Introduction
Employee retention is a strategy used by the organizations to retain talented and highly qualified employees in a company. It is an ability of the firm to prevent workers from leaving the company. Employee retention helps to increase productivity, save costs and resources, increase revenue and improve organization's prestige and goodwill.
Advantages Of Employee Retention
The main advantages of employee retention can be pointed out as follows:
1. Minimize Errors And Mistakes
Because of highly skilled and experienced employees it helps to minimize errors and mistakes that increases the quality of work.
2. Increased Productivity
Another advantage of employee retention is that it improves the productivity of the firm. Because of experienced employees working efficiency will be increased that leads to increased in the productivity of the company. Increased productivity leads to decrease in the cost of production that optimizes the revenue of the company.
3. Reduce Hiring Costs
Companies can save hiring and training costs by retaining existing employees. Therefore, it is cost saving strategy for the organization.
4. Increase Employee Morale
Employee retention helps to increase employee morale because it provides the workers to grow and gain more experience in the company. It builds trust between management and subordinates.
5. Better Customer Relation
Experienced employees can provide better service to the customers that helps to improve customer relation. Better customer relation helps to increase improve the image and goodwill of the company.
6. Stability Of The Organization
Employee retention is very important for organizational. Retaining experienced employees provides competitive advantage to the company. Therefore, it is beneficial for the company to sustain in the competitive environment.
Disadvantages Of Employee Retention
Some of the major drawbacks or disadvantages of employee retention can be highlighted as follows:
1. Possibility Of Groupism
One of the major drawbacks of employee retention is that employees may overestimate their worth and may create different groups between workers. So, it may hamper the workflow that may lead to decrease the quality of work.
2. Resistance To Change
Long-term workers may be resistance to new technology and new processes. It will become harder for them to adopt new and optimized technology. Therefore, it becomes difficult for the company to implement necessary changes.
3. Possibility Of Retaining Less Qualified Workers
Company may retain less capable employees if their performance is not properly monitored. It may negatively impact the productivity and image of the company.
4. Financial Burden
Long-term employees may demand higher salaries and other financial benefits that may increase the financial burden of the organization.
5. Barrier To Fresh Talent
Employee retention may create a barrier for fresh talents and capable candidates to join the organization. So, company misses out skilled manpower.
Pros And Cons Of Employee Retention In Brief
Pros:
- It saves hiring costs and resources
- It improves the productivity
- It increases employees loyalty, morale and satisfaction
- It develops competencies
- It increases customer satisfaction
- It improves the quality of work
- It enhances the company culture
Cons:
- It increases the chance of groupism
- It may be difficult to implement changes
- It may hinder innovation
- It limits the opportunity for new talents
- It may decrease the productivity of the firm
