in the organisation

susannah william fernandes 65

Q. I get timely feedback from my manager

Interpretation: Company employees have provided information where 50% of

employees have given neutral feedback from their managers, which is
sometimes not given in a timely manner. 25% of employees have agreed that
their manager gives timely feedback and 25% of employees have strongly
agreed that their manager gives timely feedback

Q. I have been timely promoted in this job

Interpretation: Company employees report that 50% of employees are

promoted on time, while 25%Disagreed of employees believe they are promoted
on time and another 25% believe they are promoted on time.

susannah william fernandes 66

 CHAPTER 05

FINDINGS

susannah william fernandes 67

 FINDINGS

The most significant factor in enhancing employee retention in the firm is the
interaction between employees and management.  Salary, income, or monetary
advantage is always an incentive to stay with the organisation. Competitors' high-
paying positions will draw skilled workers otherwise. 
According to the overall analysis, the majority of employees have clearly embraced
the value of organisational culture in employee retention. They are pleased with the
company's culture. As a result, they are not considering changing occupations.
The majority of respondents believe that the work environment (facility,
workplace, and campus) influences employee job satisfaction and, ultimately,
employee retention.
It was discovered that the majority of employees place a high value on supervision,
direction, and guidance in the organisation.
The majority of respondents believe that benefits such as health and welfare,
retirement benefits, and paid time off facilities aid in work-life balance.
Respondents believe work-life programmes (family support, personal assistance)
help people balance their personal and professional lives.
It was discovered that career opportunities provide employees with contentment.
Motivation requires effective leadership.

susannah william fernandes 68

 CHAPTER 06

CONCLUSION

susannah william fernandes 69

 CONCLUSION

Human resources are complex and not easy to understand. These are the assets which
can make as well as break an organization. Retaining them will help in the long-term
growth of an organization and will also add to their goodwill. But the most difficult
task faced by an organization today is retaining as well as satisfying these resources.
Although the research paper tried its level best to reveal the various research works
done and the contributions forwarded by various researchers in the area of employee
retention, still much scope remains for more exploration in the field of employee
retention and by taking into consideration the factors like compensation practices,
leadership and supervision, career planning and development, alternative work
schedule, working conditions, flexible working hours etc. Needless to say that these
efforts should be conducted by HR professionals.
Employee retention isn't solely a concept or an application, it's a life taken to speculate
within the way forward for the corporate for a corporation is additionally well-known
by the workers it employs and also the ways in which it retains them. Holding a crucial
worker would demand the leader to reap the sensation of job security and job
satisfaction in the mind of the workers. Efficacious communication helps workers to
spot the organisation and produce openness and religion. Impelled workers don't seem
to be solely committed to a lot of output however conjointly influence a much better
work culture for a protracted run. This helps in developing a way of loyalty and evolves
a lot of economical and effective.

susannah william fernandes 70

 CHAPTER 07

SUGGESTION
&
RECOMMENDATION

susannah william fernandes 71

 SUGGESTION

These are the few suggestion while doing employee retention

Prioritize professional development

Your best employees are already great at what they do, but they want to continue
enhancing their skills to become even better. Ensuring that professional
development and growth are a top priority at your organization can help them want
to stick around. You can also build a mentorship program to pair senior-level
executives with your high performers.
Communicate!
Lack of communication is the root of many employee frustrations. Make sure your
business is creating channels for honest, specific feedback from and to your
employees and taking advantage of ways to provide praise and constructive
criticism in real-time. Top-down communication can quickly become messy and
convoluted. Instead, focus on direct, one-on-one conversations when possible. And
offer digital spaces such as employee communities to allow workers to come
together
Encourage Collaboration
Nobody wants to work in a vacuum. Harvard Business Review found that teams do
well when executives invest in supporting social relationships, demonstrate
collaborative behaviour themselves, and create what they call a “gift culture”—one
where employees feel that interactions with leaders and colleagues is something
valuable and generously offered.

susannah william fernandes 72

 RECOMMENDATION

These are the few methods recommended while doing employee

retention
Paid leave. Paid time off beyond traditional vacation and sick leave can help
employees reduce stress and create better work/life integration
Career development. Employees feel more engaged when they believe that
their employer is invested in their growth and career development.
Educational assistance. Investing in employee career growth through enhanced
tuition assistance and training programs can pay off.
flexible work options. flexible work options are the most sought-after work
benefit today. Many employees are seeking fully remote positions that allow
them to work from anywhere. In workplaces where fully remote options are not
feasible, hybrid arrangements that allow employees a couple of days each week
to work from home are popular.

susannah william fernandes 73

 CHAPTER 08

BIBLIOGRAPHY
&
WEBLIOGRAPHY

susannah william fernandes 74

 WEBLIOGRAPHY
https://www.futurelearn.com/info/courses/introduction-to-international-human-resources-
management/
https://borgenproject.org/topic-1-introduction-to-human-resources-management/
https://www.techtarget.com/searchhrsoftware/definition/employee-retention.
https://www.tutorialspoint.com/employee_retention/employee_retention_introduction.html
https://www.netsuite.com/portal/resource/articles/human-resources/employee-
retention.shtml
https://www.spiceworks.com/hr/engagement-retention/articles/what-is-attrition-complete-
guide/
https://customerthink.com/5-customer-retention-books-you-must-read-in-2022/
https://www.zendesk.com/in/blog/customer-retention/
https://www.betterup.com/blog/employee-attrition
https://www.eqtble.com/post/attrition-vs-turnover
https://www.linkedin.com/pulse/employee-turnover-vs-attrition-david-o-bryant/
https://www.academia.edu/3691935/Customer_retention
https://www.netsuite.com/portal/resource/articles/human-resources/employee-retention-
turnover.shtml
https://www.google.com/search?
q=employee+attrition&rlz=1C1CHBD_enIN915IN915&sourceid=chrome&ie=UTF-8
https://en.wikipedia.org/wiki/Employee_retention#Join,_stay,_leave_model
https://en.wikipedia.org/wiki/Maslow%27s_hierarchy_of_needs
https://www.bamboohr.com/resources/hr-glossary/employee-turnover
https://www.slideshare.net/anujithkr/applications-of-mis-in-hrm
https://indiafreenotes.com/mis-for-human-resource-management/
https://www.go2hr.ca/retention-engagement/5-keys-to-employee-retention
https://www.researchgate.net/publication/335677274_A_REVIEW_OF_LITERATURE_O
N_EMPLOYEE_RETENTION
https://www.netsuite.com/portal/resource/articles/human-resources/employee-retention-
benefits.shtml
https://www.paycor.com/resource-center/articles/10-tips-for-great-employee-
retention/#:~:text=HR%20and%20people%20managers%20should,three%20things%20that
%20help%20retention.

susannah william fernandes 75

 BIBLIOGRAPHY

https://www.paycor.com/resource-center/articles/10-tips-for-great-employee-
retention/#:~:text=HR%20and%20people%20managers%20should,three%20things%20that%2
0help%20retention.
IOSR Journal of Business and Management (IOSR-JBM)
Journal of Leadership, Accountability and Ethics Vol. 12(2) 2015
Hiltrop, J.M. (1999) The Quest for the Best: Human Resource Practices to Attract and Retain
Talent. European Management Journal, 17, 422-430.
Arnold, E. (2005) Managing Human Resources to Improve Employee Retention. Health Care
Manager, 24, 132-140.
Ramlall, S. (2004). A review of employee motivation theories and their implications for
employee
retention within organizations. Journal of American Academy of Business, 9, 52-63
Sheridan, J.E. (1992) Organizational Culture and Employee Retention. Academy of
Management Journal, 35, 1036- 1056. http://dx.doi.org/10.2307/256539 [Citation Time(s):1]
Bidisha, L. D and Mukulesh, B. (2013) Employee Retention: A Review of Literature. Journal
of Business and Management, 14, 8-16

susannah william fernandes 76

 CHAPTER 09

APPENDIX

susannah william fernandes 77

Employee Retention Survey

My name is Susannah Fernandes, and I am conducting this survey for my Black

Book project. I would be grateful if you could complete the survey and poll and vote
with me.

Thank you.

Name *

Email *

Rate the following *

Please rate the following rows based on the number of stars ★ in each column
★ ★★ ★★★ ★★★★ ★★★
★★
Work culture

Workplace hygiene

Training & development

activities

Compensation

Resource management

Diversity

Acceptance

susannah william fernandes 78

I am able to reach my full potential in this organization *

Strongly Agree

Agree

Neutral

Disagree

Strongly Disagree

My opinions are valued and considered *

Strongly Agree

Agree

Neutral

Disagree

Strongly Disagree

I am comfortable working with my team members *

Strongly Agree

Agree

Neutral

Disagree

Strongly Disagree

I have a clear understanding of my career path in this organisation. *

Strongly Agree

Agree

Neutral

Disagree

Strongly Disagree

susannah william fernandes

79
I get timely feedback from my manager *

Strongly Agree

Agree

Neutral

Disagree

Strongly Disagree

I have been timely promoted in this job*

Strongly Agree

Agree

Neutral

Disagree

Strongly Disagree

Could you tell me a little bit about the company that I could not ask in my retention survey?

susannah william fernandes 80