RELATIONSHIP BETWEEN EMPLOYEE RETENTION STRATEGIES AND EMPLOYEE TURNOVER
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RELATIONSHIP BETWEEN EMPLOYEE RETENTION STRATEGIES AND EMPLOYEE TURNOVER
Chapter one
INTRODUCTION
1.1 Background of the Study
Employee retention is viewed as a subject that is gaining attention from many organisations (Hong et al., 2012), as it causes a severe problem when high-performing individuals leave the organisation.
Organisations experience negative results when talented employees leave, such as lower efficiency and production, increased costs, and a threat to the organization’s long-term existence and sustainability (Beach, Brereton, & Cliff, 2003).
As a result, talent retention has become an increasingly important managerial consideration. In this regard, Slattery and Selvarajan (2005) explained that human resource practices can reduce employee turnover
with employees’ intention to leave being reduced when they perceive that their organisations provide positive human resource practices (e.g., better pay and benefits, job freedom, and job security) (Stewart & Brown, 2009).
Employee retention is a vital issue that, if handled properly and successfully, can increase the value and competitiveness of any organisation. Employees are regarded as the organization’s most valuable assets, and as such, organisations should make every effort to retain existing talent in order to avoid new recruitment.
To that purpose, enhancing employee retention has become a trend in commercial organisations worldwide, including Jordan. Employees with exceptional skills and talents can greatly enhance the organization’s competitive edge.
As a result, organisations should maintain such abilities, especially in this dynamic and unpredictable environment where change is unavoidable (Samuel & Chipunza, 2009).
Employee retention benefits both the organisation and its personnel. Employees today have several attractive opportunities. When they are unsatisfied or dissatisfied with their current company or job, they will always look for new opportunities.
It is exclusively the employer’s responsibility to retain its finest personnel. Failure to do so may result in the loss of talented employees. Good employers understand what has to be done to attract and keep their personnel. Employees are the most important resources of any organisation.
Employees who are not heard and valued will depart due to stress and frustration (Kakar, Raziq, & Khan, 2015). Even if they stay with the organisation, their frustrations and dissatisfaction will have a negative impact on performance and productivity.
When these bad feelings were overwhelming, the employees would leave. Nonetheless, if employees feel a sense of accomplishment and belonging in a healthy working environment, the company will have contented and reliable employees who will contribute to the company’s growth.
Employee retention, on the other hand, is the percentage of employees who remain with the organisation (Phillips and Connell, 2003). Any organization’s primary objective should be to attract and retain critical individuals.
Even the most successful businesses might suffer major consequences if they fail to develop effective staff retention measures. Finding the proper personnel is a significant expenditure of time and money. All organisations must make sensible decisions about retention tactics and prioritise their employees’ interests.
Employee retention is also defined as a process in which employees are strongly encouraged to stay with the organisation for an extended period of time (Sandhya and Kumar, 2011). In order to improve employee performance, organisations must develop and implement employee retention initiatives.
A high turnover rate is a severe problem that most organisations are currently facing, and it is caused by factors such as bad working conditions, limited career advancement opportunities, job unhappiness, and a lack of a competitive wage package (Ivancevich, 2010).
This, in turn, leads to poor employee performance, forcing organisations to develop employee retention methods and policies. This will also ensure that staff are more likely to stay with the organisation for extended periods of time, which will benefit their performance.
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