EMPLOYEE
RETENTION
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Introduction INTRODUCTION
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An
effective Employee Retention Program is a systematic effort to
create and foster an environment that encourages employees to
remain employed by having policies and practices in place that
address their diverse needs.
Employee Retention Workgroup Definition |
The way it is...today there is a high demand in the public and private sectors for workers in critical areas such as health care, information technology, engineering, accounting, and auditing. The supply of qualified workers is limited and good workforce planning requires a twofold approach of aggressive recruitment and innovative retention strategies. Retention policies need to focus on elimination of unwanted turnover.
Unwanted turnover is expensive.
Costs to the employer can include separation benefits, lost productivity, recruitment costs, training costs, and diminished services as new employees get up to speed.
In their book, Retaining Valued Employees, Griffeth and Hom 2001 report that turnover costs can run as high as 200 percent of the exiting employee's salary, depending on his or her skill level.(1) According to the newsletter of the International Association of Professionals in Employment Security, "When a valuable employee leaves, it costs the employer money - possibly up to a third of the employee's annual salary." (2) Differences between the two estimates may be due to the worker groups used as a reference, e.g., executives vs. hourly workers. While other sources differ on costs to employers, they generally agree that costs can be substantial.
Separation Costs
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Replacement Costs
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Conclusion
Due to the unique nature of New York State services to the public, additional costs need to be considered, including the potential for diminished services to the public.
Frequently, high turnover areas include health and safety and technology jobs. These are positions which often require higher levels of training and education. Service naturally falls off when new employees need to be trained.
"...when a mental health professional leaves, his or her clients are reassigned to other professionals" (Hom, 1992). As a consequence, the employing organization must assume the clerical costs of transferring client records, the cost of the time spent by the supervisor to explain the client's background, and the cost of the time spent by other mental health professionals to learn the history of clients newly assigned to them." (3)
Today New York State agencies need to adopt effective retention strategies to assure they have the personnel needed to efficiently and effectively deliver mandated services. In order to assess retention strategies used by New York State today, State employee focus groups were assembled to discuss the topic.
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