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Employee retention program

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Employee retention and turnover is an important subject for human resource managers to address. The money, time and effort put into the recruiting and training process can easily be wasted if the organization is dealing with excessive turnover.

Through extensive research, this paper will focus on:
• Developing a retention program. What factors must be taken into consideration to develop an effective program?
• Utilizing effective exit interview strategies. Determining the reasons why the employee left may help to identify problems within the organization that need correcting/tweaking.
• Common reasons for turnover. What are the most common reasons for employee turnover and how can this knowledge be used to an organization's advantage?
• Costs and benefits of turnover. What factors go into determining the turnover cost to the organization? (Voluntary vs. non-voluntary turnover will be discussed as well).

Reducing the rate of turnover is an important factor for almost every organization. By identifying the reasons behind employee turnover and developing a successful retention program are the most effective ways to reduce turnover, and also has other residual benefits that contribute to making the company more successful.

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See attached for figures

The workforce is the biggest asset for any organization. However as opportunities continue to open up in the external environment; employee turnover is becoming a major concern for organizations across the world. But what exactly is turnover?
Turnover can be defined as the percentage of a company's workforce voluntarily quitting the organization during one year (May, n.d).
Going by the definition, a high employee turnover means a greater percentage of employees are leaving the company due to which the company has to recruit and train new employees. However this is a problem for the organization. To recruit and train a new employee organization has to spend dollars. This does not directly reflect on organization's profit & loss statement nor is it in budget. It's so because these costs are hidden, for example cost of posting a position requirement on job portal, cost of engaging a headhunter, etc.
Costs associated with high employee turnover
The organization has to pay for cost
 Reduced Productivity: When an employee leaves the company the position which was occupied by him or her becomes vacant. While critical tasks would be farmed to other employee/s, most would fall back. It results in productivity lost.
 Additional burden on remaining staff: The remaining staff gets paid the same but they would be required to compensate the work of employee/s that has left the company. As they stretch the quality of work goes down bringing down the satisfaction. They start searching for a new job and quit.
 Knowledge lost: When a particular employee leaves he or she takes away the knowledge. Sometimes the knowledge is way beyond general knowledge and can include client specific details, industry knowledge and best practices.
 Training costs: The new employee who takes over the role of employee who quit the job, the company would need to put trainer to teach him or her the processes of the company. It goes on until the employee understands everyone and can drive things without any support.
 Recruitment cost: The hiring manager would have to find a replacement for the position that has fallen vacant.
As per review of 30 case studies published in research papers published between 1992 and 2007 the turnover cost is about one-fifth of an employee's annual salary. In other words, it takes one-fifth salary to replace the employee.

* Center for American Progress
Based on the above graph, it is evident that jobs which require higher level of education and specialized training have higher turnover costs than jobs with lower education and training requirements. Senior management and executive jobs are included in this category.
Types of Employee Turnover
It is important to distinguish between types of job separations as it reveals why employee left the company and may shed light on issues in the organization which need to be addressed. The two general types of turnover are voluntary and involuntary.
Voluntary Turnover- When employee chooses to terminate the employment it is called ...

Solution Summary

The document details components of retention management plan, and steps of creating retention program.

See Also This Related BrainMass Solution

Discuss Importance of Nursing Retention Practices

In a short essay, respond to the Alegent Health case. The two questions at the end of the case should be incorporated into the response. Use APA format (modified) and be sure to properly cite all sources used. You do not need a cover sheet or an abstract, but be sure to put a title for your essay, and citations per APA. Two sources required.


Alegent Health is an Omaha based non profit health care system composed of seven hospitals with about 2,000 beds and more than 200 clinic and outpatient locations, 1,200 physicians, and over 7,500 other employees who work throughout the organization.

Several years ago, Alegent recognized that HR issues needed "acute care treatment." Turnover rates of 24%, coupled with over 500 unfilled positions, were costing the firm over $15 million annually.

Four years later, the turnover rates have declined to 12% and open positions have dropped to fewer than 100. Because of their improvements, Alegent's HR practices, and especially its retention successes, won several local and national awards. Alegent was named one of the "Best Places to Work in Omaha." The award was based on surveys of employees that asked about credibility, respect and fairness, pride, and camaraderie. Alegent also received a Workforce Management's Optimas Award in the financial impact category for its success at recruiting and retaining key staff. Alegent is clearly being effective with some HR activities to win all the awards.

Specifically regarding retention efforts, Alegent created an Employee Retention Task Force whose focus was to decrease turnover and increase employee satisfaction. The task force identified several strategies to be used.

One program illustrates how Alegent approached retention of nurses. The Nursing Residence Program has caught national attention. Each resident (or new nurse) is paired with an experienced nurse or "preceptor' based on interests, personality, and so on. Also, a mentor outside the nursing department adds support and encouragement to individuals. Nursing staff meet monthly for training. In addition, they can visit various other departments (pediatrics, cardiology, etc.) in which they may have career interests. Nurses interested in management can shadow the department director to see how the department is managed. Returning nurses who have been out of the field five or more years are enrolled, retrained, and paired with recently finished residents.

Alegent Health is the exception to the turnover levels in nursing. Compared to the U.S. health care industry rate of 20%, Alegent's turnover rate of 7.6% is exceptional. Another key to aiding nursing recruitment and retention is an extensive training and development program. Many different short courses and classes are provided to Alegent employees at no cost. As part of this program, Alegent pays up to $20,000 for employees selected for a career advancement program to obtain nursing degrees.


1. Discuss how Alegent's practices match with the recommended retention practices covered in the chapter.

2. Why was a broadbased approach to nursing retention important?

3. As the HR manager, you have been asked to provide the senior management team with turnover costs for one high-turnover position. Using www.talentkeepers.com and www.keepemployees.com, calculate turnover and analyze the variable involved. Also identify any other data that might be relevant.

The position is: Machine Operator
Number of employees: 250
Number of turnovers: 85
Average Wage: $11.50/hour
Cost of benefits: 38% of payroll

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