Employee retention is a process in which the employees are encouraged to remain with the organization for t

period of time or until the completion of the project. Employee retention is beneficial for the organization asw

Employees today are different. They are not the ones who don’t have good opportunities in hand. As soon as
dissatisfied with the current employer or the job, they switch over to the next job. It is the responsibility of th
retain their best employees. If they don’t, they
would be left with no good employees. A good employer should know how to attract and retain its employees. Reten
major

                                             

  <<Compensation>>                        <<Environment>>                        <<Gro

                                   

                 <<Relationship>>                                                      

Employee retention would require a lot of efforts, energy, and resources but the results are worth it.

Compensation
process. The employees always have high
Compensation constitutes the largest part of the employee retention
regarding their compensation packages. Compensation packages vary from industry to industry. So an a
compensation package plays a critical role in retaining the employees.

Compensation includes salary and wages, bonuses, benefits, prerequisites, stock options, bonuses, vaca
While setting up the packages, the following components should be kept in mind:
Salary and monthly wage: It is the biggest component of the compensation package. It is also the most co
comparison among employees. It includes

o Basic wage

o House rent allowance

o Dearness allowance
 o City compensatory allowance

                     

Salary and wages represent the level of skill and experience an individual has. Time to time increase in the salarie
employees should be done. And this increase should be based on the employee’s performance and his con
organization.

Bonus: Bonuses are usually given to the employees at the end of the year or on

Economic benefits: It includes paid holidays, leave travel conces

Long-term incentives: Long term incentives include stock options or stock grants. These incentives help reta
the organization's startup stage.

Health insurance: Health insurance is a great benefit to the employees. It saves employees money as well a
peace of mind that they have somebody to take care of them in bad times. It also shows the employee that t
cares about the employee and its fami

After retirement: It includes payments that an Employee gets after he retires like EPF (Employee Provide

Miscellaneous compensation: It may include employee assistance programs (like psychological counseling,
etc), discounts on company products, use of a company cars, etc.

Growth And Career

Growth and development are the integral part of every individual’s career. If an employee can not foresee his
development in his current organization, there are chances that he’ll leave the organization as soon as he gets

The important factors in employee growth that an employee looks for h

Work profile:The work profile on which the employee is working should be in sync with his capabilitie
should not be too low or too high.

Personal growth and dreams: Employees responsibilities in the organization should help him achieve his pers
Organizations can not keep aside the individual goals of employees and foster organizations goals. Employees’ pr
for themselves and later on comes the organization. If he’s not satisfied with his growth, he’ll not be able t
organization

Training and development: Employees should be trained and given chance to improve and enhance the
employers fear that if the employees are well rained, they’ll leave the organization for better jobs. Organization
the resources on which organization’s success depends. These trainings can be given to improve many skills like:

 Communications skills
  Technical skills
 In-house processes and procedures improvement related skills
 C or customer satisfaction related skills
 Special project related skills

Need for such trainings can be recognized from individual performance reviews, individual meetings, emplo
surveys and by being in constant touch with the employees.

Support

Lack of support from management can sometimes serve as a reason for employee retention.
Supervisor should support his subordinates in a way so that each one of them is a
success. Management should try to focus on its employees and support them not
only in their difficult times at work but also through the times of personal crisis.
Management can support employees by providing them recognition and
appreciation.

Employers can also provide valuable feedback to employees and make them feel
valued to the organization.

The feedback from supervisor helps the employee to feel more responsible, confident and
empowered. Top management can also support its employees in their personal crisis by
providing personal loans during emergencies, childcare services, employee assistance
programs, counseling services, et al.

Employers can also support their employees by creating an environment of trust and
inculcating the organizational values into employees. Thus employers can support their
employees in a number of ways as follows:

 By providing feedback

 By giving recognition and rewards

 By counseling them

 By providing emotional support

Importance of Relationship in Employee Retention Program

Sometimes the relationship with the management and the peers becomes the reason for an
employee to leave the organization. The management is sometimes not able to provide an
employee a supportive work culture and environment in terms of personal or professional
relationships. There are times when an employee starts feeling bitterness towards the
management or peers. This bitterness could be due to many reasons. This decreases
employee’s interest and he becomes de-motivated. It leads to less satisfaction and
eventually attrition.

A supportive work culture helps grow employee professionally and boosts employee
satisfaction. To enhance good professional relationships at work, the management should
keep the following points in mind.

Respect for the individual: Respect for the individual is the must in the organization.

Relationship with the immediate manager: A manger plays the role of a mentor and a
coach. He designs ands plans work for each employee. It is his duty to involve the employee
in the processes of the organization. So an organization should hire managers who can make
and maintain good relations with their subordinates.

Relationship with colleagues: Promote team work, not only among teams but in different
departments as well. This will induce competition as well as improve the relationships among
colleagues.

Recruit whole heartedly: An employee should be recruited if there is a proper place and
duties for him to perform. Otherwise he’ll feel useless and will be dissatisfied. Employees
should know what the organization expects from them and what their expectation from the
organization is. Deliver what is promised.

Promote an employee based culture: The employee should know that the organization is
there to support him at the time of need. Show them that the organization cares and he’ll
show the same for the organization. An employee based culture may include decision
making authority, availability of resources, open door policy, etc.

Individual development: Taking proper care of employees includes acknowledgement to

the employee’s dreams and personal goals. Create opportunities for their career growth by
providing mentorship programs, certifications, educational courses, etc.

Induce loyalty: Organizations should be loyal as well as they should promote loyalty in the
employees too. Try to make the current employees stay instead of recruiting new ones.

What Makes Employee Leave?

Employees do not leavean organization without any significant reason. There are certain
circumstances that lead to their leaving the organization. The most common reasons can
be:
 Job is not what the employee expected to be: Sometimes the job responsibilities
don’t comeout to be same as expected by the candidates. Unexpected job
responsibilities lead to job dissatisfaction.
 Job and person mismatch: A candidate may be fit to do a certain type of job which
matches his personality. If he is given a job
which mismatches his personality, then he won’t be able to perform it well and will try to
find out reasons to leave the job.

 No growth opportunities: No or less learning and growth opportunities in the

current job will make candidate’s job and career stagnant.

 Lack of appreciation: If the work is not appreciated by the supervisor, the

employee feels de-motivated and loses interest in job.
  Lack of trust and support in coworkers, seniors and management: Trust is
the most important factor that is required for an individual to stay in the job. Non-
supportive coworkers, seniors and management can make office environment
unfriendly and difficult to work in.
 Stress from overwork and work life imbalance: Job stress can lead to work life
imbalance which ultimately many times lead to employee leaving the organization.
 Compensation: Better compensation packages being offered by other companies
may attract employees towards themselves.

 New job offer: An attractive job offer which an employee thinks is good for him
with respect to job responsibility, compensation, growth and learning etc. can lead
an employee to leave the organization.

Employee Retention Strategies

The basic practices which should be kept in mind in the employee retention strategies are:

1. Hire the right people in the first place.

2. Empower the employees: Give the employees the authority to get things done.

3. Make employees realize that they are the most valuable asset of the organization.

4. Have faith in them, trust them and respect them.

5. Provide them information and knowledge.

6. Keep providing them feedback on their performance.

7. Recognize and appreciate their achievements.

8. Keep their morale high.

9. Create an environment where the employees want to work and have fun.

These practices can be categorized in 3 levels: Low, medium and high level.
              <Low>                               <Medium >                               <High>

Retention Myths

The process of retention is not as easy at it seems. There are so many tactics and strategies used in
retention of employees by the organizations. The basic purpose of these strategies should be to
increase employee satisfaction, boost employee morale hence achieve retention. But some times
these strategies are not used properly or even worse, wrong strategies are used. Because of which
these strategies fail to achieve the desired results.There are many myths related to the employee
retentionprocess. These myths exist because the strategies being used are either wrong or
are being used from a long time. These myths
prevent the employer from successfully implementing the retention strategies. Let us learn
about some of these myths.

1. Employees leave an organization for more pay: Money may be the motivating factor
for some but for many people it is not the most important factor. Money matters
more to the low-income-employees for whom it’s a survival issue. Money can make
an employee stay in an organization but not for long. The factors more important
than money are job satisfaction, job responsibilities, and individual’s skill
development. The employers should understand this and work out some other ways
to make employees feel satisfied. When employees leave, management tries to
 retain them by offering more money. But instead they should try to figure out the
main reason behind it. Issues that are mainly the cause of dissatisfaction are
organization’s policies and procedures, working conditions, relationship with the
supervisor and salary, etc. For such employees, achievement, growth, respect,
recognition, is the main concern.

2. Incentives can increase productivity: Incentives can surely increase productivity but
not for long term. Cash incentives, volume work targets and speed awards are old
management beliefs. They can generate work speedily and in volumes but can’t
boost employee commitment. Rather speed can hamper the quality of work
produced. What really glues employees to their work and organization is quality
work, meaningful responsibilities, recognition, respect, growth opportunities and
friendly supervisors.
3. Employees run away from responsibilities: It is a myth that employees run from
responsibilities. In-fact employees feel more responsible if they are given extra
responsibilities apart from their regular job. Employees look for variety, greater
control on the processes and authority to take decisions in their present job. They
want opportunities to learn and grow. Management can assign extra responsibilities
to their employees and appreciate them on the completion of these tasks. This will
induce a sense of pride in the employee and will improve the relationship between
the management and the employee.
4. Loyalty is a thing of the past: Employees can be loyal but what they need is an
employer for whom they can be loyal. There is no reason for the employee to hop
jobs if he’s satisfied with the employer.

5. Taking measures to increase employee satisfaction will be expensive for the

organizations: The things actually required to improve employee satisfaction like
respect, career growth and development, appreciation, etc. can’t be bought. They
are free of cost. An employer or management that reacts well to the employee’s
ideas and suggestions is enough for the employees to be retained.

Benefits Of Attrition

Attrition is not bad always if it happens in a controlled manner. Some attrition is always
desirable and necessary for organizational growth and development. The only concern is
how organizations differentiate “good attrition” from “bad attrition”. The term “healthy
attrition” or “good attrition” signifies the importance of less productive employees
voluntarily leaving the organization. This means if the ones who have left fall in the
category of low performers, the attrition in considered being healthy.
Attrition rates are considered to be beneficial in some ways:

 If all employees stay in the same organization for a very long time, most of them
will be at the top of their pay scale which will result in excessive manpower costs.

 When certain employees leave, whose continuation of service would have negatively
impacted productivity and profitability of the company, the company is benefited.
 New employees bring new ideas, approaches, abilities & attitudes which can keep
the organization from becoming stagnant.
 There are also some people in the organization who have a negative and
demoralizing influence on the work culture and team spirit. This, in the long-term, is
detrimental to organizational health.
  Desirable attrition also includes termination of employees with whom the
organization does not want to continue a relationship. It benefits the organization in
the following ways:
o It removes bottleneck in the progress of the company
o It creates space for the entry of new talents
o It assists in evolving high performance teams

 There are people who are not able to balance their performance as per
expectations, lack potential for future or need disciplinary action. Furthermore, as
the rewards are limited, business pressures do not allow the management to over-
reward the performers, but when undesirable employees leave the company, the
good employees can be given the share that they deserve.

Some companies believe attrition in any form is bad for an organization for it means that a
wrong choice was made at the beginning while recruiting. Even good attrition indicates loss
as recruitment is a time consuming and costly affair. The only positive point is that the
realization has initiated action that will lead to cutting loss.

Retension Success Mantras

Retention Success Mantras

Transparent Work Culture

In today’s fast paced business environments where employees are constantly striving to achieve
business goals under time restrictions; open minded and transparent work culture plays a vital role
in employee retention.

Companies invest very many hours and monies in training and educating employees.
These companies are severely affected when employees check out, especially in the
middle of some big company project or venture. Although employees most often prefer to
stay with the same company and use their time and experience for personal growth
and development, they leave mainly because of work related stress and dissatisfactions.

More and more companies have now realized the importance of a healthy work culture and
have a gamut of people management good practices for employees to have that ideal fresh
work-life. Closed doors work culture can serve as a deterrent to communication and trust
within employees which are potential causes for work-related apathy and frenzy.

A transparent work environment can serve as one of the primary triggers to facilitate
accountability, trust, communication, responsibility, pride and so on. It is believed that in a
transparent work culture employees rigorously communicate with their peers and exchange
ideas and thoughts before they are finally matured in to full-blown concepts. It induces
responsibility among employees and accountability towards other peers, which gradually
builds up trust and pride. More importantly, transparency in work environment discourages
work-politics which often hinders company goals as employees start to advance their
personal objectives at the expense of development of the company as a single entity.

Employees comprise the most vital assets of the company. In a work place where employees
are not able to use their full potential and not heard and valued, they are likely to leave
because of stress and frustration. In a transparent environment while employees get a sense
 of achievement and belongingness from a healthy work environment, the company is
benefited with a stronger, reliable work-force harboring bright new ideas for its growth.

Quality Of Work

The success of any organization depends on how it attracts, recruits, motivates, and
retains its workforce. Organizations need to be more flexible so that they develop their
talented workforce and gain their commitment. Thus, organizations are required to retain
employees by addressing their work life issues.

The elements that are relevant to an individual’s quality of work life include the task, the
physical work environment, social environment within the organization, administrative
system and relationship between life on and off the job.
The basic objectives of a QWL program are improved working conditions for the employee
and increase organizational effectiveness.

Providing quality work life involves taking care of the following aspects:

Occupational health care: The safe work environment provides the basis for the person to
enjoy working. The work should not pose a health hazard for the person. The employer and
employee, aware of their risks and rights, could achieve a lot in their mutually beneficial
dialogue.

Suitable working time: Organizations are offering flexible work options to their employees
wherein employees enjoy flexi-timings for dedicating their efforts at work.

Appropriate salary: The appropriate as well as attractive salary has always been an
important factor in retaining employees. Providing employees salary at par with the other
counterparts of above that what competitors are paying motivates them to stick with the
company for long.

QWL consists of opportunities for active involvement in group working arrangements or

problem solving that are of mutual benefit to employees or employers, based on labor
management cooperation. People also conceive of QWL as a set of methods, such as
autonomous work groups, job enrichment, and high-involvement aimed at boosting the
satisfaction and productivity of workers. It requires employee commitment to the
organization and an environment in which this commitment can flourish.

Providing quality at work not only reduces attrition but also helps in reduced absenteeism
and improved job satisfaction. Not only does QWL contribute to a company's ability to recruit
quality people, but also it enhances a company's competitiveness. Common beliefs support
the contention that QWL will positively nurture amore flexible, loyal, and motivated
workforce, which are essential in determining the company's competitiveness.

Supporting Employees

Organizations these days want to protect their biggest and most valuable asset and they
want to do this in a way that best suits their organizational culture. Retaining employees
is a difficult task. Providing support to the employees acts as a mantra for retraining
them. Employers can also support their employees by creating an environment of trust
and inculcating the organizational values into employees.
The management can support employees directly or indirectly. Directly, they provide support
in terms of personal crises, managing stress and personal development. Management can
support employees, indirectly, in a number of ways as follows:

 Manage employee turnover: Employee turnover affects the whole organization in

terms of productivity. Managing the turnover, hence, becomes an important task. A
proactive approach can be adopted to reduce attrition. Strategies should be framed
in advance and implemented when the times arrives. Turnover costs should also be
taken into consideration while framing these strategies.

 Become employer of choice: What makes a company an employer of choice? Is

the benefit it offers or the compensation packages it gives away to its employees?
Or is it measured in terms of how they value their employees or in terms of
customer satisfaction? Becoming an employer of choice involves following a road
map which tells where to go as a brand.

 Engage the new recruits: The newly hired employees are said to be least
engaged in the organization. Keeping them engaged is an important task. The fresh
talent should be utilized to maximum before they start feeling bored in the
organization.
 Optimize employee engagement: An organization’s productivity is measured not
in terms of employee satisfaction but by employee engagement. Employees are said
to be engaged when they show a positive attitude toward the organization and
express a commitment to remain with the organization. Employee satisfaction also
comes with high engagement levels. So, organizations should aim to maximize the
engagement among employees.
  Coaching and mentoring: Employees whose work performance suffers due to
poor interpersonal relationships or because of lack of interpersonal skills should be
provided proper coaching by their superiors. Planed coaching sessions help an
individual to work through issues, maximize his potential and return to peak
performance.

Feedback

Feedback acts as a channel of communication between the employee and his manager.
The amount of information employees receive about how well or how poorly they have
performed is what we call feedback. It is a dialog between a manager and an employee
which acts as a way of sharing information about the performance. It suggests where the
employee performance is effective and where performance has to improve.

Managers can provide either positive feedback or negative feedback to employees. This
feedback helps the employee
assess his performance and identify the improvement areas.

Positive feedback communicates managerial satisfaction. Positive recognition for good

performance boosts up morale of employees and results in performance improvement to a
higher productivity level. It is believed that positive feedback is the only type of feedback
that generates performance above the minimum acceptable level.

Negative feedback obviously communicates manager’s dissatisfaction. However, negative

feedback sometimes make employee to put more efforts to improve his performance. But
such times are very rare. Moreover this improvement is short term.

Some managers do not provide any kind of feedback to their employees. Due to no
feedback, employees may assume that they are performing productively or they may feel
that the manager is satisfied with their performance. Studies reveal the performance tends
be same or even decreases if no feedback is provided.

Thus, feedback is necessary because:

 It builds trust and enhances communication between manager and employee.

 It gives managers and employees a way to identify and discuss skills and strengths.
 Positive feedback leads to employee retention and motivation.
 It helps in identifying performance areas that need improvement and specific ways
to improve them.
 It acts as an opportunity to enhance performance by identifying resources for skill
development.
 It is an opportunity for managers and employees to assess and identify career and
advancement opportunities.
 It helps employees to understand the effectiveness of their performance and
contributes to their overall knowledge about the work
 Managers have tendency to ignore good performances of their employees. Providing no
feedback may demotivate employees and may lead to employee absenteeism. Input from
manager’s side is necessary as it help employees to improve their performance and increase
productivity.

Communication Between Employee and

Employer

Communication is a process in which a message is conveyed to the receiver by the

sender. The message may be or may not be in a common format or language that both the
sender and receiver understand. So there is a need to encode and decode the message in
the process. Encoding and decoding also helps in the security of the message. The
process of communication is incomplete without the feedback.

Communication is the solution to almost everything in this world. Same applies to

employee retention also.
Straight-from-the-shoulder communication is what the employees need from their
employers. Employees look for organizations where communication and process are
transparent. Nothing is hidden and shared with the employees.
 There are 3 categories of employees:

 A: Who will leave their current employer in 3 years of their employment

 B: Who have a probability of leaving their current employer in next 3 years

 C: Who will stay with their current employer in the next 3 years

Category A: These are the employees who lack communication with their employers.

Category C: These are the employees who have proper, well structured communication with
their employers.

Communication is also the way to win the employees trust in the organization. Employees
trust the employers who are friendly and open to them. This trust leads to employee loyalty
and finally retention. Employers also feel that the immediate supervisors are the most
authenticated and trusted source of information for them. So the organizations should hire
managers who are active communicators.

Communication mediums

 Open door policy: Organizations should support open door policies so that the
employees feel comfortable and are able to express their doubts and feeling to their
employers.

 Frequent meetings and Social gatherings

 Emails, Newsletters, Intranet and many more

So there should be effective communication across the organization and this communication
should be two-way. Communication alone can lead to unimaginable heights of employee
retention.

Managing Employee Retention

The task of managing employees can be understood as a three stage process:

1. Identify the cost of employee turnover

2. Understand why employee leave
3. Implement retention strategies

Identify the cost of employee turnover:

The organizations should start with identifying the employee turnover rates within a particular time
period and benchmark it with the competitor organizations. This will help in assessing the whether
the employee retention rates
are healthy in the company. Secondly, the cost of employee turnover can be calculated.
According to a survey, on an average, attrition costs companies 18 months’ salary for each
manager or professional who leaves, and 6 months’ pay for each hourly employee who
leaves. This amounts to major organizational and financial stress, considering that one out
of every three employees plans to leave his or her job in the next two years.
Understand why employees leave:
Why employees leave often puzzles top management. Exit interviews are an ideal way of
recording and analyzing the factors that have led employees to leave the organization. They
allow an organization to understand the reasons for leaving and underlying issues. However
employees never provide appropriate response to the asked questions. So an impartial
person should be appointed with whom the employees feel comfortable in expressing their
opinions.

Implement retention strategy:

Once the causes of attrition are found, a strategy is to be implemented so as to reduce
employee turnover. The most effective strategy is to adopt a holistic approach to dealing
with attrition. An effective retention strategy will seek to ensure:

 Attraction and recruitment strategies enable selection of the ‘right’ candidate for
each role/organization

 New employees’ initial experiences of the organization are positive

 Appropriate development opportunities are available to employees, and that they
are kept aware of their likely career path with the organization
 The organization’s reward strategy reflects the employee drivers

 The leaving process is managed effectively

How To Increase Employee Retention

Companies have now realized the importance of retaining their quality workforce.
Retaining quality performers contributes to productivity of the organization and
increases morale among employees.

Four basic factors that play an important role in increasing employee retention
include salary and remuneration, providing recognition, benefits and opportunities
for individual growth. But are they really positively contributing to the retention
rates of a company? Basic salary, these days, hardly reduces turnover. Today,
employees look beyond the money factor.
employee retention can be increase by inculcating the following practices:

1. Open Communication: A culture of open communication enforces loyalty among

employees. Open communication tends to keep employees informed on key issues.
Most importantly, they need to know that their opinions matter and that management
is 100% interested in their input.

2. Employee Reward Program: A positive recognition for work boosts the motivational
levels of employees. Recognition can be made explicit by providing awards like best
employee of the month or punctuality award. Project based recognition also has great
significance. The award can be in terms of gifts or money.
3. Career Development Program: Every individual is worried about his/her career. He
is always keen to know his career path in the company. Organizations can offer
various technical certification courses which will help employee in enhancing his
knowledge.
4. Performance Based Bonus: A provision of performance linked bonus can be made
wherein an employee is able to relate his performance with the company profits and
hence will work hard. This bonus should strictly be productivity based.
5. Recreation facilities: Recreational facilities help in keeping employees away from
stress factors. Various recreational programs should be arranged. They may include
taking employees to trips annually or bi-annually, celebrating anniversaries, sports
activities, et al.
6. Gifts at Some Occasions: Giving out some gifts at the time of one or two festivals
to the employees making them feel good and understand that the management is
concerned about them.
 Employers And Their Key Drivers To Attract
And Retain Talent

The Following table describes the Key Drivers to Attract And Retain Talent.

Employers Key Drives To Attract And Retain Talent

o Early responsibilities in career
o Flexible and transparent organizational culture
o Global opportunities through a variety of
Procter and Gamble India
exposure and diverse experiences

o Performance Recognition
o Strong global brand
o Value-based environment
American Express (India)
o Pioneer in many people practices
o Learning and growth opportunities
o Competitive rewards
o Opportunity to grow, learn and implement
NTPC
o Strong social security and employee welfare
performance- oriented culture
o Strong values of trust, caring fairness, and
respect within the organization
o Freedom to operate at work
o Early responsibility in career
Johnson & Johnson o Training and learning opportunities
o Visible, transparent and accessible leaders
o Competitive rewards

o Innovative HR programs and practices

Glaxo Smith Kline o Performance-driven Rewards
Consumer Healthcare o Its belief in “Growing our own timber”
o Comprehensive development and learning
programs
o Flat organization, where performance could
lead to very quick progression
o Challenging work context
o Competitive rewards
 o Exhaustive induction and orientation program
o Organization philosophy and culture
o Job stability
Tata Steel
o Freedom to work and innovate
o Company brand
o Open , transparent, and caring organization
o Management according to the managing with
respect to guiding principles
Colgate Palmolive India
o Training ad development programs
o Structured career planning process

o Global career opportunities

o Company’s brand as an employer
o Early opportunities for growth
o High degree of autonomy
Wipro
o Value compatibility

o Innovative people program

o Company brand image
o Work ethics
o Learning and growth opportunities
Indian Oil Corporation
o Challenging work assignments

o Growing organization
o The group brand equity
o Strong corporate governance and citizenship
o Commitment to learning and development
TCS o Best in people practices
o Challenging assignments

o Opportunity to work with fortune 500 clients

Retention Bonus

Higher attrition rates within a particular industry have forced companies to use some
innovative strategies to retain employees. Retention Bonus is one of the important tools
that are being used to retain employees. Retention bonus is an incentive paid to an
employee to retain them through a critical business cycle. Retention bonuses are
becoming more common in the corporate world because companies are going through
more transitions like mergers and acquisitions. They need to give key people an attractive
incentive to stay on through these transitions to ensure productivity.
Retention bonuses have proven to be a useful tool in persuading employees to stay.

A retention bonus plan is not a panacea. According to a survey, non-management

employees generally receive about 10 percent of their annual salaries in bonuses, while
management and top-level supervisors earn an additional 50 percent of their annual
salaries. While bonuses based on salary percentages are the generally used, some
companies choose to pay a flat figure. In some companies, bonuses range from 25 percent
to 50 percent of annual salary, depending on position, tenure and other factors. Employees
are chosen for retention bonuses based on their contributions to management and the
generation of revenue. Retention bonuses are generally vary from position to position and
are paid in one lump sum at the time of termination. However, some companies pay in
installments as on when the business cycle completes. A retention period can run
somewhere between six months to three years. It can also run for a particular project. A
project has its own life span. As long as the project gets completed, the employees who
have worked hard on it are entitled to receive the retention bonus. For example, the
implementation of a system may take 18 months, so a retention bonus will be offered after
20 months.

Although retention bonuses are becoming more common everywhere, some industries are
more likely than others to offer them. Retail/wholesale companies are the most appropriate
to implement stay-pay bonuses, followed by financial service providers and manufacturing
firms. Companies of all sizes use retention bonus plans to keep knowledge employees
retained in the company. To retain its key senior employees post merger with EDS
Corporation, Mphasis is providing cash component based retention bonus plan for its
employees. This is mainly to retain good employees and provide them a cash incentive to
keep them motivated.

Hire Right Talent

employee retention starts with recruitment. Early departures arise from the wrong recruitment
process. Here are a few ways to ensure how to hire the right
talent for a particular job.
 Hire appropriate candidates. Hire candidates who are actually suitable for the
job. For this the employer should understand the job requirements clearly. Don’t
hire under qualified or clearly overqualified candidates.
 Provide realistic job preview at the time of hiring: Mostly employees leave an
organization because
they are given the real picture of their job responsibilities at the time of joining. Attrition
rate can be reduced if a right person is hired for a right job.

Realistic preview of the job responsibilities can be given to the employment seekers by
various methods like discussions, trial periods, internships etc.

 Clearly discuss what is expected from the employee: Before joining the
organization, tell the candidate what is expected from him. Setting wrong expectations or
hiding expectations will result in early leaving of employees.

 Discuss what the expectations of the employees are: Ask employees what they
expect from the organization. Be realistic. If their requirements can be fulfilled only then
promise them. Or tell them before hand that their requirements can not be fulfilled. Don’t
show them an unrealistic picture.

 Culture fit: Try to judge individual’s capability to adapt to the organization’s culture. A
 drastic change in the culture may give a culture shock to the candidate.

 Referrals: According to the research, referred candidates stay longer with the
organization. There is a fear of hampering the image and reputation of the person who
referred the candidate.

BPO Employee Retention

Attrition is the biggest problem faced by BPOs these days. Attrition rate in BPOs is more than the
attrition rate in any other sector. It is very important to control this attrition rate. Many retention
schemes are applied in BPOs for retention.

A single tool like training alone is not sufficient for employee retention. The best results for
employee retention can be achieved by applying different tools strategically. Let us now learn about
various strategies which can boost successful employee retention in BPOs.
1. First know the cost. This is the most basic and initial part of the retention process. A
good retention plan needs all the facts. The turnover cost includes cost of selection
process, hiring, induction, training, lost productivity, etc.
2. Hire from known sources like employee referrals through trustworthy employees.
3. Hire the right people. Retention starts with recruitment itself. Identify the
characteristics of the people you want to hire who fit in organization’s culture. To
retain employees, the people who are productive and are likely to stay for a longer
time should be hired.
4. Focus on employee orientation. It is the first impression that the employee takes
home with him. A proper welcome form the management will encourage the
employee to stay with the organization.
5. Individual development. Develop career plans for employees. Initiate mentorship
and higher education programs to keep the learning and development moving.
6. Training for managers. An important factor that keeps the employee in the
organization is the manager. Employees need a manager who manages them well. A
manager should be a good listener and motivator. Proper training should be given to
the managers.
7. Find the reason why employees are leaving. Conduct exit interviews with the
employees after 3-4 months of leaving the job. This is because most of the
employees would not like to reveal the true reason of quitting the job as long as
they are in the organization and are associated with the job. The exit interviews can
be conducted online. Then the employees can talk straight-from-the-shoulder.

8. Employee recognition. Star of the month, top performer, picture on bulletin boards,
appreciation cards and certificates, etc, increase employee moral and confidence.
This is a great way to retain employees of a call center.

Manager Role in Retention

When asked about why employees leave, low salary comes out to be a common excuse. However,
research has shown that people join companies, but leave because of what their managers’ do or
don’t do. It is seen that managers who respect and value employees’ competency, pay attention to
their aspirations, assure challenging work, value the quality of work life and provided chances for
learning have loyal and engaged employees. Therefore, managers and team leaders play an active
and vital role in employee retention.

Managers and team leaders can reduce the attrition levels considerably by creating a
motivating team culture and improving the relationships with team members. This can be
done in a following way:

 Creating a Motivating Environment: Team leaders who create motivating

environments are likely to keep their team members together for a longer period of
time. Motivation does not necessarily have to come through fun events such as
parties, celebrations, team outings etc. They can also come through serious events
e.g. arranging a talk by the VP of Quality on career opportunities in the field of
quality. Employees who look forward to these events and are likely to remain more
engaged.

 Standing up for the Team: Team leaders are closest to their team members.
While they need to ensure smooth functioning of their teams by implementing
management decisions, they also need to educate their managers about the
realities on the ground. When agents see the team leader standing up for them,
they will have one more reason to stay in the team.
 Providing coaching: Everyone wants to be successful in his or her current job.
However, not everyone knows how. Therefore, one of the key responsibilities will be
providing coaching that is intended to improve the performance of employees.
Managers often tend to escape this role by just coaching their employees. However,
coaching is followed by monitoring performance and providing feedback on the
same.
 Delegation: Many team leaders and managers feel that they are the only people
who can do a particular task or job. Therefore, they do not delegate their jobs as
much as they should. Delegation is a great way to develop competencies.
 Extra Responsibility: Giving extra responsibility to employees is another way to
get them engaged with the company. However, just giving the extra responsibility
does not help. The manager must spend good time teaching the employees of how
to manage responsibilities given to them so that they don’t feel over burdened.

 Focus on future career: Employees are always concerned about their future
career. A manager should focus on showing employees his career ladder. If an
employee sees that his current job offers a path towards their future career
aspirations, then they are likely to stay longer in the company. Therefore, managers
should play the role of career counselors as well.