SAN ISIDRO COLLEGE

City of Malaybalay
Tel No. 088-813-5541
Website: sic.edu.ph
Webmail: [email protected]

HRM 102 Recruitment and Selection Mr. Jiemarie D. Paderes

(Course Code) (Course Tittle) (Name of Instructor)

I. Learning Module 7 Employee Retention

(Topic)

II. Introduction
Greetings! Good morning, everyone! Praised be Jesus and Mary! Welcome to module. You
will find here our general instructional guidelines, then the components of our module. You
will be guided one step at a time through the specific instructions of the learning tasks given
below, which intend you to understand the introduction to human resource management. Let
joy and peace abound in your mind and heart as you genuinely and responsibly respond to the
learning processes that this module offers

III. Intended Learning Outcomes (ILOs)

1. Discuss the importance of Employee Retention
IV. Stimulating Recall
1. What is the importance of Employee Retention?

V. Presentation of the topic/learning material

Employee Retention
1. Employee Retention
2. Why does employee retention matter?
3. Benefits of Employee Retention
4. Employee turnover
5. Employee Retention Model
6. How to Improve Employee Retention
 EMPLOYEE RETENTION

WHAT IS EMPLOYEE RETENTION?

Organizations need to keep their best employees around to thrive. This is the goal of
employee retention. Employee retention refers to the strategies an organization
develops to mitigate employee turnover risks and the processes it puts in place to retain
its critical talent. Employee retention is a leading challenge for organizations and HR
departments today.
Individuals leave their jobs for many different reasons. Some are voluntary, such as
taking another job, while others are involuntary, such as getting laid off. Employee
retention strategies primarily focus on voluntary turnover that is detrimental to the
organization, as opposed to the loss of a poor performer. It also focuses on turnover
that is avoidable, such as an employee leaving their job because they’re moving out-of-
state.
Why Does Employee Retention Matter?
Employee retention has become a critical aspect of modern human capital
management programs. The numbers speak for themselves: It costs U.S. businesses
more than $1 trillion a year to replace employees who voluntarily decide to leave their
jobs, according to Gallup. High turnover, some of which could be avoided with prior
management intervention, also comes at the expense of revenue, productivity,
employee experience and knowledge retention.
9 BENEFITS OF EMPLOYEE RETENTION
As businesses compete for top talent, employee retention is crucial. While some experts
suggest that a 90% retention rate is a good goal, the reality is, it varies across different
companies and industries. However, the ability to retain employees is universally
beneficial for many reasons. Following are nine of the top benefits:
1. Cost reduction. U.S. employers spend hundreds of millions of dollars every year
recruiting and training new workers. Those costs are sunk if an employee leaves
prematurely. Productivity, team cohesiveness and morale also take a hit — which
also has a financial impact. Total replacement costs for each employee can
range from 90% of worker’s salary for an entry-level employee to 200% or more
for tenured professionals and leaders.
2. Recruitment and training efficiency. By focusing on employee retention,
companies reduce recruiting costs and enjoy greater returns on employee
training. Recruiting costs include fees paid to recruiters or to advertise the
position, interview-related travel and possible signing bonuses. Next comes
training, which can also be costly. If the employee leaves prematurely after being
hired, that money is wasted.
3. Increased productivity. Employee turnover sets back productivity because it
takes time for a new worker to get up to speed and produce at a comparable
level as their predecessor. It also takes a toll on remaining staff, who have to
take on additional work and may produce lower-quality output as a result.
Conversely, high-retention workplaces tend to have more engaged workers who,
as a result, are more productive.
4. Improved employee morale. Organizations with successful employee retention
programs foster greater connectedness and engagement, which helps morale
and, in turn, boosts retention. Conversely, a steady stream of departures has a
 dampening effect on workplace morale, with side effects that include a decrease
in work quality and more workers who decide to leave.
5. Experienced employees. It stands to reason that the longer employees remain
at an organization, the more engaged, knowledgeable and skillful they are. They
have also forged valuable relationships with customers and co-workers. When an
employee departs, the company incurs an opportunity cost in the potential value
the employee could have delivered.
6. Better customer experience. Inexperienced and less adept new hires may be
more prone to missteps that negatively impact a customer’s experience with the
company. Satisfied, longer-term employees are often more skilled in dealing with
customers and may have strong relationships with them. This is as true during all
the stages leading to a signed contract as it is post-sales, when a customer might
reach out to customer service. A better customer experience can also be a key
brand differentiator.
7. Improved employee satisfaction and experience. A symbiotic relationship
exists between retention and both employee satisfaction — worker happiness
and fulfillment — and employee engagement, the level of commitment workers
bring to their roles. Satisfied and engaged employees are often more likely to
stay in an organization, and organizations with high retention rates often
experience greater employee satisfaction and engagement.
8. Stronger corporate culture. Corporate culture develops over time, based on
employees’ cumulative traits and interactions. When engaged employees who
are aligned with an organization’s culture stay, they strengthen the organizational
ethos. A strong corporate culture also improves productivity and performance.
9. Increased revenue. Employee retention is not just about cutting costs; anecdotal
evidence shows it can have a positive impact on revenue as well. Employers with
better retention rates deliver a better customer and employee experience, hold
on to experienced top talent and are more productive — each of which can boost
growth.
WHAT HAPPENS WHEN BUSINESSES HAVE HIGH EMPLOYEE TURNOVER?
A certain amount of turnover will always exist in an organization, and some may be
beneficial as it makes way for new talent. Industries that tend to employ many first-time,
part-time, seasonal and student workers are naturally prone to extreme or fluctuating
attrition.
However, high turnover takes a toll. Companies with higher turnover lose what they’ve
invested in recruiting, onboarding and training employees who leave. For those
remaining, morale and quality of work can take a hit. In addition, organizations that
experience higher attrition must focus more attention on replacing talent and addressing
issues related to lost productivity, burnout among employees who pick up the slack and
decreased employee engagement. Those negative effects can lead to even greater
turnover and hinder the company’s overall success.
WHAT CAUSES HIGH EMPLOYEE TURNOVER?
What makes workers want to leave a company? The exact cause of employee
turnover varies, but often fall into the following categories:
1. Personal reasons. There are a number of reasons for leaving a job that have
nothing to do with the employer, such as relocating for a spouse, family issues, a
career change or health reasons.
2. Work-life balance. Issues related to long hours or rigidity about work styles or
location can drive employees to seek more flexible or less demanding
alternatives.
 3. Incompatibility. Incompatibilities between employer and employee, which can
often be traced back to poor hiring processes and decisions, are a common and
largely avoidable reason for turnover.
4. Work relationships. Individuals may have issues or conflict with their managers,
co-workers or organizational leadership.
5. Lack of opportunity. Employees who see a lack of workplace development,
career path or opportunity to gain new experiences may leave for a business with
better mobility.
6. Financial reasons. Better pay and benefits available elsewhere are always a
strong lure for employees to leave an organization.
EMPLOYEE RETENTION MODELS
Over the years, researchers have developed a number of models seeking to explain job
satisfaction. Rooted in psychology, these models have influenced HR’s approach to
employee retention over the years. They include:
1. The Hierarchy of Needs. Although psychologist Abraham Maslow developed
the Hierarchy of Needs to better understand the essential needs of humans and
which must be met first, the theory can also be used to examine the biggest
contributors to job satisfaction. The five levels of needs, in order of importance,
are psychological, safety, belongingness, esteem and self-actualization.
2. Motivation-Hygiene Theory. Two primary factors impact job satisfaction,
according to psychologist Fredrick Herzberg: Motivators, also called job
satisfiers, include recognition, meaningful work and personal growth. Hygiene,
also called job dissatisfiers, include salary, benefits and job security. Of note,
proper management of hygiene factors can prevent employee dissatisfaction but
are not considered sources of satisfaction or motivation.
3. Human Motivation Theory. In his 1961 book The Achieving Society,
psychologist David McClelland built on Maslow’s work and identified three
intrinsic human needs: achievement, power and affiliation. By understanding
which needs an employee prioritizes, employers can increase their job
satisfaction. Some employees, for example, may be embarrassed by public
praise. Some work best with goal-oriented tasks.
4. Job Characteristics Model. Organizational psychologists Greg R. Oldham and
J. Richard Hackman found the following job characteristics increase job
satisfaction: skill variety, task identity, task significance, autonomy and feedback.
Jobs created with these characteristics in mind lead to more productive and
motivated employees.
HOW CAN BUSINESSES TELL THAT EMPLOYEES ARE READY TO LEAVE?
Employees may exhibit some telltale signs that they’re ready to depart, such as a
résumé left in view or an increase in extracurricular appointments. However, there are
more subtle behaviors that signal someone may be thinking about leaving. They
include:
1. Decreased initiative or productivity. An individual thinking about leaving may
no longer put in extra effort or may seem noticeably less interested in pleasing
others.
2. Shift in attitude. Negativity — about the job, a manager or co-workers — can be
a sign an employee is ready to move on.
3. Lack of commitment. Employees who are heading out the door may avoid long-
term projects or put in shorter days.
 4. Dwindling enthusiasm. Individuals considering their options may seem
noticeably disconnected from the organizational mission or less eager to work
with clients or customers.
Employers can use these cues in efforts to retain top performers or plan for their loss.
Interventions with potentially immediate effects are promotions, pay increases and
special projects. Employers can also benefit by conducting “stay interviews,” which are
the inverse of exit interviews. Stay interviews examine key drivers of retention and what
the company can do to meet an employee’s desires.
HOW TO IMPROVE EMPLOYEE RETENTION
Improving employee retention begins with hiring the right person. This requires defining
the job itself — responsibilities, required skills, work environment — and developing a
fine-tuned job description that attracts appropriate candidates.
Once an organization has chosen a new hire, orientation and onboarding are key to
making them feel welcome. A well-planned and organized onboarding program has
been shown to increase employee retention, engagement and commitment. In addition,
competitive compensation and employee benefits are important not only for recruiting
the best and brightest, but also for keeping them. So are competitive bonuses, paid time
off, health benefits and retirement plans.
Finally, employees value meaningful work that makes good use of their skills and
abilities. Career development and growth opportunities are other critical aspects of
employee retention, as is recognition for their contributions.
MEASURING & MONITORING EMPLOYEE RETENTION
Measuring employee retention starts with tracking turnover and annual retention rates.
But the most successful employee retention programs collect and analyze a wide range
of data, including employee satisfaction and engagement, more nuanced retention and
turnover information, and other issues like absenteeism. These measures offer a more
detailed understanding of employee retention, which can be used to inform recruiting
and hiring strategies, address cultural and management issues, and improve employee
satisfaction and engagement. Examining these retention metrics from a variety of
angles also enables the business to focus its retention efforts on top talent.
VI. Assessment Tasks

Essay:

1. Fully discuss the employee retention?

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2. What is the importance of employee retention?

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3. How to improve the employee retention?

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Rubric for essay: /10

Identification of main issues or topics /1
Analysis /5
Solutions/ Answer to questions /2
Readings and Research /1
Spelling and grammar /1

VII. Other reading materials or sources

Messenger
Google Classroom
Google Meet
PowerPoint Presentation