High Level of Employee Retention Within an Organization | Free Essay Example

High Level of Employee Retention Within an Organization

Words: 854
Topic: Business & Economics


It is critical for a modern business, to remain viable and competitively advantageous in today’s market place. As such, organizations must look beyond reducing expenditures and controlling operating costs in order to experience an increase in profits. Human capital must be regarded as an organizations number one asset, thus giving the company a competitive advantage against their competitors. The purpose of this research project is to identify the effects that employee retention rates have on the overall fiscal health of the company (i.e., low retention rates equate to high costs associated with training).

As such, this paper endeavors to identify if there is a direct correlation regarding employee retention rates and the overall profit growth of an organization? In that, some additional answers found may be what are the factors that determine a high level of employee retention within an organization?

A turnover rate’s effects on an organization

Employee retention strategies drive revenue growth at Sears. Today the value of employees in any organization is of increasing concern in the world. Further, the increasing need to employ the best in the market should be backed up by a strategic effort to attract and retain the workforce, which calls for building human resource systems, developing human resources and rewarding human resources consistently over their tenure in the company.

For instance, if 51% of the workforce had changed the number of hours they usually worked, 43% had been promoted, and 10 per cent changed occupation. This trend submits to the admission that voluntary turnover at the senior and middle management levels are optional, a small percentage of companies offering management development programs and much flexibility in proactively staffing prior to market demand.

Use of the system that reports the number of candidates per position for new hires suggests an adopted learning strategy and flexibility in proactively staffing prior to market demand. Organizations offering management development programs face stiff global challenges that put it at risk of failure. This is because of trends in the market such as strategic human resource innovation, sustainability and job satisfaction and retaining employees.

The human resource focuses on developing employee talent and ensuring that tasks are assigned. The low scores in the areas of workforce management have plunged an organization to the risk of losing its workforce with an estimation of the demand for labor within the country escalating. The supply of the workers, in terms of numerical figures and competencies, is going down rapidly.

In ethics, Organizational behavior should be addressed between the management and the workforce as well as between among the workforce themselves. The management should understand the behavior, attitudes and performance of people in organizations to know what exactly they need, provide them with relevant resources and training that will build them into diligent and self-respecting employees. For example, come up with a system that rewards employees based on their performance improvement, and behavior in organizations. Organizational behavior derives its concepts from political science, psychology, anthropology and social psychology (Young, 2007).

Calculating the high cost of employee turnover

The cost benefit principle is the final determinant that will judge the acceptability of the new technology, information system and employee turnover. The management will require the benefits accrued form the information system and the technologies extend to influence the retention levels (Thinking Leaders 2011). The external and internal users and hence the benefits of such information or their related enhancement should outweigh the costs.

Well profitable companies that are highly sophisticated can undertake expensive practices and process in human capital management, which enable them to retain their workforce. On the contrary, majority of the companies are not able to have such implementation because of the large costs associated with the development of human resource management, resulting in frequent shifts from one employer to the other within a short span of time.

Failure to respond to the great employee requirement is a recipe for poor employee retention. Employee willingness to work correlates to the measure of employee satisfaction, attraction subject to their respective abilities. Retention level increases when employee are well treated. Increasing employee-learning program might mean that the organization possibly will suffer considerably in terms of cost. Therefore, it is critical that all factors be brought together to ensure that all costs extended towards retaining employees is less than the benefits. There exists internally and externally reason that the current workforce market seeks companies that address talent in the market to grow and be competitive.

Organizations should enable the workforce to enjoy their jobs through growth. Such satisfaction is the difference between the total utility they receive from the measure of output tasks done in relation the rewards they receive from the service. The law of diminishing marginal utility postulate that the first unit of service delivered has immense utility as compared to the unit of output. It is even evident that the size of reimbursement of financial service companies has caught up due to the short of clarity around main talent surrounded by organizations. Use of a determining factor for workers satisfaction, attraction and retention, is key to workforce growth in organization competitive advantage (Mayhew 2011).


Mayhew, R. (2011). Managing Employees: Employees. How to solve Employee Turn over Rate. Web.

Thinking Leaders. (2011). Calculating the high cost of employee turnover. Web.

Young, C. (2007). Employee retention strategies drive revenue growth at Sears. Web.