Factors Influencing Employee Retention
A number of factors influencing employee retention in the organizational context are as follows.
1) Human Resource Management Practices
Human resource management practices affect organizational outcomes by shaping employees’ behaviors and attitudes, molding employee’s perceptions of what the organization is like, and influencing their expectations of the nature and depth of their relationship with the organization. A high-commitment human resource management system tends to motivate employees, and they become more committed to their jobs and organization, which ultimately results in high employee retention.
2) Human Resource Factors
Employee retention is influenced by several factors influencing employee retention, which are as follows:
i) Person-Organization Fit
The concept of organizational fit identifies convergent goals and values between the individual and the organization as an important element in an individual’s willingness to cooperate in an organization. Therefore, a fit between the person and the job ensures that the employee is happy and productive and, at the same time, sticks to the organization.
It is the most critical issue when it comes to attracting and keeping talent. Fair compensation is the cornerstone of the contractual and implied agreements between employees and employers, the underlying assumption being that money can influence behavior. Organizations often pay superior compensation for attracting and retaining the best employees.
iii) Challenging Assignments
Employees who feel that their organization failed to give them challenging and interesting work, freedom to be creative, opportunities to develop new skills, and autonomy and control are more likely to express negatively and lack loyalty toward their organization. Therefore, a challenging job is a pre-condition for employee retention.
3) Organizational Factors
Various organizational factors influencing employee retention are as follows:
Leaders are central to the process of creating cultures, systems, and structures that foster knowledge creation, sharing, and cultivation. The quality and style of leadership influence employee commitment, positively or negatively, as the case may be, which impacts employee retention. A caring and strong leadership would give direction, support, and motivation to employees, which will enhance their intention to stay in the organization.
Management philosophy and style, communications protocol and policies, rituals and taboos interact to create the uniqueness of each organization. People often join an organization or seek employment within a particular industry because they find its culture appealing. Thus, organizations intending to retain employees need to examine how effective their organizational culture and structure is from time to time.
iii) Communication and Consultation
Effective communication of an organization’s goals, vision, strategies, and business policies or communication of facts and information and communication structure affects employee’s identification with the organization and builds trust. Therefore, for the success of employee retention programs, regular two-way communication, particularly face-to-face, is an important factor in establishing trust and a feeling of being valued.
iv) Team Working
Employees stay when they have strong relationships with their work colleagues. Organizations encourage team-building, project assignments involving work with peers, and opportunities for social interaction both on and off the job. Interactions with peers serve as an effective psychological function by providing emotional support against the stresses of the organization’s socialization initiatives and uncertainties of the work setting. A workplace with supportive co-workers tends to retain employees in the long run.
v) Working Environment
For some employees, personal priorities or circumstances make the difference between leaving and staying. Individuals will stay with an organization that clearly considers and cares for their career priorities (life stage needs), health, location, family, dual career, and other personal needs.
vi) Organizational Commitment
Commitment develops as a result of experiences of satisfying the employee’s needs and motivation and is compatible with their values. A strong commitment motivates the employees to have a strong belief and accept organizational goals and values and to willingly exert considerable effort on behalf of the organization and a definite desire to maintain organizational membership.