Employee retention

Hiring a new employee is a fundamental process that requires organizational resources, starting with the recruitment process itself, selection from among several candidates, and finally training, including learning the fundamentals of the job, organizational values, and the uniqueness of the role. The initial expectation setting between the HR manager or recruitment officer and the new employee is supposed to prepare the groundwork for the employee's integration into the organization, with the expectation that they will remain in their role until they fully utilize it.

In today's world, the abundance of opportunities and multiple workplaces raise the threat of employee departures, whether to a similar field or to a competing organization. An employee's departure triggers changes at all levels of the organization, and a high turnover rate poses a real threat that companies try to address. In this article, we will try to understand some of the ways companies take to encourage employees to stay, and we will try to answer or at least understand the question -

"How will we know which employee is worth investing resources in for the long term? Who will stay with us throughout the journey and who will disappear after a few experiences?" (Ghosh et al. 2013)

The costs of the recruitment process and training new employees can cost employers between approximately 90%-200% of a veteran employee's annual salary. In addition, employee departures undermine organizational stability and also affect intra-organizational social life, whether by changing dynamics or harming team performance, decreasing customer service levels, and raising negative feelings among employees who "remained" in their previous role. It has also been found that employee departures increase the accident rate. (Lee,J, et al 2016)

On the professional level, the departure leaves a gap in the professional front of the organization, productivity decreases due to the learning curve involved in understanding the work and organization for new employees. Another important point is that organizational intellect loses its value - people with professional knowledge leave, reducing the percentages of accumulated knowledge in the company. The gap can be filled, but the filling process takes time, and especially resources in the recruitment, selection, and training process. (Ghosh et al. 2013)

Ganco and colleagues (2015) examined and found that the rise and spread of internal enforcement of organizational rules helps maintain stability in the characteristic of "employee transfers to a different company". The study examined organizations using patent enforcement as a way to retain employees, by maintaining structured legality within the company, and separating between "us" the organization, and "them" the competitors.

Moreover, it was found that the more a company is considered "tougher" in terms of rules and reputation, the lower the percentages of employee transfers to a competing company. An important point is that the "reputation method" works when employees have stable ideas similar to the company's lines, but not when employees are "fluid" in their thinking.

Another thing an organization can do to keep its employees close is to offer support systems, through teamwork, evaluation discussions, and an open-door policy. In a study by Cho and colleagues (2009) that examined 416 hospital employees in the United States, it was found that the support provided by the organization, as perceived by the employee, and the organizational commitment to employees, manages to reduce the "intention to leave" for most employees. However, when looking at the "intention to stay" in the organization, it was found that only the perceived support of the organization by the employee increased the intention to stay.

So what makes employees stay?

1. Sense of satisfaction - In a study by Lee et al. (2016) that examined the weight of the feeling of satisfaction at work, it was found that the feeling of "satisfaction", from the role and from the organization, has a slight but stable effect on the decision to leave the role, and plays a more significant role than "additional alternatives existing in the market". That is, the feeling of satisfaction in the workplace will have more influence than a competing role existing in the market.
2. Sense of control - It was found that people who were in control of their ability to stay or leave work experienced more satisfaction from their work time, and role implementation was simpler for them and also influenced the decision to stay or leave and their subsequent job search behavior. (Lee,J, et al 2016)
3.  Level of dedication - In an experiment conducted at T&D, it was found that employees with a high level of dedication will stay longer, and the trait of dedication constitutes about 40% of the decision.
4.  Transparency of company goals.
5.  Autonomy - Opportunity for independent thinking and action within the role, and control over the pace of work. It was found that early retirement is related to a low level of autonomy.
6.  Commitment - Employees with a high level of commitment are willing to give of themselves to develop within the organization. (Ganco et al 2015)

 

In conclusion, employees want to stay in a place where they feel they are part of the decision-makers and where they can exercise independent thinking within the role. Some of the reasons for leaving are related to dissatisfaction with relationships with other employees, lack of support from management, or lack of opportunities to grow in the role.

What does keep employees in their roles: the existence of meaningful and challenging work, opportunities to flourish, empowerment of the role/work/organization, and viewing the employee as a person with traits and emotions.

For more details on employee traits and in general- https://logipass.net/en/reports?tab=1

 

References:

Cho, S., Johanson, M. M., & Guchait, P. (2009). Employees intent to leave: A comparison of determinants of intent to leave versus intent to stay. International Journal of Hospitality Management, 28(3), 374-381.‏

Ganco, M., Ziedonis, R. H., & Agarwal, R. (2015). More stars stay, but the brightest ones still leave: Job hopping in the shadow of patent enforcement. Strategic Management Journal, 36(5), 659-685.‏

Ghosh, P., Satyawadi, R., Prasad Joshi, J., & Shadman, M. (2013). Who stays with you? Factors predicting employees' intention to stay. International Journal of Organizational Analysis, 21(3), 288-312.‏

Li, J. J., Lee, T. W., Mitchell, T. R., Hom, P. W., & Griffeth, R. W. (2016). The effects of proximal withdrawal states on job attitudes, job searching, intent to leave, and employee turnover. Journal of Applied Psychology, 101(10), 1436.‏

By: Daniel Danino.

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