In the present scenario, world is turning into a global village and the whole globe is reachable from any destination. In this small world even companies are reachable to the people and vice versa. And so their jobs are also easily accessible for everyone. In this situation, the biggest challenge for a company is to retain its workforce intact especially the Knowledge Banks.
All the companies are planning to increase their turnover every moment of time. While in all this workout of increasing the turnover they forget about their loss incurred by the resignation of employees and the expenses of hiring new employees (Hiring Cost, Training Cost, Productivity Loss etc.). This hiring of a new employee normally costs around 35% or more of the average employee salary. For example- let us consider average salary of an employee per year as Rs.20, 000, and then the cost of hiring a new employee and other expenses come around Rs.7, 000. If you have 2 employees resigning per month the cost comes to Rs.14, 000 and taking the same for 12 months comes to around Rs.168, 000, which is a direct loss from the turnover of the company. And after all this there is always a risk of getting a right employee for the right position with a right attitude....
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Below are few of the tools for Employee Retention:-
1. Employee Reward Program- You can make a provision of Monthly or Quarterly Award (depending upon the budget) for the best employee, Awarding 2 or 3 best workers each month. The award can be in terms of gifts or money.
If it is money then it should be divided into two parts, first part to be given with the next month salary and the remaining after 6 months. In this way he/she can be retained for 6 more months. These rewards shall be considered at the time of appraisal.
2. Career Development Program- Every individual is worried about his/her career. You can provide them conditional assistance for certain courses which are beneficial from your business point of view. Conditional assistance means the company will bear the expenses only if he/she gets an aggregate of certain percentage of marks. And entrance to that course should be on the basis of a Test and the number of seats to be limited. For getting admitted to such program, You can propose them to sign a bond with the company, like they cannot leave the company for 2 years or something after the successful completion of the course.
3. Performance based Bonus- The employee always comes to know about the profit of the company which is of course based on the strategic planning of the top management and the productivity of the employee. To get more work out of the employee, You can make a provision of Bonus. By this employee will be able to relate himself with the company’s profit and hence will work hard. This bonus should be productivity based. You can make sure that this bonus is not adding extra-pressure on the budget of Your Company and you can arrange this by cutting a part of the salary hikes and presenting it to the employees in the form of bonus.
4. Employee Referral Plan- You can introduce Employee Referral Plan. This will reduce your cost (charges of external consultants and searching agencies) of hiring a new employee and up to an extent you can rely on this new resource. On every successful referral, employee can be given a referral bonus after 6 or 9 months of continuous working of the new employee as well as the existing employee. By this you can get a new employee at a reduced cost as well as are retaining the existing one for a longer period of time.
5. Loyalty Bonus- You can introduce a Loyalty Bonus Program in which you can reward your employee after a successful completion of a specified period of time. This can be in the form of Money or Position. This will encourage the fellow employees as well whether they are interested in money or position, they will feel fascinated.
Source:
http://www.contentwriter.in/articles/hr/employee-retention-tools.htm
All the companies are planning to increase their turnover every moment of time. While in all this workout of increasing the turnover they forget about their loss incurred by the resignation of employees and the expenses of hiring new employees (Hiring Cost, Training Cost, Productivity Loss etc.). This hiring of a new employee normally costs around 35% or more of the average employee salary. For example- let us consider average salary of an employee per year as Rs.20, 000, and then the cost of hiring a new employee and other expenses come around Rs.7, 000. If you have 2 employees resigning per month the cost comes to Rs.14, 000 and taking the same for 12 months comes to around Rs.168, 000, which is a direct loss from the turnover of the company. And after all this there is always a risk of getting a right employee for the right position with a right attitude....
......................
Below are few of the tools for Employee Retention:-
1. Employee Reward Program- You can make a provision of Monthly or Quarterly Award (depending upon the budget) for the best employee, Awarding 2 or 3 best workers each month. The award can be in terms of gifts or money.
If it is money then it should be divided into two parts, first part to be given with the next month salary and the remaining after 6 months. In this way he/she can be retained for 6 more months. These rewards shall be considered at the time of appraisal.
2. Career Development Program- Every individual is worried about his/her career. You can provide them conditional assistance for certain courses which are beneficial from your business point of view. Conditional assistance means the company will bear the expenses only if he/she gets an aggregate of certain percentage of marks. And entrance to that course should be on the basis of a Test and the number of seats to be limited. For getting admitted to such program, You can propose them to sign a bond with the company, like they cannot leave the company for 2 years or something after the successful completion of the course.
3. Performance based Bonus- The employee always comes to know about the profit of the company which is of course based on the strategic planning of the top management and the productivity of the employee. To get more work out of the employee, You can make a provision of Bonus. By this employee will be able to relate himself with the company’s profit and hence will work hard. This bonus should be productivity based. You can make sure that this bonus is not adding extra-pressure on the budget of Your Company and you can arrange this by cutting a part of the salary hikes and presenting it to the employees in the form of bonus.
4. Employee Referral Plan- You can introduce Employee Referral Plan. This will reduce your cost (charges of external consultants and searching agencies) of hiring a new employee and up to an extent you can rely on this new resource. On every successful referral, employee can be given a referral bonus after 6 or 9 months of continuous working of the new employee as well as the existing employee. By this you can get a new employee at a reduced cost as well as are retaining the existing one for a longer period of time.
5. Loyalty Bonus- You can introduce a Loyalty Bonus Program in which you can reward your employee after a successful completion of a specified period of time. This can be in the form of Money or Position. This will encourage the fellow employees as well whether they are interested in money or position, they will feel fascinated.
Source:
http://www.contentwriter.in/articles/hr/employee-retention-tools.htm
