What Is an Employee Retention Plan?

Employee retention was a concept of economic development in the early and mid-20th century. In the era of the knowledge economy in the 21st century, core talents have become an important influencing factor for the speed of enterprise development and even its rise and fall. The loss of a core talent means a recruitment period of at least 2 months, an adaptation period of 3 months, and an integration period of 6 months; in addition, there is a recruitment fee equivalent to 4 months of salary, which is more than 40% failure rate. These statistics have made HR more and more aware that retaining core talents means saving costs, as well as guaranteeing efficiency and creating value! Retaining talent and keeping it highly engaged and loyal are affected by many factors. Good career development prospects, an open corporate culture, a sound management system, and competitive compensation and benefits have all played an active role. In contrast, employee departure factors, lack of transparency in the organization, employees' incomprehension of corporate strategy, and conflicts between employees and direct managers are the reasons that lead to a reduction in the trust between employees and the company, and the unwillingness to stay in the organization ^[1] .

Employee retention

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Employee retention was a concept of economic development in the early and mid-20th century. In the era of the knowledge economy in the 21st century, core talents have become an important influencing factor for the speed of enterprise development and even its rise and fall. The loss of a core talent means a recruitment period of at least 2 months, an adaptation period of 3 months, and an integration period of 6 months; in addition, there is a recruitment fee equivalent to 4 months of salary, which is more than 40% failure rate. These statistics have made HR more and more aware that retaining core talents means saving costs, as well as guaranteeing efficiency and creating value! Retaining talent and keeping it highly engaged and loyal are affected by many factors. Good career development prospects, an open corporate culture, a sound management system, and competitive compensation and benefits have all played an active role. In contrast, employee turnover factors, lack of transparency in the organization, employees' failure to understand corporate strategy, conflicts between employees and direct managers, etc. are the reasons that lead to reduced trust between employees and the company and unwillingness to stay in the organization ^[1]

In the early and mid twentieth century, the nature of the relationship between employers and employees was always a statement of maintaining the status quo: you come to work for me, do it well, and I will hire you as long as the economic situation allows.

With the development of the economy, the "staff turnover rate" has begun. Initiative is also transferred from employer to employee.

The main reasons for the formation of employee turnover: information dissemination; cost reduction; economic development needs; market competition, etc.

Employee retention now means : By the late 1980s, the organization had done most of what was possible

Narrow sense of separation (Turnover or Separation), refers to the flow of personnel from outside the organization. According to the initiative or non-resignation of employees, it can be divided into Voluntary Separation and Invo luntary Separation. According to the evasion of the organization, it is divided into avoidable separation (Avo idab le Separation) and inevitable separation (Unavo idable SeparatiOn). According to the functional distinction of the organization, voluntary separation can be divided into functional separation (Functional Separation) and non-functional separation (Dysfunctiona l Separation). Functional resignation is that the individual wants to resign and the organization does not care. It has positive organizational benefits for the organization and can save many problems of employee employment. Non-functional resignation is that the individual wants to resign, but the organization hopes to retain it As far as the organization is concerned, these employees are all positive employees, and their departure is harmful to the effectiveness of the organization. Core employee departures are non-functional, voluntary departures that can be avoided after organizational effort ^[1]

According to the theory of needs, after a person's physiological needs are basically met, there will be three basic needs, namely power, belonging and achievement. Pay attention to employees 'career development, pay attention to employees' work participation and protection, pay attention to the construction of corporate culture, and pay attention to team management. According to the theory of psychological contract and organizational commitment, there are implicit and informal contracts between organizational members and organizations.Enterprises should meet the psychological needs of employees, and try not to violate the psychological contract between the enterprise and employees, so that employees can form a comparative High organizational commitment to achieve the common growth of the organization and its members, which is one of the principles and objectives of strategic human resource management. According to job satisfaction and turnover theory, when a core employee is dissatisfied with his job, he may choose to leave if there is a suitable external job opportunity; attracting and retaining core employees is the basis for enterprises to establish and maintain a competitive advantage ^[1] .

If the company has a clear qualification system and a clear career development plan for employees, provide fair and competitive compensation, implement strategic human resource planning, and have a corporate culture recognized by employees, employees have a relatively good job in the enterprise. High participation, and employees have a sense of belonging in the company, then the employees will have higher job satisfaction and willingness to stay. The company attaches importance to training, learning and corporate culture construction, planning employees' careers, having good team management and a clear qualification system. These are the areas of strategic human resource management. Through the implementation of strategic human resource management, the core employees and the company can grow together, increase employee satisfaction and organizational commitment, thereby increasing the willingness of core employees to stay in order to achieve the purpose of retaining strategic resources of the company's core employees.
In short, a corporate culture atmosphere focusing on learning and training and team management, the establishment of a clear qualification system based on competency and quality models, the use of performance evaluation and compensation management systems based on company strategy, the development of human resource planning that is in line with company strategy, and improvement The career management system of employees can not only improve the competitiveness of the company, but also enable the employees to grow together with the company.It will increase the employee's job satisfaction and commitment to the company, which will help the company retain core employees and achieve long-term sustainability. development of.