Employee Retention 1

Managing Retention Cost of turnover and replacement Types of Turnover Involuntary turnover Voluntary turnover out of company control Voluntary turnover that company can control Turnover and performance Increases costs Decreases productivity Functional vs. Dysfunctional Turnover

Employee Separation Reasons for employee separations: Pressures on firms to remain competitive and efficient Decline in employee commitment to individual employers The importance of managing separations: Transitions of employees out of the firm go smoothly. Continuing operations of the firm are not disrupted. Important professional relationships are not damaged. Types of separations Reductions-in-force, turnover, and retirements

Strategies for Avoiding Layoffs Long-term Hiring freeze Attrition Early retirement incentives Cross training Short-term Sub-contracting labor Voluntary leaves Across-the-board salary reductions Redeploying employees

Why Do People Leave?

Why Do People Leave? Desirability of Leaving Ease of Leaving Job satisfaction “Shocks” Career progression Ease of Leaving Labor market conditions Human capital (education and training) Switching costs

Strategies for Improving Retention Compensation matters Base salary and benefits for membership Incentives for motivation Keep costs competitive Remove toxic manager and employees Cultivate trust and respect Customize the employment relationship Job design and employee development

Analyzing Turnover Diagnosing retention problems Active: Employee surveys Active: Exit interviews Passive: Research and HRIS data mining How much is too much turnover? Depends on the organization Depends on the position

How to Retain High Performers?