Blog: A Perspective on Traditional Retention Strategies

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A Perspective on Traditional Retention Strategies

A Perspective on Traditional Retention Strategies

 Decide is etymologically rooted in a French word 'caedere' which means to cut or end. When employees decide to move on from one organization to its competitor, they make two decisions, the first to leave their current organization, and another, is to join the competitor. There is a lot of ambiguity in the second part of the decision as they have little experience about the role, the manager, the culture, the work-life offered and several other factors that would influence and shape the experience of the next career stint they are choosing to adopt. It shall be likely that due to the lack of adequate information and experience, employees are likely to look for more quantifiable and objective metrics such as compensation and offered benefits to make this half of the decision. However, the decision they make to end their current stint in an organization is often chronologically the first, and certainly grounded in several subjective factors that have influenced their experience and quality of life, only a part of which may, or may not, have been driven by the financial affordability the current earnings have given them. Often, some of the factors which influence career choices of employees could be a mix of psychological, emotional, sociological impulses which employees themselves find it hard to quantify or attach adequate reason to. It is important for us to acknowledge the complexities in decision making of human beings, and the spectrum of the factors that influence them, by not oversimplifying the conclusion into a one liner in a documentation of the exit interview, which often alludes to insufficient compensation.

It is important for us to understand that we operate in a closely networked free market space, with organizations from different industries with different levels of affordability targeting the same talent pool. It shall only be a grand overstatement if we believe that paying a few thousand dollars higher would have out-beaten the market and helped retain the employee with us. The conventional logic suggests that retention interventions help in improving the sense of self-worth an individual feels in the organization, hence, reducing the probability that he would make the first decision in the chronology – which is to leave the current firm. However, extensive research and experience suggests that monetary interventions in aim of retention could cause an over inflated self-worth of an individual, hence, increasing the probability that they would look out for better opportunities in the market. Also, from an external perspective, we may have marginally shrinked the set of opportunities that are willing to pay this individual 20-30% higher than his current role, however, this is a very broad generalization which is influenced by several subjective factors including the potential worth an organization sees in an individual.

In this grand scheme of complexities, it is important to ensure that we do not oversimplify our approach to attrition, and look at compensation as a key anchor to plug the leaking buckets. It is extremely important to adopt a very comprehensive approach towards understanding and analyzing the factors that influence the decision making of employees and derive analytical models to prevent and address them.

It is important to quantify the anchors that contribute in building an overall value proposition to the employee. This should comprise of a broad spectrum of anchors from a total rewards perspective, which include compensation, benefits, career growth and work life integrated with the larger variables from different talent touch points. This would be a critical input to develop more elaborate mathematical constructs to quantify the decision making patterns, and understand how similar employees make decisions under similar circumstances. This is the first step towards designing customized retention strategies towards specific employees to increase the effectiveness and measure the outcomes. It is also important to couple this with an analysis on the financial worth an employee is generating for the organization, and a detailed analysis on the cost of replacement and training, to decide if we should retain or let go.

A new generation of empowered and liberated workforce has entered our workplaces, baby steps will fail to pace up with their demands. A new revolution in our understanding of their behavior patterns and mass customization of our approaches has to be the way forward. A broad brush will only make us more wrong than correct. Wake up!

Topics: Employee Relations

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