Employee retention Employee retention refers to the ability of an organization to retain its employees.

Employee retention can be represented by a simple statistic (for example, a retention rate of 80% usually indicates that an organisation kept 80% of its employees in a given period). However, many consider employee retention as relating to the efforts by which employers attempt to retain employees in their workforce. In this sense, retention becomes the strategies rather than the outcome. In a Business setting, the goal of employers is usually to decrease employee turnover, thereby decreasing training costs, recruitment costs and loss of talent and organisational knowledge. By implementing lessons learned from key organizational behavior concepts employers can improve retention rates and decrease the associated costs of high turnover. However, this isn't always the case. Employers can seek "positive turnover" whereby they aim to maintain only those employees who they consider to be high performers. In order to retain employees and reduce turnover managers must meet the goals of employees without losing sight of the organization's goals, thereby creating a "win-win" situation. Valence and expectancy theories provided some of the earlier guidance for retaining employees. Valence is the degree to which the rewards offered by an organization align with the needs employees seek to fulfill. High valence indicates that the needs of employees are aligned well with the rewards system an organization offers. Conversely, low valence is a poor alignment of needs with rewards and can lead to low job satisfaction and thereby increase turnover and decrease retention. Expectancy theory details has several factors that can lead to high job satisfaction and high retention rates for organizations. Increasing expectancy in an organization can be done by training employees and thereby making them more confident in their abilities. Increasing instrumentality within an organization will be part of implementing an effective rewards system for attainment of specific goals and accomplishments. [1] However, while these theories may be valid they provide little practical assistant for business managers or human resource practitioners. More modern studies relating

to employee engagementdemonstrate that by developing a range of strategies that address various drivers of engagement, many positive outcomes can be achieved. These outcomes include higher profitability, improved customer satisfaction, lower absenteeism and lower accident rates as well as higher employee retention

Turnover (employment)

In a human resources context, turnover or staff turnover or labour turnover is the rate at which an employer gains and loses employees. Simple ways to describe it are "how long employees tend to stay" or "the rate of traffic through the revolving door." Turnover is measured for individual companies and for their industry as a whole. If an employer is said to have a high turnover relative to its competitors, it means that employees of that company have a shorter average tenure than those of other companies in the same industry. High turnover may be harmful to a company'sproductivity if skilled workers are often leaving and the worker population contains a high percentage of novice workers. In the U.S., for the period of December 2000 to November 2008, the average total nonfarm seasonally adjusted monthly turnover rate was 3.3%. However rates vary widely when compared over different periods of time or different job sectors. For example, during the period 2001-2006, the annual turnover rate for all industry sectors averaged 39.6% before seasonal adjustments, during the same period the Leisure and Hospitality sector experienced an average annual rate of 74.6%.

Causes of high or low turnover High turnover often means that employees are unhappy with the work or compensation, but it can also indicate unsafe or unhealthy conditions, or that too few employees give satisfactory performance (due to unrealistic expectations, inappropriate processes or tools, or poor candidate screening). The lack of career opportunities and challenges, dissatisfaction with the job-scope or conflict with the management have been cited as predictors of high turnover.[7] Low turnover indicates that none of the above is true: employees are satisfied, healthy and safe, and their performance is satisfactory to the employer. However, the predictors of low turnover may sometimes differ than those of high turnover. Aside from the forementioned career opportunities, salary, corporate culture, management's recognition, and a comfortable workplace seem to impact employees' decision to stay with their employer.

How to Improve Employee Retention: Motivation is Not Enough

Bonuses, vacation days, office parties, and many of the tools in a business owner's arsenal revolve around rewarding employees for a job well done and motivating them to produce similarly stunning results in the future. But Murphy says that leaders who dole out these types of perks are only focusing on half of the picture. There are "two issues generally going on with employees at any given time: there are 'shoves,' things that demotivate people, and then there are 'tugs,' the things that motivate you, that tug at you to stay at the organization," he says. While these factors will differ for every employee, leaders often make the mistake of focusing on the motivators without adequately considering what rubs people the wrong way.