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Retention: Advantages & Strategies

Retention of employees is essential to the long-term growth and success of businesses, especially given the costs associated with candidate searches, new employee training and lost productivity during periods of insufficient staffing.

While compensation is an influential factor in employee retention, it is not the only reason why people may take or leave jobs and there are many strategies employers can use to maintain their workforce and reduce turnover.

The Cost of Turnover

Retention is a critical issue for all employers, in large part because turnover can be very costly - total replacement costs range from 90%-200% of annual salary.

Some of the costs associated with turnover include:

  • Candidate searches
  • Training time and costs
  • Lost and additional investment in employee benefits
  • Time required for knowledge transfer
  • Loss of productivity due to the learning curve
  • Replacement costs to supplement lost work

Why Do Employees Leave?

While employees leave for many reasons,the majority do so because of a particular "shock" or event, rather than accumulated dissatisfaction. [1]

An employee's relationship with his or her front-line manager is especially important. Employees are more likely to leave an organization because of conflicts in their relationships with their superiors than due to dissatisfaction with the job itself.

Common reasons employees leave include:

  • An argument or conflict with a manager or supervisor
  • An unexpected job offer
  • Dissatisfaction with job content
  • A lack of:
    • Teamwork opportunities
    • Effective leadership
    • Job autonomy
    • Opportunities for promotion
    • Workplace fairness and equity

Why Do Employees Stay?

Employees opt to stay with employers for a wide range of job and non-job related reasons. They may remain because of:

  • A commitment to the organization's mission
  • Alignment of the position with professional goals
  • Opportunities for promotion
  • Training programs for career development
  • Reward systems
  • Work/life balance flexibility
  • Relationships with co-workers
  • Involvement in community activities
  • Linkages and supports within the workplace

Advantages of Retaining a Diverse Workforce Including Employees with Disabilities

There are many advantages to retaining a diverse workforce. In addition to considerations of age, race, ethnicity, gender, religious affiliation, and sexual minority status, employers should include the benefits of employing people with disabilities.

Employees with disabilities may:

  • Reduce hiring and training costs
  • Have fewer job changes than their non-disabled peers
  • Have lower rates of absenteeism
  • Increase retention, improve productivity
  • Provide access to new markets
  • Improve customer loyalty and make an organization an employer and vendor of choice

Key Retention Strategies

There are a wide range of strategies employers can use to retain valued employees with and without disabilities. Before implementing these strategies employers may find it useful to assess their current workplace culture through workplace climate surveys or exit interviews, to determine the organizational factors that may be leading to employee exit.

  1. Employee Support
    • Ensure employees have the tools, time and training necessary to perform their job well, through:
      • An effective orientation program or on-boarding process
      • Realistic job previews
      • Training
  2. Management Recognition
    • Require managers to meet with new employees to learn about their abilities, knowledge, skills and talents to ensure that they feel welcomed and acknowledged.
  3. Workplace Structures that Facilitate Communication
    • Provide constructive feedback to employees and solicit their input to foster an environment in which everyone is comfortable offering ideas and is committed to continuous improvement.
    • Develop Employee Resource Groups (ERGs) to encourage diversity and inclusion.
  4. Flexible Workplace Policies
  5. Talent and Skill Development
    • Offer and encourage employees to pursue training opportunities
    • Create career development paths
    • Provide managers with the training necessary to develop high quality employee relationships.
  6. Career Advancement
    • Provide opportunities for career growth
    • Initiate committee involvement and participation in employee resource groups
    • Encourage attendance in seminars and other staff development and training opportunities so employees feel valued as team members and part of the future of the organization

[1] Holtom, B., Mitchell, T., Lee, T. & Inderrieden, E. (2005). Shocks as causes of turnover: what they are and how organizations can manage them. Human Resource Management, 44, 3, 337-352.

Other Resources

Employee Assistance Programs for a New Generation of Employees<http://www.dol.gov/odep/documents/employeeassistance.pdf>
The Department of Labor's Office of Disability Employment Policy (ODEP) defines Employee Assistance Programs and elaborates on the benefits of these programs for both employees and employers. The new millennium generation of workers are defined and their EAP needs are considered.

Diversifying your Workforce: A Four Step Reference Guide to Recruiting, Hiring, and Retaining Employees with Disabilities<http://promotions.usa.gov/odep/20100727.pdf>
This General Services Administration comprehensive reference guide provides information for employers on recruiting, hiring and retaining employees with disabilities.

Customized Employment and Flexible Work Arrangements <http://www.dol.gov/odep/topics/CustomizedEmployment.htm#flex>
This resource from the Office of Disability Employment Policy at the U.S. Department of Labor provides a guidance for employers on customized employment and flexible work arrangements.

Page last updated on Tuesday, January 21, 2014

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