Retention strategies-importance and impact

People do not leave an organisation, they leave their bosses. This is one of the many factors floating around for employees to make the switch. Renuka Vembu finds out more about retention sops provided by companies to woo employees

Salvaging the talent pool is a tough task for companies and HR departments alike. However, this is an inconvenient truth in the stark reality of attrition versus the desperate efforts of retention. Any organisation suffers when the most efficient and valuable employee decides to part ways—be it the top notch or lower down the ranks, they create a vacuum—either for the company in large or in their immediate frame of surroundings.

Employees are said to be a company's greatest asset. Attracting, safeguarding, nurturing and preserving them is a mission in itself, which takes total commitment and endorsement. While the middle management has a career chart well in place to take on the next position, the top hierarchy has a contingency plan laid firm. It is the group which is lower down the ranks for whom there is no succession planning strategy in place, and who comprise the volatile lot. They are easy targets of poaching in the competitive talent market

Reasons to resign

"The major consequence for a company is loss of groomed talent and the spectre of replacement which is a huge task, as a human asset walks away with years of training, experience and the unique company culture" - Ajit Kamath Chairman and MD Arch Pharmalabs

In a globalised marketplace and 24/7 job function, it is imperative to stress on connecting on a personal level with employees. While on the job, lack of communication, lack of timely recognition and compensation, conflict with team members or boss, insufficient perks, promotion and pay package, inconducive environment, incompatibility with the culture, work ethics, inflexibility in the work timing, insensitivity with individual health problems, etc, may act as some of the reasons which force the best players to search for better options.

The main issue is to identify why employees leave—is it with respect to a particular team or department, a specific job function which is high pressured, a reporting manager or are there generic issues which need to be addressed.

Retention strategies

While average performers can be replaced, the Herculean task is finding a replacement for exceptional performers who leave an organisation. Companies are increasingly engaging in retention strategies which are gaining prominence, and are as important as recruitment and training. Retention plans need to be phased out bearing in mind not only the job requisites of an individual, but the surrounding environment as also gaining an insight into an individual's personal life. Ajit Kamath, Chairman and Managing Director, Arch Pharmalabs, mentions, "Perks, promotions, increments, etc, have their own importance in ensuring employee loyalty. However, these are a given wherein employees try to always look at improving their socio-economic status. Our observation, in the manufacturing world, has been a high degree of aversion to lateral movements in the same organisation. Job rotation has not been accepted by people at middle level and sometimes serves as a demotivator and a signal for an employee to consider an exit. Training programs are however appreciated but again the choice of the program is very critical since a majority of the times such programs tend to deviate from the stated theme."

In an age when needs far exceed the expectations met, and when monetary benefits is no longer the only cause of concern, the intangibles and add-ons that come with the surrounding environment act as a motivator on the job. Alok Saxena, Director (International), Elder Pharmaceuticals, points out the areas where companies have to tread with caution:

• Exhaustive recruitment and selection process
• Flexible compensation package
• Creating bonding among the employees
• Effective communication strategy. Regular address by the top or senior management to the employees on the organisational achievements, changes, future policies, etc.
• Organising periodic get-togethers of senior management employees to facilitate the team spirit and cohesiveness among them
• Some companies are providing help to the senior managers in their domestic work such as payment of bills, routine shopping for provisions, etc., whereby the senior manager need not worry for such work
• Need-based training and development programmes. Professional courses sponsorship
• Provide challenges in work
• Provide recreational facilities within the office premises to reduce the stress
• Regular medical check ups for the senior management
• Holiday home facilities to senior managers

Likewise, for employees to stay motivated and dedicated, and perform to the best of their ability, engaging in fair and transparent dealings, an effective communication channel, job rotation, ensuring a challenging role, an open-door policy, a defined career path, proper training and skills upgradation, addressing grievances, inclusive decision making, employee empowerment, effective performance management and appraisal, are mandatory. But, these are a given under any circumstance and stand as the basic requisites. It reflects the culture of the company, its brand identity and the quality of its workforce. They have to move out from just being a publicity mechanism or a policy on paper to more diligent implementation for the overall betterment of the organisation and its workforce.

What employees need and demand, and companies are increasingly trying to adopt are innovative ways to not only make employee life easier but also to enhance it. Since there are increasing health concerns even from a very young age, medical benefits are of utmost importance. Similarly, in an age where commuting eats up a considerable amount of a person's time, any arrangement to reduce the travelling woes act as a major attraction. Provision of concierge services reduces the tension of employee to a great extent as additional responsibilities are taken care of by the company within its premises. Employee Stock Ownership Plans (ESOPs) help build up an individual's financial bank. Educational tie-ups help employees upgrade their skill-sets and thereby give them a better chance in the outside job market and improve their career scope. Flexitime policies and telecommuting privileges are also some of the upcoming ideas that are being tried and tested by companies. Also, in this stress-ridden age and lack of work-life equilibrium, companies engage their employees in career and personal counselling sessions by inviting professionals on a periodic basis. It is often the small things that make a large difference. More than what is furnished to employees, it is the attitude of the organisation and management, and the assurance that it values and cares for the workforce which makes a huge difference to the employee mindset.

An analysis

"Retention efforts need to be modified periodically according to need and time, and there needs to be justification for any exceptions made, so that competent employees stay back and incompetence does not breed within" - Alok Saxena Director (International) Elder Pharmaceuticals

Retention strategies have to be carefully executed keeping in mind the people involved because it revolves around them. Feedbacks from employees have to be worked upon, and their inputs included in making it a success effort. The huge gap in the demand-supply for specialised skill-sets is still widely prevalent, availability of raw talent far exceeds than that of polished skill-sets, educational system lags behind in experiential learning and providing practical know-how. All these hindrances further act as roadblock, affecting the chances of companies to recruit and retain the best available and polished talent pool. Kamath opines, "In spite of the much touted national talent bank and pool, specialised jobs still have a big demand-supply gap. Getting the right people is still a major concern given that more or less we do see numbers but not the desired quality in those numbers. This has led to performing candidates getting wooed by the competition or new entrants at terms which are not marginally but vastly better than they enjoy. Sometimes we have seen increments exceed 50 percent of their current compensation structure and sweetened further by more perks."

As Saxena points out, retention efforts need to modified periodically according to need and time, there needs to be justification for any exceptions made, the company funds need to be directed towards meaningful programs so that competent employees stay back and incompetence does not breed within, and there has to be a clear understanding of the objectives with complete top management endorsement.

The consequences

The consequences of attrition are manifold—loss of business, sulking employee morale and team spirit, impact on productivity, improved and renewed efforts and resources of bringing in a new person on board, etc. Kamath states, "The major consequence for a company is loss of groomed talent and the spectre of replacement which is a huge task. A human asset walks away with years of training, experience and the unique company culture which can be replicated elsewhere besides business issues related to competition. An exit or a series of exits definitely leads to loss of morale in the work environment. More often than not, herd mentality prevails and exits are followed by a deluge of exits leading to confusion in the company's hierarchy. Moreover, human assets walk away with a lot of ideas, culture and definitely they do have a major impact on the business since the competition can skip the learning curve and get into an optimised position immediately."

renuka.vembu@expressindia.com